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Refinancing government debt securities refers to the rollover of maturing Treasury Bills and bonds through extending the duration of expiring securities, payment of outstanding interest charges, and application of fresh pricing terms for those securities.
In Uganda, reports indicate that the total value of refinanced government securities exceeded half of the entire amount of Treasury Bills and bonds issued in the financial year 2023-24 in a development that promises higher borrowing costs amidst growing fears of debt distress.
Refinancing government debt securities refers to the rollover of maturing Treasury Bills and bonds through extending the duration of expiring securities, payment of outstanding interest charges, and application of fresh pricing terms for those securities.
Latest data published by the Finance Ministry shows government-issued Treasury Bills and bonds valued at Ush15,021.3 billion (USD 4 billion) in the financial year 2023-24 while the total value of refinanced securities was estimated at Ush8, 358.5 billion (USD 2.2 billion) during the same period. The balance of Ush6, 662.8 billion (USD 1.78 billion) was allocated to funding mainstream budget activities.
Treasury bonds worth Ush599.7 billion (USD 160 million) were refinanced in May 2024 compared to Ush893.4 billion (USD 238.5 million) of Treasury Bonds that were refinanced in June 2024, according to the data. A total of Ush1, 576.3 billion (420.9 million) was raised from the domestic debt market in July 2024.
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A sum of Ush1,048.6 billion (USD 279.9 million) was allocated to funding budget expenditure for the first quarter of 2024-25 while the balance of Ush527.7 billion (USD 140.9 million) was devoted to debt refinancing, the data revealed.
