Retirement & Investment Options with a focus on
Government Securities
Presented to Old Boys of St Josephs College Layibi
By Lawrence Olobo – Asst Director Banking
Thursday 10th February 2022
Agenda
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Retirement
Investment Options
Government Securities—What are they?
Operational modalities
Current interest rates
A case for Investing
Concluding remarks
Q&A
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Retirement
Definition: the action or fact of leaving one's job
and ceasing to work.
1.
2.
3.
4.
5.
Each day you draw close to the time of retirement.
No more going to work.
No more office powers.
No more societal influence.
Reduced cash flow.
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Idle Time Planning
1. Take leave from work/office and go home. Don’t
defer your leave.
2. What you do during leave is what you will be
doing when you retire.
3. If all you do is to sleep or watch TV, then that’s
what you are likely to do in your retirement.
4. If you are farmer then start now during your
leave. Do it now boss!!!
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Idle Time Planning
5. Learn something during your leave. It will help
you when you retire.
6. Don’t spend it sleeping, Gossiping, watching TV,
Drinking!!! Even your weekends.
7. You will thank yourself for spending your time
productively.
8. Start a hobby early in your working days to take
you along when you retire like rearing chicken,
goats, vegetable growing, lecturing etc
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Investments
Defn:
Investment is the dedication of an asset to
attain an increase in value over a period of
time. Investment requires a sacrifice of
some present asset, such as time, money, or
effort.
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Investment Options
1. Fixed Asset (Land, Building, Rentals)
2. Moveable Assets (Graders/Road Construction
Equipment's, M/Vehicles, Tipper Lorries,
Taxis, Boda Bodas etc)
3. Farming (Cows, Goats, Crop Production)
4. Human beings (Children & relatives)
5. Financial Assets (Tbills, Tbonds, Shares/Stock,
Unit Trust Funds etc)
Can you easily convert it into cash when needed?
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Investment Options
1. Have property which can be rented or
converted into cash
2. Have shares that pay good dividends.
3. Plant cash trees and Grow vegetables etc. .
4. Rear goats, pigs and chicken
5. Don't retire and start to rent a house or
refuse to vacate a house at workplace.
6. Don’t plan to inherit your wife's asset
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Why the fuss?
Many retirees die early because of:
1. Not being mentally prepared to retire.
2. Lack of finances
They Lapse into Depression
They develop Hypertension/ Diabetes because
of worries, anxiety and uncertainty and financial
pressures.
So what???
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Government Securities:
What Are they?
 Government of Uganda borrows funds from the public.
 BOU Agent of Government to collect money (since 1969)
 The public/lenders place funds with government through
their CSD accounts opened at BOU.
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Government Securities:
What are they? …contd
Treasury Bills (T-Bills)
• Place funds on your CSD account for short term,
not more than 1 year i.e.
Treasury Bonds (T-Bonds)
• Long term investments:
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Operational modalities
Account opening Procedures
Account Opening at BOU is done through any commercial bank in Uganda
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Operational modalities
How to Invest
Primary Market/ Auctions
• Investing follows a Calendar (on the BoU Website)
– T-Bills , every 2 weeks (14 days)
– T-Bonds, every month (28 days )
• Public invitation to tender is sent to the Press
• Investors complete CSD Form 2 to place orders/bids
Secondary Market
• Invest or dis-invest (buy/sale) any working day
through any bank through secondary market
– ALL orders (primary or secondary market) submitted
through one of the local commercial banks
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How to Invest, Cont’d
• Minimum bid (investable) amount is UGX100,000
• Auction bids between UGX100, 000 and
UGX200,000,000 succeed automatically (Non
Competitive or price-takers).
• Auction bids above UGX200 million have to
compete (Competitive bids); these bids/investors
determine the interest rates (price-makers)
• Secondary market doesn’t have competitive, noncompetitive; investor agrees price & amount with
their bankers (to sell or buy)
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Operational modalities
Who can invest?
• Ds
INDIVIDUALS
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How much do I earn
• Treasury Bond (Depends on Tenure) approx 10% to
15%
• T Bill (depends on maturity) approx 8.952%
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Case for Investing
• Diversification benefits: investor’s overall portfolio
risk is reduced significantly (“Never put all your eggs
in one basket”)
• Assured regular flow of income (fixed cash flows
from interest payments)
• Very good competitive market-determined interest
rates
[even after factoring out withholding tax on
interest: 20% on investments of less than 10year tenure; 10% for bonds of 10-year and
longer tenure]
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Case for Investing…contd
• Easy saving and investment mechanism(UGX100K!)
• Can be used as COLLATERAL for borrowing
(liquidity management)
• Can be liquidated any time at competitive rates in
the secondary market; bills and bonds are as liquid
as cash!
[Exciting Fact? Government has never
defaulted since inception of
government
securities in
1969; means there is
minimal credit
risk]
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Concluding remarks
For individual / household investor……
• Uganda Government Securities provide an
opportunity for Ugandans to invest in safe credit
risk-free assets.
• Given the need to increase the saving culture in
this nation, these liquid securities provide both a
saving as well as investment opportunity for
many to change livelihoods in a slow but sure
way.
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Thank you for listening
Q&A
olobolawrence@gmail.com +256752880277
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