Uganda’s Path to Infrastructure Bond Implementation: Lessons from Kenya

Uganda’s Path to Infrastructure Bond Implementation: Lessons from Kenya

The analysis reveals that infrastructure bonds generally outperform treasury bonds, demonstrating lower risk (0.03%) and returns (0.09%) compared to treasury bonds’ higher risk (0.23%) and returns (5.02%). For optimal implementation in Uganda, the study recommends asynchronized bond issuance, with infrastructure bonds having longer tenors to complement rather than compete with treasury bonds.

Key success factors identified include sound macroeconomic management, industrial expertise in project bonds, robust legal frameworks, and strong investor confidence. The research emphasizes that Uganda’s Ministry of Finance, Planning, and Economic Development should carefully evaluate financing portfolios to achieve an optimal balance between risk and return. Infrastructure bonds represent a viable financing alternative, particularly effective in attracting private investment while maintaining sustainable debt levels. These findings provide crucial guidance for Uganda’s potential adoption of infrastructure bonds as a financing mechanism, emphasizing the importance of sustainable debt management and efficient portfolio selection.

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• Published Mar 19, 2025