bank of uganda remarks by louis kasekende ( phd. ), deputy governor of the bank of uganda launch of the 10 - year capital markets development master plan kampala, serena hotel thursday june 15, 2017 the chief guest, h. e the president of the republic of uganda, the hon. minister of finance, planning and economic development, cabinet and state ministers, hon. members of parliament, the chairman, cma board, chairman, the capital markets masterplan steering committee, distinguished guests, ladies and gentlemen, good morning. i am delighted to be here this morning to participate in the launch of the capital markets development master plan. i am speaking on behalf of the governor of the bank of uganda, prof. emmanuel tumusiime - mutebile, who is unable to be here due to personal reasons. i would also like to point out that the governor is the chairman of the financial markets development committee ( fmdc ). this committee was set up to steer the development of the financial sector and to ensure that the sector maximizes its contribution to the economy. the fmdc coordinates reforms across the banking, capital markets, insurance and pensions sectors. the premise behind the creation of the fmdc in 2008 was the recognition of the vital and varied roles which the financial system must perform to support economic development. in essence, the financial system must mobilize savings from households and corporations, and allocate those savings to a variety of economic agents which can put them to productive use. in addition, the financial system must also provide other financial services which are needed in a modern economy, such as payments and insurance services. savings are a scarce resource in a developing economy like ours ; hence it is essential that the process of allocating these savings – sometimes referred to as intermediation – is very efficient. as demands for investable funds far outstrip their supply, the task of the financial sector is to ensure that these scarce resources are allocated only to those firms and households which are best able to use them productively and, in doing so, to generate income for the savers who have provided the funds ; for example in the form of interest or dividends. for practical reasons, a market based financial system, driven by the profit motive, is much more likely to generate efficient allocations of scarce financial resources than a system characterized by state controls, although that does not obviate the need for appropriate prudential regulation, by institutions such as the bank of uganda and

' speeches also, we collaborated with the uganda bankers'association ( uba ) to develop and establish the industry esg framework for the banking sector, including an esg reporting template and indicators we are launching today. you may recall that in october 2022, we conducted a survey to understand the financial sector's approach to esg sustainability. while a strong interest was evident - with nearly all institutions responding - a lack of consistency emerged. esg's meaning varied, with a focus primarily on inclusivity and environmental issues. this highlighted the need for clear direction. to achieve measurable progress and assess the industry's impact, a unified approach with policy guidance and capacity building is crucial. the industry esg framework directly addresses this need. it promotes a holistic and harmonized approach, ensuring measurable benefits for the sector and, ultimately, economic transformation. this framework signifies our commitment to embedding esg principles within the financial sector, driving positive change. the framework will guide our sfis in embedding esg principles into their governance structures, risk management processes, product offerings, and reporting practices. it will foster transparency, accountability, and a shared understanding of our sustainability commitments. the framework offers a unified approach for esg integration across the banking sector. however, individual institutions seeking international sustainability certification are strongly encouraged to do so. this pursuit strengthens sustainability efforts and enhances the resilience of sfis. as you are aware, this esg framework we are launching today is a culmination of extensive consultations and benchmarking against international standards and best practices. it has been contextualized to the ugandan environment, laying a strong foundation for achieving the sustainability goals of the banking sector. as we forge ahead on this transformative journey, successful implementation of the esg framework requires our collective commitment and collaboration. it is imperative that we : develop an esg taxonomy : establish a credible and transparent common language defining sustainability in our sector, addressing the risk of greenwashing. continuously review the esg framework : ensure its relevance and alignment with the dynamic operating environment. standardize esg reporting : create a reporting framework that sets clear requirements for institutions based on esg maturity, aiming for standardization across all banks. with the support of our partners, including abi finance, in developing comprehensive curricula and the uganda institute of banking and financial services ( uibfs ) in training, we can gain the momentum needed for successful implementation. 2 / 3 bis