already noted, that is usually not the case after banking crises. and the maintenance of such a large deficit for any length of time runs the risk of the cost of debt finance rising sharply, as we have seen in the countries of the euro - area periphery. but the necessary fiscal consolidation that is now under way is likely to weigh on domestic demand in the coming years. moreover, a worsening of the sovereign debt problems in the euro - area periphery could also hold back the recovery here, particularly through its impact on the banking systems here and abroad. finally, household and business spending, both of which fell sharply in the recession, remain depressed. in part, that reflects subdued growth in households ’ real incomes since the onset of the crisis. but in addition, it takes time for confidence and spending to recover after such a shock. some households need to maintain higher savings in order to repay debts taken on before the crisis. and businesses are unlikely to want to expand while capacity is lying idle and there is still much uncertainty about the outlook for demand. but the substantial depreciation of sterling – down nearly 25 % since the start of the crisis – should, over time, help to boost the contribution of net exports to uk growth. we have seen some of the fruits of that in the robust performance of manufacturing over the past year. as i already noted, the economy began to grow again more than a year ago, in the fourth quarter of 2009. and over the first year of the recovery, growth was around the uk ’ s historical average rate. in part, that was on the back of the boost to growth from a slowing in the rate of inventory de - stocking. given the prospective fiscal consolidation, the maintenance of such growth rates requires a pickup in the contribution of private domestic final demand and in net exports. in our november inflation report, our central view 3, predicated on market interest rates, was for the recovery to be maintained, with the boost from a stimulatory monetary stance and from the past depreciation of sterling offsetting the continuing headwinds from de - leveraging and fiscal consolidation. since the november report, we have, of course, had the first estimates from the ons of growth in the final quarter of last year. they suggest that the economy contracted by 0. 6 %. in part, that was down to the disruption caused by the snow. but even abstracting from the snow, activity seems to be have been broadly flat. how much

bank of uganda remarks by prof. emmanuel tumusiime - mutebile, governor, bank of uganda at the breakfast organised by the institute of corporate governance uganda theme : “ governance as a core pillar for economic development ” at sheraton hotel. november 25, 2016 institute of corporate governance of uganda : corporate governance breakfast with the theme “ governance as a core pillar for economic development ” president, institute of corporate governance uganda ( icgu ) the executive of the icgu governing council our host, pwc ladies and gentlemen, good morning i would like to begin by thanking the institute of corporate governance of uganda for inviting the governor to give a key note speech at this breakfast and to commend the institute for the excellent work that it is doing to promote good corporate governance in uganda. the theme of this breakfast is corporate governance as a core pillar for economic development. the link between corporate governance and economic development is probably not intuitively obvious so i will offer you my own perspective on how corporate governance can contribute to development. a key driving force of sustainable development is the harnessing of positive externalities to private sector activities and the minimising of negative externalities. positive externalities occur when social rates of return to investment exceed the purely private rates of return. examples of positive externalities include the spillovers of benefits which occur when firms train workers, invest in research and development and adopt new technologies which generate “ learning by doing ’ benefits. examples of negative externalities include pollution or collusive or abusive manipulation of markets. given that investable resources are scarce, long term development requires that social rates of return are high. hence rapid economic development is more likely to be realised in a society which can enable the private sector to generate high private rates of return to investment while at the same time yielding positive externalities so that social rates of return are even higher. conversely, economic development will be held back if private sector activities create negative externalities, thus depressing social rates of return to investment. why should corporate governance have any impact on positive or negative externalities of private investment? in any firm there is an inherent tension and potential conflict of interest between what are often termed the “ insiders ” of firms – dominant shareholders and senior managers – and the “ outsiders ” who include small shareholders, the creditors of the firm, its employees and customers and the general public. the insiders are those who have actual control over the form, but without effective restraints insiders may abuse their control over the firm