Emmanuel Tumusiime-Mutebile: Plans for a common platform
integrating East African financial markets
Speech by Mr Emmanuel Tumusiime-Mutebile, Governor of the Bank of Uganda, at the
opening of the stakeholders' workshop on developing the 5-year Financial Markets
Development Plan, Kampala, 15 August 2007.
* * *
Ladies and Gentlemen, I would like to thank you for finding time in your busy schedules to
participate in this one day's stakeholders workshop.
Earlier this year the 10th EAC meeting of the Monetary Affairs Committee (MAC) approved a
Financial Markets Development framework which includes involving stakeholders in the
development of a 5-year Financial Markets Development Plan in all the entire member states
of the East African Community. The harmonized regional plans are intended to form a
common platform for integration of the East African Financial Markets. The Bank of Uganda
was requested to take the lead and co-ordinate these efforts and the Executive Director
Operations chairs the Financial Markets Development Committee for the region.
The original three East African countries have completed situational analysis for their
financial markets in line with agreed parameters and have identified issues to be addressed
in the various fields such as banking and capital markets reforms, the pension sector
reforms, strategies for financial markets development in the areas of rural finance, leasing
and additional financial products which should facilitate improved access to finance.
This financial sector development plan represents a new approach to trying to address the
current limitations in the Ugandan financial markets. The small size of the Ugandan financial
sector is an obstacle to the development of financial systems, resulting in systems that are in
place tending to be limited in scope, more expensive and of poor quality. The Ugandan
financial market has scope to become larger because the economy is fully liberalized and
open to the flow of capital to and from foreign markets, participation of foreign financial
intermediaries and now the integration efforts with the East African sister countries.
You, as stakeholders, must join hands with the Bank of Uganda not only to help in the
integration process of the East African financial markets but also to do your part in
developing deepening and widening the financial markets as a way of accelerating economic
development in Uganda and the East African region as a whole.
There are several challenges that have to be confronted:
•
As capital flows freely in and out of the country, the challenge that arises is the
maintenance of financial markets stability.
•
Increased diversity of financial services and products requires a financially literate
consumers who can make informed choices. The consumers ought to be equipped
with the proper information to make informed choices and with proper regulatory and
legal tools to guide operations and provide redress in case of disputes.
•
The Bank of Uganda exercises transparency in its conduct of monetary policy in
order to promote investor confidence in the economy. Indeed, this has resulted in
investors developing confidence in the economy as evidenced by the recent surge in
inflows from offshore investors as well as a surge in remittances from Ugandans in
the Diaspora. However, some instability was experienced recently in the forex
market, which tended to disrupt the conduct of monetary policy. I would like to
assure you that the Bank of Uganda will continue to pursue its objectives of price
stability and financial sector soundness rigorously in a transparent manner but will
deal firmly with destabilizing speculative tendencies that could derail the
achievements already made in the Ugandan economy. This will be done with due
regard to internationally accepted sound practices.
We have, therefore, invited you the stakeholders to provide your input in the 5-year strategic
financial markets development plan for Uganda, which involves a step by step plan for
implementing the suggested reforms to remove the impediments that have constrained the
development of the financial markets. This effort is part of and in line with Bank of Uganda's
continuous dialogue with financial sector stakeholders. Similar activities are going on in all
the other member countries of the East African community.
I wish you all fruitful deliberations and I declare this workshop open.