Foreign billions flow into Uganda’s bond market as  as global appetite for risk grows

Uganda, a landlocked country that only recently struggled to secure a World Bank loan, has suddenly become one of the hottest places for global investors looking for high returns. This shift is part of a wider trend where international investors are putting money into riskier markets as confidence in major economies wavers.

Foreign Investors Pour Money into Uganda’s Government Bonds

Analysts say that more than $2 billion worth of Uganda’s government bonds is now held by foreign investors — the highest level ever recorded. This means investors from abroad are buying Uganda’s debt because it offers higher interest compared to safer markets.

Uganda is not alone. Countries like Egypt, Nigeria and Kazakhstan are also attracting investors to their local currency bonds. Experts say this is happening because global markets are currently “flush with cash”, and investors are searching for the last remaining places that offer strong returns.

Uganda’s appeal has risen partly because of the recent changes in its international relations. For nearly two years, the country was frozen out of World Bank funding due to its anti-LGBTQ law, which drew worldwide criticism.

However, in June 2025, the World Bank resumed its support. By the time of the IMF and World Bank meetings in Washington last month, Uganda’s officials told investors that foreigners now held almost $3 billion in Ugandan bonds and stocks combined.

This revival in confidence is helping to strengthen government finances. S&P Global estimates that foreign investors now hold about $2.7 billion of Uganda’s domestic debt — around 12% of all local government debt.

Financial analysts say Uganda is benefiting from a credible central bank, a stable exchange rate, and steady economic management — all of which make it easier for foreign investors to trust the market.

Despite the surge in interest, experts warn that this type of investment — often called “hot money” — can leave as quickly as it arrives. Hedge funds and short-term investors react fast to global shocks. If the U.S. dollar strengthens or global markets weaken, they might pull their money out.

Uganda’s 2025 presidential election, where President Yoweri Museveni is expected to run again, could also make some investors nervous. Human rights groups have previously accused the government of abuses, which could shape investor sentiment.

Banks such as JPMorgan and Bank of America say global conditions have made this year unusually good for frontier markets like Uganda. A weak U.S. dollar, strong global stock markets and steady bond markets have encouraged investors to explore new opportunities.

But analysts also caution that this situation could change quickly. Lower commodity prices, slower global economic growth, or a stronger U.S. dollar could all push investors away from Uganda and similar markets.

For now, Uganda is enjoying a rare moment as a rising destination for international investment — but the road ahead remains unpredictable.