Ugandans to Use Mobile Money to Invest in Gov’t Securities

The Ugandan Cabinet has approved the proposal to use Mobile Money as a platform for investing in Government securities, a move officials said would increase savings and investment amongst Ugandans thus effectively enhancing financial inclusion and economic growth.

Until now, all investors wishing to participate in the treasury bills/bonds transactions had to be registered on the CSD (Central Securities Depository System).

An investor would registers by filling one CSD Account Opening Form which would be delivered to a commercial bank that opens up the CSD account on behalf of BOU.

All bids, competitive and non-competitive, had to be submitted through a commercial bank.

But Cabinet says allowing Ugandans to use their mobile money accounts for this product will enhance distribution capacity of Government securities with the ability to reach out to individual retail investor especially those in rural areas.

Government said in a statement on Tuesday that “widening the scope of investors reduces the dependence on a few players such as commercial banks, offshore players and institutional investors which tend to bid highly in the auctions given that Government has limited choice.”

Cabinet said this product takes on the characteristics of a Collective Investment Scheme, which is not taxed under the Income Tax Act.

“Therefore tax will not be considered when pricing,” the statement reads in part.


To the retail Investor, Cabinet said the product would lead to enhanced savings and investment thus providing the opportunity for local people to save and earn some income.

Additionally, Cabinet hopes it new decision will ease access to Government securities since retail investors will not have to physically deliver bids to their banks (which are sometimes a long distance away).

Understanding the securities 

Government of Uganda borrows funds from the public. BOU is an Agent of Government to collect money (since 1969).

Treasury bills are structured in three maturities, i.e. 91 days, 182 days, and 364 days.

Treasury bills are referred to as short-term instruments (securities). These securities are issued at a discount and currently they account for less than half of total outstanding securities, i.e. government securities that are yet to mature.

Treasury bonds are are new instruments on the market and compared to the Treasury bills. They are long-term securities in maturities of 2, 3, 5, 10 and 15 years.

Cabinet said in a statement that allowing Ugandans to use mobile money to invest in government securities was an “opportunity to enhance private sector credit as Government securities are the highest form of collateral for loans.”

It is also seen as an opportunity for Diaspora investors to save and earn a good return while developing their country.

Bank of Uganda says on its website that the government securities offer a competitive rate of return; are risk-free instruments and very liquid (can easily be sold in the secondary market); encourage saving; and can be pledged as collateral for borrowing

Who can invest in government securities?

  • Commercial banks
  • Insurance companies
  • Individual companies
  • Government agencies
  • Pension funds
  • Individuals (of at least 18 years of age)
  • Offshore investors (individual persons and corporate entities)–through a local agent such as a commercial bank registered and licensed in Uganda.
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