Commercial banks remained the largest holders of Uganda’s government securities by March 2026, even as pension funds, insurance companies, and other investors increased their participation in the domestic debt market.
According to the Ministry of Finance Quarterly Debt Statistical Bulletin and Public Debt Portfolio Analysis, the stock of government securities at face value rose to Shs80.28 trillion by March 2026.
This was up from Shs70.55 trillion in December 2025. The increase of Shs9.730 trillion represented growth of 13.8 percent.
The Ministry attributed the rise to continued issuance of government securities and sustained demand from both banking and non-banking institutional investors.
Banks Maintain Largest Share
Commercial banks held Shs23.181 trillion in government securities by March 2026.
This represented 28.9 percent of the outstanding stock, keeping banks ahead of other investor categories.
However, their share declined slightly from 29.9 percent in December 2025.
“The banking sector continues to play a critical role in the domestic debt market owing to its strong liquidity position and preference for low-risk investment assets,” the Ministry of Finance noted.
Pension and provident funds remained the second-largest investor category.
Their holdings increased from Shs11.456 trillion in December 2025 to Shs13.455 trillion in March 2026.
This raised their share from 16.2 percent to 16.8 percent.
The Ministry said the increase reflects stronger participation by long-term institutional investors. It also supports government’s aim of maintaining a stable investor base.
Insurance companies also raised their holdings during the quarter.
Their investment in government securities increased from Shs4.641 trillion to Shs5.326 trillion.
This kept their share at 6.6 percent of the outstanding stock.
Collective investment schemes and other institutional investors also expanded their role in the domestic debt market.
Offshore Investor Share Declines
Offshore investors remained an important source of demand for longer-dated government securities.
However, their share declined from 11.6 percent in December 2025 to 9.6 percent in March 2026.
The Ministry of Finance partly attributed the decline to stronger participation by domestic investors during the quarter.
Bank of Uganda’s holdings also increased.
The central bank held Shs12.194 trillion in government securities by March 2026, up from Shs9.956 trillion in December 2025.
Its share rose from 14.1 percent to 15.2 percent.
According to the Ministry, the increase was mainly linked to securities held for monetary policy operations and market stabilisation.
The Ministry said growing participation by long-term domestic institutional investors remains important for deepening the domestic debt market.
It also said this trend helps strengthen market resilience.
Domestic Debt Issuance Falls
Despite the increase in the total stock of government securities, domestic debt issuance declined during the quarter.
Government raised Shs6.311 trillion through Treasury Bills and Treasury Bonds.
This was lower than the Shs7.222 trillion raised in the previous quarter.
The decline of Shs911 billion represented a 12 percent drop.
The Ministry attributed the reduction to lower financing requirements during the quarter.
Treasury Bills accounted for Shs1.407 trillion, or 22.3 percent of total domestic debt raised.
This was down from Shs2.104 trillion, or 29.1 percent, in the quarter ended December 2025.
Treasury Bonds Remain Main Borrowing Tool
Treasury Bonds continued to dominate domestic borrowing.
Government raised Shs4.903 trillion through Treasury Bonds during the quarter.
This represented 77.7 percent of total domestic issuances.
However, the amount was slightly lower than the Shs5.117 trillion raised in the previous quarter.
The larger share of bond issuance reflects government’s focus on extending the maturity profile of domestic debt.
It also supports efforts to reduce refinancing risks linked to short-term securities.
Overall, the Ministry said domestic debt issuance remained aligned with government’s medium-term debt management strategy.
The strategy prioritises market development, longer debt maturities, cost-effective financing, and reduced refinancing risk.
