I really pity those Investing in long term govt securities, stick to short term Gov’t treasury bills

I really pity those Investing in long term govt securities, stick to short term Gov’t treasury bills.

By Obedgiu Samuel

It’s against this background that I have been discouraging people from investing in long term Uganda Gov’t securities . Because of this debt refinacing.

Only stick to treasury bills or bonds that don’t exceed 2 years. Anything longer than that is NOT advisable!! Uncertain times.

I predict that within the next 5 years, this government might have to print money to pay those treasury bonds holders who acquired debt in shillings on the public market.

Printing money only helps those who get it first. If your get much later, you will suffer the hidden tax called inflation. The value of your money will be erroded.

So far in this financial year, defence/Classified expenditures have spent sh. 6 trillion

Where was govt getting the money to finance this? Through borrowing on the public market (treasury bonds/bills). This is unsustainable. No wonder, Gov’t is doing so much debt refinacing of public market debt

Bank of Uganda (BoU) absorbed sh389 bn in a 3-day Repo (Repurchase agreement) and will hold a sh500bn 10-year & 20-year treasury bond auction tommorow. Will it be over subscribed? Let’s wait & see

Strike Machine