funds as capital for investments in commercial agro - based enterprises. such a move coupled with proper record keeping can also facilitate easier access by members to government funds like the agricultural credit facility ( acf ). having set out the range of institutions supervised by the central bank ; i want to echo the benefits that the public accrues from dealing with only regulated financial institutions. regulated institutions are best placed to ensure safety of people ’ s savings because they are demanded to act diligently in accordance with the set laws and regulations ; offer a recourse to the regulator for consumer protection in case of complaints or irregular activity, and in the event of having to be closed and liquidated, there is a final recourse to the deposit protection fund for depositors in these regulated financial institutions. as such, the public should not be duped into dealing with unlicensed and unregulated financial institutions that are in many ways disguised schemes to defraud the community. members of the public should heed warnings or advice coming from agencies like bank of uganda regarding operations of certain investment schemes or institutions. in addition, the public should also take keen interest in physically inspecting the licenses of any institution that claims to be licensed by the bank of uganda or any other regulator. the licenses are supposed to be displayed in all the branches of these regulated institutions and whenever a customer is in doubt ; they should inquire from the regulators. the security agencies and other arms of government should also take a firm stand to wipe out the ponzi schemes and other unregulated financial institutions. otherwise, if we leave unregulated financial institutions to operate leading to public loss of funds, it could damage confidence in the entire financial system with dire consequences for the economy. third, permit me to speak briefly about the recent parliamentary proceedings related to our execution of the bank supervision and regulatory role. one issue that featured quite extensively in the discussions with cosase and in the media related to the speed of resolution of some of the financial institutions and the recommendations by some sections of the public to introduce strict 2 / 3 bis central bankers'speeches procedural guidelines with fixed timelines for the bank of uganda. i wish to draw your attention to a regulator ’ s perspective on that issue. the bank of uganda only intervenes in a financial institution when it has reasonable belief and evidence that continued operations of that institution pose serious risk of loss to depositors ’ funds. moreover, the dire condition of any institution that is the

##es which can then be used as raw materials in agroprocessing industries ; ii ) to free up labour for employment in modern industries, and iii ) to create a rural market for the products of domestic industry. uganda formulated the plan for the modernisation of agriculture in the 1990s but this has not been implemented effectively with dire consequences for the performance of the agricultural sector. labour productivity in ugandan agriculture is among the lowest in the world. most of the smallholder food crop sector is characterized by subsistence farming, with no use of modern inputs. the strategic objective of agricultural policy should be to help uganda ’ s smallholders to adopt good agricultural practices, produce more output for the market and to start to use modern farm inputs. the first step towards agricultural modernization is an effective agricultural extension service which can reach the mass of smallholder farmers and encourage them, through technical advice and demonstrations, to adopt good agricultural practices. the returns to investing in modernizing smallholder agriculture are potentially huge. the combination of adopting good agricultural practices and low input technology could enable smallholders to double their yields, which would raise farm incomes and bis central bankers ’ speeches generate marketable surpluses. it is a mistake to believe that ugandan agriculture can be modernized by focusing on large scale commercial farms, rather than smallholders. given the structure of agriculture in uganda, which is dominated by smallholders, large scale farms are never likely to account for more than a small share of farm output. furthermore, yield per area of land in ugandan agriculture is inversely related to farm size ; hence replacing smallholder agriculture with large scale farms is likely to reduce total farm output. 3. accelerate the demographic transition the demographic transition plays a key role in economic development. no developing country has achieved middle income status and structural transformation of the economy without undergoing a demographic transition. a demographic transition entails a fall in the total fertility rate, which reduces the population growth rate and the pulls down the agedependency rate. uganda has only just begun its demographic transition. it has a total fertility rate of 6. 1 children per woman and so has one of the highest age - dependency rates in the world, at over 100 dependents per people of working age. many of the fast growing economies of developing asia have age - dependency rates of around 50, because they began their demographic transitions several decades ago. lower age - dependency rates are closely correlated with higher savings rates and greater real spending per person on human capital development, which is crucial for structural