Bank of Uganda (BoU) has appointed United Bank for Africa (UBA) as a Primary Dealer bank, with effect from Friday, October 1, 2021.
This brings to eight the number of commercial banks that BoU has appointed as Primary Dealer banks. They are Absa, Bank of Baroda, Centenary Bank, dfcu Bank, Housing Finance Bank, Stanbic Bank, Standard Chartered Bank and United Bank for Africa.
The role of Primary Dealer banks is to lend Government money on behalf of the public and in exchange, provide treasury bills and bonds as collateral, in the primary market auction.
The Primary Dealer banks are thereafter expected to facilitate the buying and selling of treasury bills and bonds to investors who do not have access to the primary market. This is referred to as the secondary market.
Bank of Uganda says it is committed to making investing in treasury bills and bonds easier and more accessible while also strengthening the operations and development of the primary and secondary market for government securities.
In 2017, BOU opened up the primary dealership system to all commercial banks.
In August, Government raised Shs1 trillion (at cost) from the primary market auctions. Securities worth Shs535.31b matured and were refinanced; while Shs484.69b went towards financing other items in the government budget.
United Bank for Africa is a pan-African financial services group with operations in 20 African countries and offices in three global financial centres: London, Paris and New York.