Country Summary

Macroeconomic performance

Real GDP growth was an estimated 5.3% in 2018, up from 5.0% in 2017. On the supply side, industry (9.7% growth) and services (8.2%) contributed considerably, while agriculture showed slower growth (4.5%). On the demand side, greater investment in public infrastructure was the main contributor to growth, while the current account registered a deficit due to growing imports of capital goods, thereby stymieing growth.

The fiscal deficit widened to an estimated 4.7% in 2018, driven largely by ongoing public infrastructure investments supported by borrowing from both external and domestic sources. The country’s debt-to-GDP ratio was estimated at 40.0% in 2018, with external debt at 28.1% of GDP. The 2017 debt sustainability assessment indicated that Uganda is at a low risk of debt distress. Inflation fell to an estimated 3.2% in 2018, due mainly to lower food inflation and prudent monetary policy.

Tailwinds and headwinds

Real GDP growth is projected to improve to 5.5% in 2019 and 5.7% in 2020. Increased infrastructure investment, foreign direct investment in the oil and mining subsectors, and reforms to improve the business environment will drive stronger growth over the short and medium term. The current account deficit is projected to stabilize at 4.9% in 2019 and further weaken to 5.4% in 2020, and the fiscal deficit is projected to further narrow to 4.4% in 2019 and 4.3% in 2020. Headline inflation is projected to increase to 4.3% in 2019 and 4.8% in 2020.

Downside risks include adverse weather shocks, given agriculture’s high reliance on rain, and the slow

implementation of infrastructure projects. Despite the government’s recent large public infrastructure investments, the quantity and quality of transport, water and sanitation, energy, and agriculture infrastructure remain inadequate to meet the country’s economic transformation and development objectives. The country continues to face shortages of skilled labor, especially in services and manufacturing, and several business climate challenges that undermine competitiveness: heavy burdens of regulations for registering and obtaining trading licenses and a high administrative burden of taxes.

Weaknesses in public sector management and governance remain. Performance in budget credibility and controls are on a positive trajectory but still at a low levels. Commitment controls are underperforming, contributing to a buildup of arrears, while inadequate financial management controls have led to mischarges of expenditures. Public investment management is affected by weak institutional and human capacities that often lead to project delays. And the country remains highly vulnerable to adverse climate changes, such as droughts.

Agriculture remains a strategic opportunity for spearheading the government’s development objectives. Uganda is abundantly endowed with natural resources, including oil, gas, and mineral resources and a natural habitat for diverse wildlife that could support the tourist industry. The country continues to post high economic growth and price stability driven by prudent macroeconomic policies. And its strategic location allows it to be accessible to Central and East African markets, including Common Market for Eastern and Southern Africa members, making it a possible transportation, logistics, and transit hub for regional trade.

Source: African Economic Outlook 2019

Fixed Income


  • The government securities yield curve extended to 15 years with 4benchmark points along the curve (2-5-10 and 15 years).
  • Uganda is 13th in the ABMDI 2017 Ranking Report. 

Issuance strategy 

The actual planned volume of net domestic government securities issuance each year is decided as part of the Budget formation process, and is guided by an assessment of market and economic conditions, budgetary priorities, and by the full set of guidelines that are set out in the Debt Strategy.
Debt is issued in line with the 5-yearly Debt Strategy, which guides overall debt issuance and management policy. Ministry of Finance conducts annual Debt Sustainability Analyses to establish the extent to which Uganda’s debt meets solvency and liquidity sustainability criteria and the extent to which the debt is exposed to different forms of risk. An auction calendar is published on the central bank and Ministry of Finance websites at te start of the fiancial yearl. All government securities are sold by via a single price auction method.. 

Benchmark issues 

here are five (5) benchmark maturities (2, 3, 5, 10 and 15 years) that the government maintains by re-issuing them regularly with large issue amounts to increase secondary market liquidity.

   Yield curve calculation models

Building a benchmark yield curve is a consideration for issuance. The country built a yield curve based on simple interpolation method. This curve is an implied yield curve from on-the-run yields quoted by commercial banks

  Interpolation methods

Where there is no yield for a certain point along the yield curve (off-the-run securities), linear interpolation is used to generate an appropriate yield. 

  Yield curve managed by

The yield curve is produced by the Bank of Uganda

  Yield curve Display platform  

The yield curve is accessed from  the Bank of Uganda website

  Challenges in building an efficient yield curve  

  • Market fragmentation 
  • Limited secondary market 
  • Narrow investor base 

Guide to Buying Bonds

Procedures for market participation

Any investor who wishes to purchase Uganda government securities in the primary market and/or secondary market must contact a commercial bank in Uganda and have or open an account in the Central Securities Depository (CSD) at Bank of Uganda. The type of investors that could participate in the government securities market as listed on the Central Bank of Uganda website are:

  • Commercial banks
  • Insurance firms
  • Individuals
  • Government agencies
  • Pension funds
  • Individuals (of at least 18 years)

Offshore investors, provided they opened an account beforehand at the CSD, and invest through a Ugandan commercial bank.
In the secondary market, the Uganda Securities Exchange (USE) provides a list of licensed brokers and investment advisors authorized to deal in Uganda government bonds, in additiona to commercial banks.
Further information on Uganda Securities Market is provided on the Central Bank website.

Settlement cycle

The settlement time is T+1 in the primary market. In the secondary market, the time falls down to T+ 0 or same day settlement. In the secondary market, investors could however agree on another settlement cycle depending on their circumstances.


There is a 20% withholding tax applicable on interest income earned by investors, regardless of residency on government securities with maturities less than 10 years; for longer dated bonds of 10 years and above, the withholding tax rate on interest income is 10%. There is no tax on trades in the secondary market. Uganda has signed Double Taxation Agreements with a number of countries which allows investors from those countries to pay lower taxes than mentioned here.


Rating Agency Current rating Outlook
Moody's B2 Stable
Fitch B+ Stable
Standard and Poor's B Stable

Primary Dealers

All the twenty six (26) licensed commercial banks (2019) are permitted to work as Primary Dealers for government securities in Uganda. The Primary Dealer system is currently under reviehe to provide for full insurance of auction subscriptions and increase vibrancy in the secondary market through firm two-way price quotes.

Openness to international investors

There are no restrictions imposed on foreign investors in the bond market in Uganda.
Residents and non-residents alike are authorized to participate in the government securities market.

Capital controls

Capital account was fully liberalized in 1997, along with the foreign exchange market.

Restriction on FX and profit repatriation

Foreigners can hold foreign exchange accounts and purchase FX at any commercial bank without the approval of the central Bank of Uganda (BoU).

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