Global turmoil could reward patient investors, Stanbic analysts say

March 16, 2026 in U by Editor

Analysts say escalating geopolitical tensions may create short-term volatility in Uganda’s economy but could also open opportunities for long-term investors willing to look beyond market turbulence.

Global crises tend to trigger a familiar pattern in financial markets: currencies wobble, investors retreat to safety, and policymakers brace for economic spillovers.

Yet history suggests that periods of uncertainty can also become turning points for investors who remain disciplined while others panic.

That was the central message from analysts during a market outlook webinar hosted by SBG Securities Uganda Limited, where economists argued that while escalating tensions in the Middle East could unsettle markets in the short term, they may also create openings for long-term investors and policy reform in Uganda.

“Such times can come with a lot of uncertainty,” said Grace Semakula, chief executive of SBG Securities Uganda Limited, the brokerage and investment management 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.”

Her message reflects a broader investment principle: market dislocations often present opportunities for investors who focus on fundamentals rather than short-term volatility.

Uganda enters the current geopolitical turbulence from a relatively stable macroeconomic position.

Inflation has remained contained, economic growth has held steady, and export earnings — particularly from gold and coffee — have strengthened over the past year.

But economists warn that even relatively insulated economies cannot escape the ripple effects of global instability.

“We might see a protracted conflict,” said Christopher Legilisho, an economist at Standard Bank Group.

“That could weigh on global growth and create spillovers to different countries, including Uganda.”

One immediate concern is the potential return of inflationary pressure.

For much of 2024 and early 2025, central banks worldwide were preparing to ease monetary policy as inflation moderated following the post-pandemic surge. Rising geopolitical tensions, however, could disrupt that trajectory.

Oil markets are particularly sensitive to instability in the Middle East, and higher energy prices often feed quickly into global inflation.

“Because of the conflict, we are starting to see expectations that inflationary pressures could return,” Legilisho said. “Central banks may become more cautious or preventative in their policy stance.”

Uganda’s monetary authorities have so far maintained a steady approach. The Bank of Uganda has kept its benchmark policy rate at 9.75 percent since October 2024.

But if global commodity prices surge, analysts say the central bank may delay interest-rate cuts — or even tighten policy — to keep inflation under control.

Trade exposure to the Gulf

Uganda’s deepening trade ties with the Middle East also create a channel through which the conflict could affect the domestic economy.

Gold has become Uganda’s largest export earner in recent years, with most shipments destined for the United Arab Emirates.

Annual gold exports are estimated at about $6 billion, roughly USD5.2 billion of which flows to the Gulf market.

“If producers are unable to ship gold to the UAE, refiners and exporters may struggle to find immediate alternative markets,” Legilisho said.

Yet disruptions could also accelerate policy initiatives designed to strengthen economic resilience.

The central bank has been preparing a domestic gold purchase programme aimed at boosting Uganda’s foreign-exchange reserves — a move analysts say could become more relevant if export flows face temporary interruptions.

Energy costs and the oil paradox

Energy markets represent another potential vulnerability.

Uganda remains heavily dependent on imported refined petroleum products, much of which originates from the Middle East. Any spike in global oil prices would therefore raise the country’s import bill and could put pressure on inflation.

“You could see Uganda’s oil import requirements rise significantly if prices spike,” Legilisho said.

Yet the same global energy dynamics could ultimately work in Uganda’s favour.

The country is expected to begin oil production from the Lake Albert Oil Project later this year — a milestone that could gradually transform the country from a pure energy importer into an oil exporter.

Over time, that shift could improve Uganda’s trade balance and strengthen foreign-exchange inflows.

Financial markets have already begun reacting to the uncertainty.

The Ugandan shilling has weakened by roughly three percent since tensions escalated, reflecting broader global risk aversion.

Inflation could also climb if energy prices continue rising. In an extreme scenario, Legilisho estimates inflation could reach around 8.3 percent — a level that could prompt tighter monetary policy and slower credit expansion.

Remittance flows could also face risks. Uganda receives significant inflows from citizens working across the Middle East, and prolonged regional instability could affect those earnings.

However, the scale of the impact will depend largely on the duration of the crisis.

“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.”

For investors, the lesson may be less about avoiding volatility and more about navigating it.

Periods of geopolitical tension often trigger sharp asset-price movements, allowing disciplined investors to reposition portfolios or accumulate assets at lower valuations.

“Even through crisis, there are significant opportunities to explore,” Semakula said.

SBG Securities Uganda Limited ended 2025 with more than UGX540 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, the coming months may test resilience against forces far beyond its borders. But for investors able to look beyond the immediate turbulence, periods of global uncertainty may also mark the beginning of new opportunities.