By David Mwanje
Kampala- The Bank of Uganda (BOU), in partnership with the Treasury Office, unveiled a transformative treasury bond auction calendar for the financial year 2025/2026. The announcement, shared on their website , marks the official start of a new investment era in Uganda.
Highlighting the release is the introduction of a pioneering 25-year treasury bond maturing in 2050, with semi-annual payments in August and February, alongside the return of popular options like the 16.25% 10-year bond (maturing 2035) and a new 5-year bond (maturing 2030). This bold financial strategy aims to fuel Uganda’s infrastructure growth amid a projected 6.2% GDP increase in 2025, as forecasted by the World Bank.
The calendar reflects a strategic shift in Uganda’s debt management, responding to global financial trends. The 25-year bond, a rarity in East Africa, targets young and ambitious investors seeking longterm wealth, offering a unique opportunity in a region where such instruments are scarce.
The 16.25% coupon on the 10-year bond far exceeding the U.S. 10-year Treasury note yield of approximately 4.5% suggests Uganda is capitalizing on its emerging market status, possibly anticipating higher inflation or risk premiums driven by volatile commodity prices. The discontinuation of the 2029 5-year bond paves the way for the new 2030 maturity, aligning with a global trend toward extended debt horizons, as highlighted in recent Journal of Finance studies (2023), which revealed emerging markets using long-term bonds to stabilize fiscal policy.
For Ugandan citizens, these bonds present a wealth building opportunity. The 16.25% gross yield (14.6% net after a 10% withholding tax) outstrips traditional savings rates (5-7% in local banks), providing a reliable income stream for households, pension funds, and small businesses.
The 25-year bond allows young Ugandan investors to secure high returns over decades, ideal for retirement or legacy planning, with flexible payment schedules aiding cash flow management. Financial experts recommend laddering spreading investments across maturities (5, 10, 15, 20, 25 years) to balance risk and ensure liquidity, while participation directly funds national projects like the $2.9 billion Karuma Hydropower Project and the Kampala-Entebbe Expressway, fostering economic ownership and job creation.
This initiative could stabilize Uganda’s fiscal framework, reducing reliance on costly commercial debt as the current account deficit narrows to 7.9% of GDP in 2023 (African Development Bank), aligning with the IMF’s extended Credit Facility goals for 2025/26. The capital raised could accelerate infrastructure development, boosting construction (6.5% growth in 2023), trade, and tourism, potentially enhancing Uganda’s credit rating currently B by Fitch and attracting foreign investment. However, over issuance or low uptake risks straining public finances, especially if global interest rates rise, increasing debt servicing costs.
Bank of Uganda Governor Michael Atingi-Ego, recently emphasized the initiative’s potential, stating, “Treasury bonds are a cornerstone of our financial strategy, offering Ugandans a secure investment while funding critical infrastructure participation is key to our nation’s growth.”
Earlier, at a financial policy forum in Kampala, Atingi-Ego added, “The introduction of the 25-year bond reflects our confidence in Uganda’s long-term economic stability, inviting citizens to invest in their future.” He further noted that these bonds provide competitive returns, making them an attractive alternative to informal savings, and he encouraged widespread uptake to strengthen our economy.
Ministry of Finance Permanent Secretary Ramathan Ggoobi, in interview with UBC said that this calendar strengthens ministry’s domestic resource mobilization, ensuring funds for development projects that will transform Uganda’s economy. While State Minister for Finance, Planning and Economic Development, Henry Musasizi, remarked during a parliamentary session in Kampala “Treasury bonds are a safe haven for Ugandan savers, supporting government initiatives while offering steady returns.” And he committed to expanding the bond market to reduce external borrowing, fostering economic resilience.”
Financial analyst Kakande Alex, commenting on X , noted, “The 16.25% coupon on the 10-year bond is a game-changer, offering Ugandans a high-yield investment to fund national growth—don’t miss the August auction!”
As the first auction approaches in August, Uganda stands poised to redefine its financial landscape, with government leaders and analysts banking on widespread participation to unlock a new era of prosperity.
