Gov’t plans to raise sh2.4 trillion from primary dealer banks

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The central bank has opened a private bond placement to raise about sh2.4 trillion in the next three days ahead of the closure of the 2024/25 financial year.

The placement, which runs from May 26 to May 28, targets only primary dealer banks, according to the Bank of Uganda. The government regularly borrows through treasury bonds, but private placements are limited to a select group of institutional investors.

“This is a private offering, meaning it is exclusively for the primary dealer banks in Uganda. There are only eight licensed primary dealer banks, which means that retail investors are not invited to participate in this bond offering,” Alex Kakande, a financial market analyst, says.

“The plan is to raise close to sh2.4 trillion in this private placement, with a minimum bid of sh1 billion, an indicator that the government is currently in need of substantial funds, especially as they prepare for the upcoming elections.”

Earlier this month, Parliament approved a sh72.4 trillion budget for the 2025/26 financial year. Of that, sh29.5 trillion (38.5%) is earmarked for development programmes, while sh11.4 trillion (17.4%) will go to human capital development.

Governance and security are set to receive sh9.9 trillion (13.1%), and sh6.4 trillion (11.1%) has been allocated to transport infrastructure and related services.