Effective October 1, 2021, the Bank of Uganda (BOU) has appointed the United Bank for Africa (UBA) as a Primary Dealer bank. 

In 2017, BOU opened up the primary dealership system to all commercial banks, however, effective October 1, there were only seven primary dealer banks namely Absa, Baroda, Centenary, DFCU, Housing Finance Bank, Stanbic Bank and Standard Chartered Bank. 

The appointment of UBA brings the total number of dealer banks to eight.

The role of Primary Dealer banks is to lend the government money on behalf of the public and in exchange, provide treasury bills and bonds as collateral, in the primary market auction. 

“The Primary Dealer banks are thereafter, expected to facilitate the buying and selling of treasury bills and bonds to investors who do not have access to the primary market. This is referred to as the secondary market. 

“BOU is committed to making investing in Treasury Bills and Bonds easier and more accessible while also strengthening the operations and development of the primary and secondary market for Government Securities,” BOU Governor Emmanuel Tumusiime Mutebile said in a statement. 

In August, Government raised sh1 trillion (at cost) from the primary market auctions. Securities worth sh535.31b matured and were refinanced; while sh484.69b went towards financing other items in the government budget.

Yields or interest rates declined across all treasury bill tenors, partly attributed to increased demand for government securities. The annualized yields for August were 7.25%, 9.00% and 9.93% for the 91, 182 and 364-day tenors, respectively.