emmanuel tumusiime - mutebile : global perspectives on sovereign debt restructuring comments by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, kampala, 7 august 2014. * * * i would like to thank mr. otieno for a very insightful and thought provoking paper. as mr. otieno noted, the hipc and mdri debt relief initiatives had brought down external public debt levels substantially by the mid - 2000s in those african countries which had access to debt relief. at that time, the recipients of external debt relief agreed to curtail future external borrowing, especially on non - concessional terms, usually under the auspices of an imf programme. however, as pointed out by mr. otieno, since the mid - 2000s, sovereign borrowing has accelerated, and now includes borrowing on semi concessional and even fully commercial terms. three factors lie behind the increase in external borrowing by african countries. first, many countries have large needs for public investment which cannot be financed without increased borrowing. secondly, in real terms, the economies of ssa were more than twice as large on average in 2013 than they were in 2000, because of annual real growth of gdp averaging 5. 6 over this period. this growth has raised the capacity of african economies to service debts and thus raised the amount of public debt that they can safely contract without risking running into problems of debt sustainability. finally, because of developments within global capital markets, notably the very low interest rates and abundant liquidity, some african countries are now able to access commercial debt at reasonably attractive rates. nevertheless, we should not be complacent about the dangers of too large and rapid a buildup of sovereign debt. it would be unwise to ignore the possibility that african countries will never again have to seek debt relief in the future. as such we need to think very carefully about the modalities through which sovereign debt relief might be applied in circumstances where sovereign debt is very heterogeneous, comprising traditional concessional debt from multilateral financial institutions, semi concessional debt from official bilateral and multilateral lenders, and commercial debt which includes both borrowing from banks and sovereign bond issues. as the recent dispute between the argentine government and vulture funds which had purchased argentine sovereign debt at a discount but now demand repayment in full, has reminded us, the world lacks an effective framework for ensuring that, in cases where governments cannot realistically service their debt in full, their

emmanuel tumusiime - mutebile : fostering a strong financial sector in uganda speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the official launch of finance trust bank ltd., kampala, 17 january 2014. * * * your excellency, the president of the republic of uganda honourable ministers honourable members of parliament the board of directors, finance trust bank the managing director and staff of finance trust bank distinguished guests ladies and gentlemen i am honoured to be here this evening for the launch of finance trust bank. i would like to begin by congratulating the shareholders, the board of directors, the management and staff of finance trust bank who have all worked tirelessly to bring about the conversion of the institution from a tier 3 microfinance deposit - taking institution to a commercial bank. this latest entry to the commercial banking industry in uganda has its origins in the uganda women ’ s finance trust that had been started in 1984 with the objective of providing financial services to low income people in uganda, especially women. it has thus been providing financial services to ugandans for 30 years. in particular, it has provided services to low and medium income segments of the population with a specific focus on women and the youth, offering a wide range of services like savings and loans, bill payments and money transfer services. the history of this institution demonstrates that it is committed to contributing to one of the nation ’ s strategic development priorities ; that of promoting inclusive growth. at the time of becoming a commercial bank in november last year, finance trust had a capital base of ugx 28 billion, it had ugx 43 billion in customer deposits, and ugx 59 billion in loans. the bank has a network of thirty one branches and six automated teller machines across the country. the transformation to a commercial bank will enable finance trust bank to widen its customer base. the bank ’ s capital base has increased and business volumes are expected to follow suit. however, the introduction of new products and the expansion of the bank ’ s portfolio require diligent board and senior management oversight to ensure that the risks which will attend this expansion are managed prudently. your excellency, the bank of uganda is committed to fostering a strong and vibrant financial sector which can contribute to the economic growth of the country while maintaining the safety of depositors ’ funds. the bou is also committed to maintaining macroeconomic stability which is the essential bedrock of a vibrant economy