Economic performance and outlook: Economic performance generally remained strong despite the recent slowdown in real GDP growth, which is projected to reach 5.9% in 2018, up from 4.8% in 2017 and 2.3% in 2016. The increase in economic growth in 2018 is expected to be driven mainly by public infrastructure investment; recovery in manufacturing and construction; and improvements in the services sector, particularly financial and banking, trade, transport, and information and communication technology services.
Macroeconomic evolution: Uganda pursued a cautious expansionary fiscal policy stance to support key infrastructure projects in transport and energy, while keeping recurrent expenditure under control. The overall budget deficit was slightly high in 2016, improved in 2017, and is projected to increase in 2018 and 2019. The balance of payments deteriorated, mainly as the result of external economic headwinds, including low commodity prices due to slow growth in Europe and China and tightening global financial and monetary conditions. The macroeconomic policy stance remains focused on containing inflationary pressures, enhancing exchange rate stability, and stepping up domestic resource mobilization growth by 0.5 percentage point of GDP. Uganda continues to have a low risk of debt distress. However, the debt-to GDP ratio is increasing and is projected to reach 38.6% of GDP in 2016 and 45% by 2020 from 34.1% in 2014. At these growth rates, the debt burden is growing faster than government resources; the revenue-to-GDP ratio stands at only 13.4%. However, the most recent International Monetary Fund and World Bank Group debt sustainability analysis in 2016 gives Uganda’s risk of debt distress a low rating.
Tailwinds: The main tailwinds for the 2018 economic outlook include increased agricultural production due to better weather conditions; higher foreign direct investment (FDI) flows following the recent issuance of oil exploration licenses; and the expected decision by the government to invest in oil infrastructure development in early 2018, given the projected increase in oil prices to an average of $55 a barrel in 2017–18 from $43 a barrel in 2016.
Headwinds: Major external risks to economic performance include low commodity prices and demand for the country’s exports in major markets, appreciation of the U.S. dollar due to expected monetary tightening by the United States, tightening of global financing conditions that could discourage FDI and development assistance, adverse spillover shocks from fragile regional neighbours, and adverse environmental shocks. Major internal risks include reduced domestic revenue mobilization and higher public spending on contingencies, poor institutional capacity and governance, and weak public financial and investment management systems.
- 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.
The annual budget clearly sets out the volume of net Treasury securities issuance to be conducted for fiscal policy purposes each year, and how the proceeds will be used. Planned net issuance must be fully consistent with the programmed path for the fiscal deficit, and the volume of planned forms of all other financing.
There are 4 benchmarks maturities: 2-5-10 and 15 years. The government aims to create benchmark for 2-5-10 and 15 years with large issue amounts.
Guide d’achat des obligations
Procedures for market participation
Any investor who wishes to purchase government securities in the primary market must contact a Primary Dealer (PD) and have or open an account at the Central Securities Depository (CSD). The list of investors that could participate in the government securities market is listed in the Central Bank website; they are:
- Commercial banks
- Insurance firms
- 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 Primary Dealer.
In the secondary market, the Uganda Securities Exchange (USE) provides a list of licensed brokers and investment advisors authorized to deal in the CSD.
Further information on Uganda Securities Market is provided in the Central Bank website.
The settlement time is T+1 in the primary market. In the secondary market, the time falls down to 0.
There is a 10% withholding tax applicable on interest income earned by investors, regardless of residency.
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 market.
Capital controls were fully liberalized in 1997, along with the foreign exchange market.
Restrictions on foreign exchange and profit repatriation
Foreigners can hold foreign exchange accounts and purchase FX at any commercial bank without the approval of the Bank of Uganda (BoU).
In Jan 2014, S&P lowered the long-term credit rating on Uganda to B in the fear that the budget deficit of the country will widen, and following the retreat of donors in 2012 due to allegations of corruption in the country.
List of Primary Dealers
The Primary Dealership system became operational in 2005. The BoU has appointed six primary dealers to receive bids from investors; they are:
Documents et ressources
Documents - Ministère des Finances
Documents - Banques Centrales
- Bank of Uganda Act (57 kB)
- Uganda_Auction_Procedures.pdf (204 kB)
- BoU-Fin_Stab-June_2014.pdf (1.6 MB)
- BoU-State_of_Eco-Mar_2015.pdf (1.0 MB)
- BoU-Supervis_Report_2014.pdf (1.2 MB)
- BoU_AR_2013-14.pdf (2.7 MB)
Documents - Stock Exchange
- USE-Equity_Trading_Rules-2015.pdf (4.7 MB)
Documents - Capital Market Regulator
- Capital Markets Authority Act (267 kB)
- Uganda_Cap_Mkts_Strat_plan-2013-16.pdf (2.3 MB)
- Uganda_CMA-AR_2014.pdf (2.7 MB)
Documents - Other sources
- Uganda_Vision_2040.pdf (21 MB)