Mr. Ofwono Opondo.

Cabinet has approved the proposal to trade its securities on mobile money platforms, according to government spokesperson Ofwono Opondo.

Government borrows mainly from the private sector through the issuance of bonds and treasury bills with a promise of repayment upon the security’s maturity date. But this business was being enjoyed mainly by commercial banks and other big corporations like the National Social Security Fund.

In April 2007, bank of Uganda announced that all licensed banks would have direct access to the primary market for government security operations and all banks are free to open up central securities depository (CSD) for their clients. This is BoU’s commitment to make investing in government securities simpler and easier.

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According to BoU, the market is open during working hours in specific banks and every client is free to sell his securities in the secondary market before they mature. Two investors can buy or sell securities with each other in secondary buy connecting their banks for settlement or transfer purposes.

Speaking at media centre on Tuesday, Opondo said the project would increase savings and investment amongst Ugandans and enhance financial inclusion and economic growth.

He said the new approach would further reach out to individual retail investors especially those in rural areas and avail reduced cost of domestic debt. He said widening the scope of investors reduces the dependence on a few players such as commercial banks, offshore players and institutional investors which tend to bid highly in the auctions.

Opondo said to the retail Investor, it will enhance savings and investment and provision of opportunities for local people to save and earn. “Ease of access to government securities, retail investors will not have to physically deliver bids to their banks (which are sometimes a long distance away),” he added.

“This is an opportunity to enhance private sector credit as Government securities are the highest form of collateral for loans. It is also a chance for Diaspora investors to save and earn a good return while developing their country,” he said.