Bank of Uganda Names Primary Dealers for Government Securities

The Bank of Uganda (BoU) has announced the successful applicants for the critical role of Primary Dealer Market Makers (PDMMs) in the government securities market. For the period spanning October 1, 2026, to September 30, 2029, seven commercial banks have been approved to fulfill these responsibilities.

This selection is a crucial step in fostering a robust market for government debt instruments. Primary dealers play a vital role in ensuring the smooth functioning of both the primary and secondary markets for these securities. Their activities are fundamental to how the government finances its operations and also serve as an important indicator of interest rate trends.

A well-developed primary market is recognized globally as a cornerstone for efficient government financing. It lays the groundwork for a liquid secondary market where existing securities can be traded, providing flexibility for investors. Furthermore, the pricing discovered in the primary market often acts as a benchmark for other financial instruments, especially in economies that are still developing their financial infrastructure.

The government, through its central bank, bears the ultimate responsibility for establishing and nurturing an effective primary market. The appointment of PDMMs is a key mechanism to achieve this objective, ensuring that there are dedicated institutions actively participating in the issuance and trading of government debt. The exclusion of one applicant from the eight that applied suggests a rigorous selection process by the Bank of Uganda, focusing on specific criteria to ensure the chosen institutions can effectively meet the market’s demands.