Our Business
Risk and opportunity management
Key risks in 2024/25, treatment, opportunities, trend, and outlook
Legend
Risk is low
Risk is medium
Risk is high
Risk is likely to increase
Risk is likely to reduce
Risk is not likely to change
Risk 1: Cyber risk
Risk and mitigation
The Fund relies heavily on technology, and a major attack on its systems could potentially paralyse operations. To mitigate this risk, we conduct regular vulnerability assessments and penetration tests, addressing any security gaps proactively.
Opportunity
Attempted attacks provide us with an opportunity to review and assess the resilience of our systems.
Outlook
Cyber risk is likely to escalate due to increasing cyber threats globally and locally.
Capitals
Stakeholders
Material matters
Strategic objectives
Risk 2: Strategic risk
Risk and mitigation
Significant delays in execution of real estate projects, which could result in escalation of costs and reduction in anticipated revenue, due to bureaucracy in the procurement process. We minimise this risk by obtaining accreditations from PPDA on certain processes
Opportunity
The country's high housing deficit presents an opportunity for significant returns on real estate investments.
Outlook
We expect this risk to stabilise or decrease as we address the causes of the delays.
Capitals
Stakeholders
Material matters
Strategic objectives
Risk 3: Interest rate risk
Risk and mitigation
Interest rates affect interest income, which accounts for over 80% of the Fund’s total revenue. Significant decline in interest rates affects the Fund’s financial performance significantly. To minimise this risk, we are pursuing alternative investments to increase diversification.
Opportunity
Alternative investments create greater social impact and drive long-term sustainability.
Outlook
This risk is likely to increase if government reduces domestic borrowing.
Capitals
Stakeholders
Material matters
Strategic objectives
Risk 4: Market risk
Risk and mitigation
Appreciation of the UGX against foreign currencies, particularly the KES, which represents the largest portion of the Fund’s foreign currency-denominated assets, poses a significant currency risk to the Fund. We minimise this risk through allocation of more funds to the domestic market (About 64.32% of the portfolio as at 30 June 2025).
Opportunity
The appreciation of the UGX against foreign currencies enhances the country’s purchasing power, thereby supporting economic growth.
Outlook
The anticipated increase in foreign currency inflows from oil production is expected to strengthen the UGX against other currencies, which may in turn result in foreign exchange losses on regional investments.
Capitals
Stakeholders
Material matters
Strategic objectives
Risk 5: Compliance/Litigation risk
Risk and mitigation
The Fund considers potential litigation a key risk, as it can result not only in financial loss but also in reputational damage. To minimise this risk, we analyse potential areas of litigation and take proactive measures to address them. In addition, we conduct regular staff sensitisation on relevant laws and regulations to reduce the likelihood of non-compliance.
Opportunity
Proactive litigation assessments and regular staff sensitisation increase the Fund’s chances of success in of the event of litigation. Over the past 3 years, the Fund has successfully won 90.7 % of cases filed against it.
Outlook
Litigation risk is likely to remain elevated due to the nature and complexity of the Fund’s operations and the multiplicity its stakeholders.
Capitals
Stakeholders
Material matters
N/A
Strategic objectives