Bank of Uganda
Remarks by
Prof. Emmanuel Tumusiime-Mutebile,
Governor, Bank of Uganda
23rd Ordinary Meeting of the East African Community
Monetary Affairs Committee
Kigali Serena Hotel
30th July 2019
Fellow Governors
The IMF Resident Representative for Uganda
Representatives of the EAC Secretariat
Ladies and gentlemen
Good afternoon,
First, let me take this opportunity to thank Governor, John Rwangombwa;
management; and staff of the National Bank of Rwanda for the warm
hospitality and the excellent organizational arrangements. I am pleased to be
here in Kigali for this 23rd Ordinary Meeting of the East African Community
Monetary Affairs Committee (MAC).
Allow me to give you an overview of the economic prospects back home.
Uganda's economy remains strong, with growth projected at 6.3 percent in FY
2019/20, largely driven by the accommodative monetary policy stance and the
ongoing public infrastructure investments. Inflation over the last 5 years has
averaged 4.4 percent, which is well below the inflation target of the EAC
Macroeconomic convergence criteria. Private sector credit extension grew by
12.6 percent in FY 2018/19 compared to 6.8 percent in FY 2017/18 and
nonperforming loans as a percentage of total loans have declined from a peak of
10.5 percent in December 2016 to about 3.8 percent in March 2019.
Governors, notwithstanding these achievements on the domestic scene, allow
me to underscore the consequences of the fragile international economic
environment for our economies. The medium to long-term prospects for the
global economy remain very uncertain. Just last week, the IMF reduced its
global growth outlook, already the lowest since the financial crisis to 3.2
and suggested that policy "missteps" on trade and Brexit could derail
percent,
a projected rebound. The hazy global economic outlook coupled with the
continuing uncertainty in global financial markets and financial risks may lead
exchange rate volatility with adverse consequences for investment and growth
in our economies.
As we deliberate, we need to be aware that these external vulnerabilities,
emphasize more than ever, the need for the EAC to build resilience by
strengthening policy co-ordination and intra-regional trade, which I am happy
to note, is picking-up.
Governors allow me to reiterate the significant progress made towards the
operationalization of the EAMU Protocol. We have made strides on
harmonization of: monetary policy frameworks, exchange rate policies, rules
and practices governing bank supervision, financial accounting principles,
payment systems and policies and standards on statistics. A number of
national laws are also being harmonised.
However, there have been delays in realising targets set out in the EAMU road
map and that there are several challenges that could further impede the full
implementation of EAMU protocol. It is therefore imperative that we assess
the realism in the timelines embedded in the EAMU road map and do things
right.
BOU's full support to the EAMU process.
Going forward, I want to re-iterate
I fully believe that there are huge pay-offs for our economies if we harmonise
and integrate our monetary, financial and payments systems, even before we
actualize a single currency system for the Community. May we work steadily
towards the realization of the EAMU.
Thank you for your attention.