The Bank of Uganda (BoU) has announced a Treasury bond auction worth Shs990 billion as the government intensifies efforts to mobilise funds for the implementation of its Shs84.39 trillion budget for the 2026/27 financial year.
The auction, which is set to take place on June 10, offers investors an opportunity to purchase government securities across three different maturities. The central bank is seeking to raise Shs230 billion through a three-year bond, Shs330 billion through a 10-year bond, and Shs430 billion through a 20-year bond. The securities are reopenings of existing Treasury bonds already trading in the market.
Investors whose bids are successful will be required to settle their purchases on June 11.
The latest bond sale highlights the government’s continued use of the domestic debt market as a key source of financing for national development programmes and public expenditure commitments under the Fourth National Development Plan (NDP IV).
Treasury bonds are government-backed investment instruments that allow investors to lend money to the state in exchange for regular interest payments and repayment of the principal amount upon maturity. Due to their sovereign backing, they are generally considered among the safest investment options available in the market.
According to details released by the central bank, the three-year bond carries an annual interest rate of 15.55 percent, while the 10-year and 20-year bonds offer coupon rates of 16.25 percent and 15 percent respectively.
The attractive yields are expected to generate strong demand, particularly from institutional investors such as pension funds, insurance firms and asset managers that typically favour long-term investments capable of delivering predictable returns over extended periods.
The bond auction comes as government seeks to bridge its financing needs for the new fiscal year. While the Uganda Revenue Authority has been assigned a domestic revenue collection target of Shs44.5 trillion, additional resources will still be required through borrowing, grants and external financing arrangements.
BoU said competitive bids will only be submitted through authorised Primary Dealer Banks, although both individual and institutional investors can participate through commercial banks and other approved investment channels.
The minimum competitive bid has been set at Shs200.1 million, while non-competitive investors can invest from as little as Shs100,000. Non-competitive bids of up to Shs200 million per bond tenor will be accepted at the auction’s final cut-off yield.
The central bank further noted that successful bidders will receive allocations at a uniform price determined by the highest accepted yield. However, it retains the authority to adjust the amount offered or reject bids depending on market conditions and investor demand.
Uganda’s domestic securities market has grown steadily over the years, with Treasury bonds and Treasury bills playing an increasingly important role in financing government operations while offering investors a secure avenue for wealth preservation and income generation.
Financial analysts say the results of the auction will provide an important indication of investor appetite for government debt and confidence in the country’s economic outlook as Uganda moves to implement its largest national budget to date.
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