Bank of Uganda has invited investors to participate in a Shs990 billion Treasury bond auction as the government seeks to raise funds to support the implementation of its record Shs84.39 trillion budget for the 2026/27 financial year.
The auction, scheduled for Wednesday, June 10, features three Treasury bond instruments with varying maturity periods. Investors will have the opportunity to bid for a three-year bond worth Shs230 billion, a 10-year bond valued at Shs330 billion, and a 20-year bond amounting to Shs430 billion. All three securities are reopenings of previously issued government bonds.
Successful bidders are expected to settle their purchases on June 11.
The move underscores the government’s continued reliance on the domestic debt market to finance development projects and other public expenditures as it rolls out priorities under the Fourth National Development Plan (NDP IV).
Treasury bonds are long-term debt instruments through which the government borrows money from investors and repays the principal with interest over an agreed period. They are widely regarded as one of the safest investment options because they are backed by the government.
The three-year bond carries an annual coupon rate of 15.55 percent, while the 10-year bond offers 16.25 percent and the 20-year bond provides a 15 percent annual coupon. These returns are expected to attract investors seeking stable income and long-term investment opportunities.
Market participants believe the longer-dated securities could draw strong interest from pension funds, insurance companies, and fund managers, which typically favour investments that provide predictable returns over extended periods.
The Treasury bond sale comes at a critical time as the government seeks to close the financing gap for the new financial year. Although the Uganda Revenue Authority has been tasked with collecting Shs44.5 trillion in domestic revenue, additional funding will still be required through borrowing, grants, and external financing.
According to the Bank of Uganda, competitive bids will only be accepted through authorized Primary Dealer Banks. Retail and institutional investors can also access the securities through commercial banks and other approved channels.
The minimum competitive bid has been set at Shs200.1 million, while non-competitive investors can participate with investments starting from Shs100,000. Non-competitive bids of up to Shs200 million per bond tenor will be accepted at the auction’s cut-off yield.
The central bank said all successful bidders will receive allocations at a single price based on the highest accepted yield. However, it retains the discretion to increase or reduce the amount offered and to accept or reject bids depending on prevailing market conditions.
Uganda’s domestic debt market has continued to expand in recent years, with Treasury bills and bonds becoming increasingly important sources of financing for government programmes while providing investors with relatively secure long-term investment opportunities.
Analysts say the outcome of this week’s auction will offer valuable insight into investor confidence and demand for government securities as the country prepares to implement its largest national budget on record.