Avoid Selling Land for a Shs20m Cash Crunch: Opt for Treasury Bonds

Ugandans typically build wealth through land, rental properties, and basic savings, viewing them as secure assets. However, urgent needs such as medical bills, school fees, or opportunities demand fast cash, like Shs20 million, revealing a major flaw: land can’t be sold in parts.

Yunus Mugula, chief treasury and markets officer at Pearl Bank, warns against disrupting portfolios by selling an entire Shs200 million plot for a fraction of its value. Transactions involve high fees up to 10%, lengthy processes with valuations and transfers, often taking months.

Government treasury bonds solve this liquidity issue. Traded in Shs100,000 units on the secondary market, investors can sell exactly what’s needed—say 20 units for Shs2 million—without affecting the rest. Deals settle quickly with minimal costs.

These bonds yield 16% after tax, paying fixed coupons every six months on schedule, providing cash flow certainty unlike unpredictable rentals or idle land. Capital returns in under seven years while earning income.

Bonds also serve as easy loan collateral: banks verify via the Central Securities Depository, with a simple lien on needed units only. Remaining bonds keep paying coupons.

Getting started is straightforward—a CSD account via any commercial bank requires minimal documents like an ID copy. Minimum investment is Shs100,000. Mugula advises testing with a small amount to experience the first coupon, and consulting professionals for personalized advice.

Land remains a strong long-term hold, but pairing it with bonds ensures balance: appreciation plus liquidity and returns for emergencies.

Source: Daily Monitor (Uganda)