The Government of Uganda has raised UGX 1.1 trillion through a Treasury bond auction for September 2024, surpassing their initial target of about UGX 990 billion.
Of the Shs1.1 trillion, the 15-year Treasury bond returned a cut-off rate of 16.5% and fetched UGX 465 billion, followed by the 5-year bond with a cut-off rate of 16%, bringing in UGX 403 billion, while the 2-year bond got UGX 263 billion.
The results are better than those of July when lower bids were offered, leaving substantial cash unutilized.
In August, the government of Uganda raised UGX 1.3 trillion from the sale of Treasury bonds. Through the 10-year bond, the government raised about UGX450 billion, the 19-year-old bond raked in Shs650 billion while the two-year bond brought Shs289 billion.
Alex Kakande, a financial analyst, said the September auction, which saw a rebound in interest rates across the long-term treasury bonds, is good for investors.
“On average, rates have increased by 50 basis points from the lows experienced in July 2024 when the 15-year treasury bond was first sold,” he said.
“In the September auction, the Treasury accepted UGX 140 billion more than it had initially offered, despite the market presenting over UGX 1.5 trillion in tenders for this auction—nearly double the amount tendered,” he added.
Kakande explains that by end of September, the Government of Uganda will have borrowed at least UGX 6 trillion from the sale of treasury Bonds and bills in a space of 90 days.
“So far, its around UGX 5.3 Trillion borrowed. Now that’s unprecedented,” he says.