Business
Govt securities fetched over sh2.6trillion in August—report
A total of sh346.77b was raised from treasury bills, while sh2.281 trillion was raised from treasury bonds, the Ministry of Finance’s performance of the economy report for August 2026 indicates.
Govt securities fetched over sh2.6trillion in August—report
By: Umaru Kashaka, Journalist @New Vision
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The Ugandan government raised sh2.628 trillion through three auctions of treasury securities on the domestic primary market in August 2026, the latest figures show.
A total of sh346.77b was raised from treasury bills, while sh2.281 trillion was raised from treasury bonds, the Ministry of Finance’s performance of the economy report for August 2026 indicates.
Of the total amount raised, sh2.027 trillion was used for refinancing maturing securities, while the remaining sh600.41b was allocated towards financing other items in the budget.
Treasury bills are short-term government securities issued for 91 days, 182 days and 365 days (three, six and 12 months respectively), with interest paid at maturity alongside the principal.
Treasury bonds are longer-term securities ranging from two to 15 years, with interest paid semi-annually and the principal repaid at maturity.
The report also says yields on treasury bills continued to decline in August 2026 except for the 91-day tenor, which remained unchanged at 10.4%, compared to the previous month.
Yields for the 182-day and 364-day tenors declined to 10.5% and 11.0% in August 2026 from 10.7% and 11.5%, respectively, in July 2026.
Demand for Government securities remained high during the month of August, with all treasury bill auctions oversubscribed.
The average bid-to-cover ratio stood at 2.42, indicating that demand was more than twice the amount offered, except for the 25-year bond. The Government held auctions for all other tenors of long-term instruments (treasury bonds) in August 2026.
The instruments included the 2-year, 3-year, 5-year, 10-year, 15-year, and 20-year bonds. Just like the previous month (July), yields on treasury bonds continued to decline in August 2026 in comparison to the rates registered in previous issuances of similar securities.
The report also says yields on treasury bills continued to decline in August 2026 except for the 91-day tenor, which remained unchanged at 10.4%, compared to the previous month.
Yields for the 182-day and 364-day tenors declined to 10.5% and 11.0% in August 2026 from 10.7% and 11.5%, respectively, in July 2026.
Demand for Government securities remained high during the month of August, with all treasury bill auctions oversubscribed.
The average bid-to-cover ratio stood at 2.42, indicating that demand was more than twice the amount offered, except for the 25-year bond. The Government held auctions for all other tenors of long-term instruments (treasury bonds) in August 2026.
The instruments included the 2-year, 3-year, 5-year, 10-year, 15-year, and 20-year bonds. Just like the previous month (July), yields on treasury bonds continued to decline in August 2026 in comparison to the rates registered in previous issuances of similar securities.
Yields for the 2-year, 3-year, 5-year, 10-year, 15-year and 20-year reduced to 11.70%, 12.0%, 13.75%, 15.0%, 15.20% and 15.65%, down from 12.50%, 12.40%, 14.25%, 15.45%, 15.65% and 15.95%, respectively.
The continued decline in yields on both treasury bills and treasury bonds was mainly driven by strong investor demand, supported by the continued reinvestment of proceeds from maturing the Government securities into new issuances.
This was facilitated by the large repayments made during the first two months of quarter one of the financial year 2026/27, amounting to approximately sh4,286.44b, which provided investors with funds to participate in subsequent auctions.
Government securities are considered risk-free investments that provide returns and a consistent source of income over a specified period.
Analysts say investors who purchase these securities are effectively lending money to the Government, which repays them after a fixed period known as maturity.
They also note that investing in government securities is a straightforward process done through the Central Bank, commercial banks or investment banks.
The continued decline in yields on both treasury bills and treasury bonds was mainly driven by strong investor demand, supported by the continued reinvestment of proceeds from maturing the Government securities into new issuances.
This was facilitated by the large repayments made during the first two months of quarter one of the financial year 2026/27, amounting to approximately sh4,286.44b, which provided investors with funds to participate in subsequent auctions.
Government securities are considered risk-free investments that provide returns and a consistent source of income over a specified period.
Analysts say investors who purchase these securities are effectively lending money to the Government, which repays them after a fixed period known as maturity.
They also note that investing in government securities is a straightforward process done through the Central Bank, commercial banks or investment banks.