In the financial year 2023/24, Uganda saw the total value of refinanced government securities surpass half of the amount of Treasury Bills and bonds issued, indicating potential higher borrowing costs. Refinancing involves extending the duration of expiring securities, paying outstanding interest charges, and applying new pricing terms.
The Finance Ministry data revealed that government-issued Treasury Bills and bonds were valued at Ush15,021.3 billion ($4 billion) while refinanced securities totaled Ush8,358.5 billion ($2.2 billion). A significant portion was allocated to mainstream budget activities, highlighting the country’s debt management challenges.
Refinancing transactions primarily target Treasury Bonds with high-interest rates, impacting market dynamics. While debt servicing costs may rise slightly, refinancing helps manage debt burdens and maintain budget priorities. It allows the government to address urgent funding needs and navigate liquidity challenges.
Overall, the refinancing of government securities reflects Uganda’s evolving economic landscape and the strategic measures being taken to navigate debt distress concerns.
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