Uganda eyes capital markets to unlock mineral wealth

The Ugandan government has revealed plans to establish a National Commodities Exchange aimed at securitising the country’s mineral resources and facilitating their trade on the stock market, a move expected to formalise the mineral trade, attract foreign direct investment (FDI), and spur economic growth.

Joseph Enyimu, commissioner for economic development, policy, and research at the ministry of Finance, Planning and Economic Development, said the proposed exchange, dubbed the Uganda Commodities Exchange, will allow minerals to be traded as financial instruments, positioning Uganda as a regional mining and investment hub.

“We think that where we sit in the Great Lakes region makes us a prime candidate for this. We hope to pull in some very serious foreign direct investment through the capital markets,” Enyimu said.

The exchange is currently in its pilot phase, focusing on the grain sector, with support from the International Finance Corporation (IFC) and the Capital Markets Authority. Uganda Securities Exchange is running the pilot, which, if successful, will pave the way for mineral listings.

“We’d like to see these minerals securitised and traded on the stock exchange. That means we need registered warehouses to facilitate that, and we are in a pilot stage right now,” Enyimu added.

This development aligns with broader national goals, including the recent formation of a state-owned national mining company to safeguard Uganda’s interests under the new Mining and Minerals Act.

The move also dovetails with President Yoweri Museveni’s long-standing policy of banning the export of raw minerals in favour of local value addition. According to the ministry, Uganda’s rich mineral deposits especially critical minerals tied to the global energy transition present a unique economic opportunity.

These include lithium, rare earth elements, and the “3Ts” (tin, tungsten, and tantalum), which are vital in the global electronics and clean energy industries.

“These minerals are highly sought after globally, and we’ve broken them into six categories, including critical minerals, precious minerals, industrial minerals, the 3Ts, iron ore, and geothermal sources,” Enyimu said.

“Most of these are concentrated in the southwestern districts of Uganda.”

The ministry is betting on the abundant iron ore reserves to support a growing domestic steel industry.

“In the next fifteen years, the demand for steel is going to shoot up,” Enyimu predicted. “If you look at the infrastructure projects we have programmed and the local content needed to feed them, we think the industry is picking up a signal.”

He said, Italian firm Danieli, the world’s largest supplier of steel plant machinery, has already expressed interest in setting up operations in Uganda, with plans to use the country as a gateway into the wider African market.

Beyond attracting investment and boosting the mineral sector’s contribution to GDP from the current 1.9% to an estimated 2.4% by 2030, the government is also working to reform the legal and financial frameworks underpinning private equity and investment funds.

According to Enyimu, changes have been made to reverse the trend of Ugandan investment funds being domiciled in tax havens like Mauritius.

“Private equity funds are now being domesticated within Uganda to ensure capital stays within the country,” he said.

Listing minerals on the exchange could also open the door to Initial Public Offerings (IPOs) by mining firms, allowing them to raise capital from local and global investors. Such listings improve transparency, boost investor confidence, and compel companies to enhance operational efficiency through regulatory compliance.

Uganda’s ambition is to use its mineral wealth as a cornerstone of a tenfold economic growth strategy, aimed at expanding the national economy from $50 billion to $500 billion by 2040.

The Finance ministry projects that the mining sector alone could grow its GDP contribution from Shs 80 billion to Shs 180 billion by 2030. With key institutions like the Bank of Uganda now integrating gold into their reserve management frameworks and a national commodities exchange on the horizon, Uganda appears poised to harness its mineral potential more strategically.

However, successful implementation will hinge on transparency, investor confidence, and the country’s ability to build the infrastructure needed to support a fully functional and inclusive commodities exchange.