Global crises often unsettle financial markets, but they can also present opportunities for investors willing to take a long-term view, analysts and investment advisers said during a webinar hosted by SBG Securities Uganda Limited.
Speakers noted that the escalating tensions in the Middle East could introduce short-term market volatility but may also create strategic openings for disciplined investors and policymakers in Uganda.
“Such times come with a lot of uncertainty,” said Grace Semakula, chief executive of SBG Securities Uganda Limited, the investment and brokerage arm of Stanbic Uganda Holdings Limited.
“But these are not times to panic. They are times to take a patient, long-term view and consistently allocate funds,” she said.
According to Semakula, geopolitical disruptions often create moments for investors to reposition their portfolios and identify emerging opportunities, provided they remain focused on long-term fundamentals rather than short-term market noise.
Uganda’s economic position
Despite the global uncertainty, Uganda enters the period from a relatively strong position. Inflation has remained subdued, economic growth has been resilient and exports—particularly gold and coffee—have expanded significantly over the past year.
However, economists caution that prolonged global conflict could still have ripple effects on the domestic economy.
“We might see a protracted conflict,” said Christopher Legilisho of Standard Bank Group. “That could weigh on global growth and create spillovers to different countries, including Uganda.”
Central banks worldwide had been preparing to ease monetary policy through 2024 and early 2025 as inflationary pressures eased. But rising geopolitical tensions have raised the risk of higher oil prices and renewed inflation, potentially forcing policymakers to adopt a more cautious stance.
“Because of the conflict, we are starting to see expectations that inflationary pressures could return,” Legilisho said.
Uganda’s central bank, the Bank of Uganda, has kept its benchmark policy rate steady at 9.75% since October 2024. Analysts say the bank could delay any rate cuts—or even tighten policy—if inflation begins to accelerate.
Trade exposure and energy risks
Experts also warned that Uganda’s trade ties with the Middle East expose the economy to potential disruptions.
Gold exports—currently the country’s largest export earner—are heavily concentrated in the region. Uganda exports roughly $6 billion worth of gold annually, with about $5.2 billion destined for the United Arab Emirates.
“If producers are unable to ship gold to the UAE, refiners and exporters may struggle to find immediate alternative markets,” Legilisho said.
However, the disruption could also accelerate domestic policy initiatives. The Bank of Uganda has been preparing to launch a domestic gold purchase programme aimed at strengthening foreign-exchange reserves.
Energy markets present another potential risk. Higher oil prices would increase Uganda’s import bill because the country still relies heavily on imported refined petroleum products, much of which originate from the Middle East.
“You could see Uganda’s oil import requirements rise significantly if prices spike,” Legilisho said.
In the longer term, however, the outlook may improve as Uganda expects its first oil production later this year—an event that could significantly reshape the country’s trade balance.
Early market reactions
Financial markets have already begun reacting to the geopolitical tensions. The Ugandan shilling has weakened by about 3% since the conflict escalated, raising concerns about possible inflationary pressures if energy prices continue to rise.
In a worst-case scenario, Legilisho estimates inflation could reach around 8.3%, potentially prompting the central bank to raise interest rates. Higher borrowing costs could slow credit growth and moderate economic expansion.
Remittances could also be affected if instability disrupts the Middle East, where many Ugandans work and send money home.
Still, analysts say the extent of the impact will largely depend on how long the conflict lasts.
“If the crisis is resolved within a month, the economic impact would likely be limited,” Legilisho said. “But if it continues for several months, the pressures on growth and inflation could become more significant.”
Looking beyond volatility
Despite the uncertainty, investment advisers say market turbulence should not deter investors.
“Even through crisis, there are significant opportunities to explore,” Semakula said. “Our role as an investment partner is to help clients see beyond the immediate noise and make informed, long-term decisions.”
SBG Securities Uganda Limited ended 2025 with more than Shs540 billion in assets under management and added over 4,000 new clients during the year.
The firm was also recognised by the Capital Markets Authority Uganda as Collective Investment Scheme Manager of the Year.
For Uganda’s economy, analysts say the coming months may test resilience—but periods of uncertainty could also reward investors who remain disciplined and focused on long-term fundamentals.
