[2008-08-15]  Kikuubo Traders Hold Key to Capital Markets Thrust
Stock brokerage firms have been advised to win over traders in the informal sector to invest in capital markets to improve the level of investment and saving in Uganda.

The call was made by Ms Grace Achire the chief executive officer of Vantage Communications, while presenting key findings from a 2008 research; "Knowledge, Attitude and Practices Assessment Report," at Hotel Africana, on Tuesday.


The research was commissioned by Vantage Communications, a Kampala based public relations firm on behalf of the Capital Markets Authority (CMA) as a prerequisite towards identifying main areas to be addressed in the design of a public education strategy by the CMA for the purpose of increasing awareness about the use and importance of capital markets.

"There's a lot of money down there, people just don't know what to do with it, you should go to these Kikuubo (downtown) traders and convince them, to invest in capital markets," Ms Achire told stock brokers and fund managers at the half-day workshop.

Many Kikuubo Lane traders allegedly amass millions of shillings daily but only change it to US dollars to deal with its bulkiness, plough it back into their businesses or invest in land, and luxuries like fleets of fuel guzzling SUVs. They are part of the 58 per cent of Uganda's 30 million people who are said not to be using formal financial institutions, to save money, according to the FinScope Review 2007.

Ms Achire observed that brokerage firms are reluctant to advise traders in the informal sector and rural groups to embrace the equity culture of mobilising funds from the public and private sector through various capital markets instruments to fund short and long term investments. These instruments include, stock, bonds, bills markets.

"The example of Mama Mboga campaigns in Kenya could be borrowed and implemented here to encourage these traders to invest in the capital markets," Ms Achire said. Mama Mboga is a Swahili nickname for a indigenous Kenyan women who make a living by selling vegetables in markets.

The Mama Mboga campaigns in Kenya were started with an aim of drawing more ordinary Kenyans to participate in the nation's vibrant capital markets. Today Kenyans and Tanzanians are the most knowledgeable people on capital markets, in East Africa. According to the CMA about Uganda, 50,000 individual Ugandans actively participate in the markets.

Many of Uganda's small and medium scale business people cite the fear of losing their money and lack of knowledge on how to invest in capital markets as a major barrier to their participation. "The level of awareness is high but level of knowledge is still low," Ms Achire said.

According to the findings based on a total of 456 respondents, 52.2 per cent of the respondents said they were aware of capital markets while 23 per cent said they didn't. The rest chose to remain neutral. In addition, 14 per cent of the respondents agreed that they know the activities that take place within the capital markets, 40 per cent remained neutral while about 32 per cent said they didn't know.


Source: Allafrica