Kampala, Uganda | April 17, 2025 – The Bank of Uganda (BoU) successfully raised Shs 210.6 billion in its April Treasury bond auction, showing strong investor confidence despite bids topping a staggering Shs 1.3 trillion.
The April 16 auction featured re-openings of three government bonds: a 2-year bond maturing in July 2026, a 5-year bond due in August 2029, and a long-term 15-year bond maturing in June 2039.
The standout performer was the 15-year bond, which offered the highest yield at 17%. It received bids worth Shs 666.3 billion, yet only Shs 28.97 billion was accepted through non-competitive bidding—an approach that allows bidders to accept the yield determined by the market without negotiation.
The 2-year bond attracted Shs 290.1 billion in bids and was priced with a yield of 15.75%, with the central bank accepting Shs 56.6 billion—mostly through competitive bids. Meanwhile, the 5-year bond with a yield of 16.50% drew Shs 374.9 billion, from which Shs 125.1 billion was accepted.
Bid-to-cover ratios, used to measure demand strength, showed remarkable interest in the 15-year security, standing at 23.00. The 2-year and 5-year bonds registered ratios of 5.12 and 2.99 respectively, all indicating strong market appetite.
Although BoU had offered Shs 990 billion across the three tenors, it took a conservative stance by accepting only a fraction of the bids to manage inflationary pressures and control liquidity.
All winning bids will be settled on April 17, 2025.
Investor Confidence in Uganda’s Economic Stability
Analysts suggest that the intense interest in long-term bonds signals market confidence in Uganda’s macroeconomic future and fiscal management. With interest rates stabilizing and inflation on a downtrend, long-term investors appear ready to commit to government paper at attractive yields.
The outcome underscores Uganda’s strong position in the domestic debt market and the central bank’s strategic caution amid dynamic financial conditions.
