Bank Of Uganda Treasury Bonds Explained – What Investors Should Know (2025)
If you’re curious about how government bonds in Uganda work, you’re not alone. Every month, the Bank of Uganda issues treasury bonds — offering Ugandans a safe and structured way to earn interest on their money. But how does it all work behind the scenes?
This guide breaks down key points from the official General Prospectus for Government of Uganda Bond Issuances into simple, practical insights — perfect for beginners and growing investors alike.
What Are Treasury Bonds?
Treasury bonds are loans you give to the government. In return, the government pays you interest every 6 months and gives back your full amount at the end of the bond’s term.
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Bonds come in 2, 3, 5, 10, 15, and 20-year durations
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Coupon rate: The fixed interest rate you earn
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Maturity date: When your original investment is returned
How the Auction System Works
Uganda holds a bond auction every 28 days. Here’s how it goes:
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The Bank of Uganda announces the auction about a week before
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Investors submit bids through their Central Depository System (CDS) account
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You can choose to:
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Set your own rate (competitive bid – UGX 200M+)
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Accept market yield (non-competitive – UGX 100K minimum)
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All successful bids receive the same yield, known as the cut-off yield
Settlement happens the next day after the auction (T+1).
How Interest Is Paid
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Bonds pay interest twice a year — every 182 days
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Payments go to your registered bank account
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If a payment date falls on a public holiday, it’s moved to the next business day
Example:
If you invest in a 5-year bond at 14.125%, you’ll receive UGX 70,625 every 6 months for every UGX 1 million you invest.
Who Can Invest?
- Ugandan individuals and institutions
- Foreign investors (resident and non-resident)
- Anyone with a CDS account at the Bank of Uganda
You don’t need millions. You can start investing with just UGX 100,000.
Taxes on Bonds (Withholding Tax)
Interest earned from bonds is subject to withholding tax:
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Typically 20% for shorter-term bonds (e.g. 2–5 years)
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Often 10% for longer-term bonds (e.g. 10–20 years)
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Tax is deducted before you receive your interest
Can You Sell Your Bond Early?
Yes. The prospectus confirms that bonds are:
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Transferable and negotiable
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Can be sold before maturity via a process called rediscounting
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Can be used as collateral for loans
This means your investment isn’t locked in forever — you have flexibility.
What Happens If You Miss a Payment Deadline?
If you fail to settle after winning an auction bid, you:
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Are considered a defaulter
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May be suspended from future bond auctions
Always make sure your funds are ready before bidding.
Key Terms to Know
| Term | What It Means |
|---|---|
| CDS Account | Your investment account at Bank of Uganda |
| Cut-off Yield | The interest rate all successful bidders receive |
| Coupon | Fixed interest you earn every 6 months |
| Maturity | When your investment is fully returned |
| Competitive Bid | You choose your rate (min UGX 200M) |
| Non-Competitive Bid | You accept the market rate (from UGX 100K) |
How to Start Investing with Level Africa
Level Africa gives you direct access to treasury bonds — no paperwork, no queues.
Steps to get started:
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Create an account on Level Africa
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Complete KYC with your ID or passport
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Go to Treasury Bonds under Products
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Choose bonds listed (including reopened 3Y or 20Y bonds)
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Fund your Level wallet
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Buy bonds — instantly, if marked “Available”
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Track interest and returns from your dashboard
Final Thoughts
Understanding treasury bonds becomes much easier when you see what’s actually in the official prospectus. The rules are clear, the process is structured, and the opportunities are real.
You can start small, earn consistent interest, and build wealth with confidence.
Start Now – Create an Account on Level Africa
Join our community of like minded investors like yourself today Building Wealth With Level Africa.