KAMPALA – Uganda seeks to direct all foreign-owned insurance companies operating in the country to list their stocks on the Uganda Securities Exchange (USE), PML Daily has learnt.
The matter was conclusively discussed in a closed-door meeting on Friday, February 2, 2020, as Minister of State for Economic Monitoring Molly Kamukama met and held talks with the insurance regulator, the Insurance Regulatory Authority of Uganda (IRA) at her office in Kampala.
The minister is also meeting all other regulators in her quest to boost economic performance.
This, the minister was quoted as saying that it could help conserve the country’s scarce foreign exchange resources and ensure that at least a portion of dividend payouts remain in Uganda.
The Uganda shilling has weakened in recent years.
Though market leader Jubilee, UAP and Sanlam take up a majority of the Ugandan Insurance market, some believe that giving Ugandans the opportunity to own a piece of these companies would not be a bad thing.
Uganda has over 30 licensed insurance companies.
Although the Ugandan government seeks to improve the reputation of the USE, it has gone six years without a single Initial Public Offering (IPO) by any of the companies currently listed. It is believed that the government wishes to attract major companies found in the industry in order to encourage others to list their companies.
Minister Kamukama said insurance, as well as the stock exchange, is where Uganda can generate long term and equity financing to grown a number of sectors.
“It is intentional for the Ministry [of Economic Monitoring] to harmonise and see where the opportunity is and the potential that we can tap into, to help the growth of the economy,” she said.
Mr. Sande Protazio, the Director Planning, Research, and Market Development at IRA who attended the meeting confirmed that the matter was discussed and that the minister directed the regulator to go back and discuss it with operators.
“The minister has directed us to go and discuss this consideration further to see if we can motivate various insurance companies to see how we can incentivize them to list themselves on the stock market,” he said.
Minister Kamukama is quoted by Mr. Protazio, as she addressed them on new reforms and her quest to bolster economic performance as saying; she [Minister Kamuakama] wants Ugandans to have shares in the companies but also to see that more patient capital is generated from the local sources.”
“Most companies, the great part of the stakeholders are foreign-owned and that the ministers’ concern was that insurers must be involved in raising capital.”
Other issues that transpired in the meeting include, IRA was directed to write a proposal and submit it to the minister’s office concerning the insurance especially in schools, IRA officials were also tasked to write a proposal regarding enhancing government’s support to agriculture insurance among other things.
Mr. Protazio said the IRA sought to use Minister Kamukama’s officer to fast track some of the laws aimed at serving the interest of the local people.