The Government of Uganda recognises the Ugandan Diaspora as a powerful resource in the development of the economy, as viewed from the significant size of the remittances from abroad, among others. Owing to this, deliberate efforts have been made by the Government, with support from the UNDP, to increase awareness on investing in Government of Uganda securities, with a medium-long term aim of issuing bonds specifically targeted to the Diaspora.
Why should I invest in Government bills and bonds?
- These are risk free, liquid and provide a reasonable and consistent return to the investors
- Bond coupon payments are made every six months and you have an opportunity to re-invest the coupon
- Bonds can be used as collateral for loans
- The investment horizon ranges from 91-days, 182-days, 364-days, 2 years, 3 years, 5 years, 10 years and 15 years
- A bond can be sold on the secondary market for a capital gain
- Investment opportunities avail themselves at least three times a month; twice for Treasury bills, once for Treasury bonds
- Initial investment of UGX 100,000 only
- Investing in Government bonds is one way in which you can make a contribution to the development of the economy.
Real life examples of how to benefit from bond investments
The infant/school boy/girl; can use this as a savings opportunity since rates are usually competitive, compared to savings accounts, etc. The minimum investment size of UGX 100,000 would suit this group
The Business man/woman; Cash in a bond can be used as collateral for a loan;
- The Business man/woman; Cash in a bond can be used as collateral for a loan;
- The Retired worker; A constant cash-flow is available if one invests his retirement package gradually in a bond, while preserving Capital
- A Diaspora worker sending funds to his/her family for fees; they could invest in a bond, and the coupon could pay the fees
- A Diaspora worker interested in working for a target period; the infrastructure developed from the proceeds of the bond will enable them find a better environment at home when they return (e.g., the Israelis after the holocaust)
How do I start investing?
- Open a Central Securities Depository system (CSD) account with a Primary Dealer bank (Barclays, Baroda, Stanbic, Standard Chartered, DFCU and Centenary)
- An SSL (Standard Secure Language) Certificate will be sent to your email address; follow the instructions in the email and download it onto your PC
- You will receive the bond prospectus two-weeks ahead of the auction
- You could consult the BOU website to view the prevailing market yields from the yield curve; which will guide you as you price your bid.
- You then submit your bids online; this way, a message will go to your commercial bank, which will in-turn update your CSD profile
- Bond results will be sent to your emails (or you can log onto your account and monitor your profile)
- Bond coupons and interest will be paid directly into your local account
Assistant Director, FMDS
Financial Markets Department
Bank of Uganda