Uganda targets UGX990 billion in new treasury bond sale

KAMPALA, Uganda — The Bank of Uganda has announced a major UGX 990 billion Treasury bond auction, set to take place on April 15, 2026, in a move aimed at attracting long-term investors and supporting government financing needs.

The auction, conducted under the Public Finance Management Act, 2015, will involve the reopening of three existing government bond tenures, offering a mix of medium- and long-term investment options.

According to the central bank, the auction will be structured as follows: a 3-year bond worth UGX 230 billion at a 15.55 percent coupon maturing on July 6, 2028; a 10-year bond worth UGX 330 billion at a 16.25 percent coupon maturing on November 8, 2035; and a 20-year bond worth UGX 430 billion at a 15.00 percent coupon maturing on June 18, 2043.

The offering underscores continued government reliance on domestic borrowing to finance budgetary needs while also deepening Uganda’s capital markets.

Investors considering longer tenures are expected to benefit from more favorable tax treatment. While the 3-year bond attracts a 20 percent withholding tax, the 10-year and 20-year bonds are taxed at a lower rate of 10 percent, making them particularly attractive to pension funds and institutional investors seeking stable, long-term returns.

The central bank has maintained strict participation rules for the auction. Competitive bidding is limited to eight licensed Primary Dealer Banks, including Absa, Citi, Centenary, dfcu, Equity, Housing Finance, Stanbic, and Standard Chartered, with a minimum bid requirement of UGX 200.1 million. Non-competitive bids are open to other commercial banks and individual investors through the Central Securities Depository, with a minimum investment of UGX 100,000 and a cap of UGX 200 million per tenor.

All successful bidders will be allocated securities at a single price, determined by the lowest accepted price per 100, which corresponds to the highest accepted yield.

The auction will take place on April 15, 2026, with settlement scheduled for April 16, 2026. The Bank of Uganda has set a submission deadline of 10:00 am on auction day and retains the right to adjust the amount offered or reject applications depending on market conditions.

Market analysts expect the relatively high yields, particularly on longer-dated bonds, to attract strong demand from institutional investors amid limited alternative long-term investment opportunities. The auction comes as government borrowing remains elevated, with Treasury bonds continuing to play a central role in financing Uganda’s fiscal deficit while offering relatively secure returns to investors.