KAMPALA, UGANDA — The Ministry of Finance is actively engaged in establishing a national commodities exchange with the primary goal of securitizing Uganda’s mineral resources and facilitating their trading on the stock market.
According to Joseph Enyimu, the Commissioner for Economic Development, Policy, and Research at the Ministry, the listing of minerals is projected to formalize the sector, attract both domestic and international investment, and thereby stimulate economic expansion and enhance value addition within the extractives industry.
“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,” he stated.
“Based on the results of that pilot, we will be concretizing a few moves, and we are very glad that Bank of Uganda has adopted, as part of its reserve management framework, the domestic purchase of gold. So, we see the pieces falling into place,” he added.
This strategic initiative coincides with a growing global interest in the mining sector, particularly driven by the ongoing energy transition debate, where critical minerals play a pivotal role. The planned listing of minerals on the stock exchange also aligns with the government’s recent formation of a national mining company, which is mandated to safeguard national interests within mining ventures, as stipulated by the new mining legislation.
Commissioner Enyimu explained that the government has categorized existing minerals into six key groups, starting with critical minerals essential for the energy transition, followed by precious minerals, industrial minerals, and the 3Ts – Tin (cassiterite), tungsten (wolframite), and tantalum (coltan). These 3T minerals are highly sought after globally due to their crucial applications in the electronics industry. The government has also identified iron ore and geothermal resources as significant areas of focus. The majority of these mineral deposits are located in the southwestern districts of Uganda.
Globally, mining companies frequently seek capital through various avenues, including initial public offerings (IPOs) and listings on domestic or cross-border stock exchanges. These listings provide access to major global financial hubs and a diverse pool of international investors.
An IPO can significantly enhance a company’s visibility among customers, suppliers, and the media. It also presents an opportunity to refine internal systems and controls and improve overall operational efficiency in preparation for compliance with the regulatory requirements for publicly traded companies.
President Museveni has consistently advocated for a ban on the export of unprocessed minerals, underscoring the importance of value addition. The Ministry of Finance anticipates that Uganda’s abundant iron ore deposits will be instrumental in propelling the domestic steel industry as part of this value addition strategy.
“So we are saying that in the next fifteen years, the demand for steel is going to shoot up, given the growth trend that we have seen. If you look at the infrastructure projects we have programmed for the next ten years, and the local content to feed them, we think that the industry is picking up a signal,” Enyimu noted.
The mineral sector has been identified as a key driver in Uganda’s ambitious plan to grow its economy from US$ 50 billion to US$ 500 billion. This tenfold growth strategy includes increasing the mineral industry’s contribution to GDP from the current 1.9% to 2.4% by 2030, translating to an increase from UGX 80 billion to UGX 180 billion within the same timeframe.
