Business
Uganda raises sh1.483 trillion from govt securities auctions
Out of the total amount raised, sh529.0 billion came from treasury bills, while sh954.69 billion was raised from treasury bonds.
Uganda raises sh1.483 trillion from govt securities auctions
By: Umaru Kashaka, Journalist @New Vision
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The Government of Uganda raised sh1.483 trillion from three auctions of treasury bills and treasury bonds in May this year, according to the latest Performance of the Economy Report by the Ministry of Finance for May 2026.
Out of the total amount raised, sh529.0 billion came from treasury bills, while sh954.69 billion was raised from treasury bonds.
The report shows that sh799.03 billion was used to refinance maturing securities, while sh684.65 billion was allocated to financing other items within the government budget.
Yields, or interest rates, on treasury bills remained broadly stable during the period under review, with slight increases recorded on some short-term instruments.
Specifically, yields on the 91-day and 182-day tenors rose to 10.9% and 11.3% in May, up from 10.4% and 11.2% respectively in the previous month.
The yield on the 364-day tenor remained unchanged at 12.1% in May.
Investor appetite for government securities remained strong throughout the month, with all treasury bill auctions oversubscribed.
The average bid-to-cover ratio stood at 2.15, indicating that demand was more than twice the amount offered in government auctions during the period.
The Government also held auctions for the 2-year, 5-year and 15-year bond tenors on the primary securities market during the month.
Specifically, yields on the 91-day and 182-day tenors rose to 10.9% and 11.3% in May, up from 10.4% and 11.2% respectively in the previous month.
The yield on the 364-day tenor remained unchanged at 12.1% in May.
Investor appetite for government securities remained strong throughout the month, with all treasury bill auctions oversubscribed.
The average bid-to-cover ratio stood at 2.15, indicating that demand was more than twice the amount offered in government auctions during the period.
The Government also held auctions for the 2-year, 5-year and 15-year bond tenors on the primary securities market during the month.
Except for the 15-year bond, yields on treasury bonds declined in May compared to previous issuances of similar securities.
Yields on the 2-year and 5-year bonds fell to 12.98% and 14.50%, down from 13.50% and 15.0%, respectively.
The decline in bond yields partly reflects market expectations of reduced government borrowing towards the end of the financial year, as government had already achieved over 90% of its planned domestic debt issuance for the 2025/26 financial year.
The yield on the 15-year bond remained unchanged at 15.75% in May.
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 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.
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.
Yields on the 2-year and 5-year bonds fell to 12.98% and 14.50%, down from 13.50% and 15.0%, respectively.
The decline in bond yields partly reflects market expectations of reduced government borrowing towards the end of the financial year, as government had already achieved over 90% of its planned domestic debt issuance for the 2025/26 financial year.
The yield on the 15-year bond remained unchanged at 15.75% in May.
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 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.
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.