Ugandans challenged to raise $100m infrastructure bond

By Samuel Sanya

RELIABLE power supply, good roods and access to clean water are taking up almost two thirds of the current national budget 2013/14. 

Despite this, the allocations are still below the required infrastructure spend. James Mworia, the Centum Investments boss has challenged Ugandans to close the gap by mobilising $100m (sh260b) annually through a tax free infrastructure bond to rehabilitate key infrastructure projects.

“Infrastructure is a critical driver of competitiveness and all five East African countries are below number 100 out of 148 countries when it comes to infrastructure according to the World Economic Forum Global Competitiveness Survey 2013,

“Governments should consider issuances of infrastructure bonds and consider deliberately supporting quality local private infrastructure projects to come to the market and raise debt,” he said.

Mworia was the chief speaker at the 11th Kikonyogo Capital Markets Awards at the Serena Hotel, Kampala on Friday. The awards recognise individuals and companies that promote the capital markets in Uganda.

Only 20% or 4,000km of the 20,000km national road network is tarmacked. National roads make up just 25% of Uganda’s estimated total road network but are the busiest.

Maria Kiwanuka, the finance minister allocated 18% or sh2.4 trillion of the current national budget to the roads and works sector up from sh1.7 trillion.

Mworia noted that the total infrastructure spend should least reach 10% of Gross Domestic Product or $2b (sh5.2 trillion) each year for the next 10 years for the country to attain middle income status.

He challenged Uganda to follow in the footsteps of Kenya and Rwanda who have issued large bonds to boost their infrastructure spend.

There are 15 listed companies on the Uganda Stock Exchange up from 14 companies in 2011.