emmanuel tumusiime - mutebile : the way ahead for central banking in east africa speech by mr emmanuel tumusiime - mutebile, governor of bank of uganda, at the opening of the 16th east african central banking course, entebbe, 3 july 2006. * * * ladies and gentlemen, on behalf of bank of uganda which is hosting the course and also on behalf of my fellow governors in the east african central banks under whose authority the course is held, i wish to welcome you all to uganda. i hope you had a comfortable journey to the pearl of africa. the east african central banking course that you are about to embark on has a long history. the first one was held in 1970 at makerere university following a decision in 1968 by the governors of the three central banks to introduce a joint training course to be held bi - annual and hosted on a rotational basis by the three central banks. they took that decision because, among other reasons, they wanted to create a forum for middle managers to interact, exchange ideas, enable them to gain more understanding of central banking particularly monetary and fiscal policies and prepare them for higher responsibilities. i am happy that the programme has been running on schedule since then save for the temporary suspension between 1978 and 1982 following the collapse of the east african community. it was, however, resumed in 1984. though the rationale for the central banking course is as noble today as it was at its inception, the concerns are more critical now than they were then. i believe that as central bankers, you are aware that in a world that is increasingly becoming more dynamic, complex and uncertain, countries that continue to operate individually will certainly be faced with more serious challenges than those that operate in regional economic groupings. a case in point are the challenges of globalisation and economic liberalisation facilitated by information communication technology. the gravity of this matter can best be appreciated if we assess the global economic panorama. it should be instructive to us to note that if developed countries in europe have seen it fit to operate in union, developing countries like ours have no option but to do likewise. under the treaty of the east african community, signed on 30 november 1999, the presidents of the east african countries undertook to fast track the establishment of a customs union, which will be followed by a common market, a monetary union and, ultimately, a political federation. progress towards these arrangements requires close co - ordination in the process of evolving the required institutional and policy frameworks

to detail the specific functions including the supervision and regulation of financial institutions. one of our major pre - occupations as a central bank is to control inflation, i. e. maintaining the value of the uganda shilling by keeping at a minimum, the changes in overall prices of goods and services. moderate changes in prices are supposed to enable households and businesses to save and plan long term, without fear of significant erosion of their monetary value. i wish not to discuss monetary policy today, as i believe it is one aspect of our mandate where we may have 1 / 3 bis central bankers'speeches consensus with most stakeholders to the effect that the bank of uganda has performed very well especially since the mid - 1990s, compared to what the economy experienced in the 1980s and 1970s. second ; let me speak briefly about our mandate with respect to the supervision and regulation of financial institutions. it is critical to note that not every financial institution falls under the regulatory purview of the bank of uganda. bank of uganda currently oversees deposit taking institutions that fall under three categories ; commercial banks, credit institutions such as postbank uganda limited, opportunity bank and brac uganda limited ; and the micro - deposit taking institutions like pride microfinance, finca and ugafode microfinance. bank of uganda also oversees the foreign exchange bureaus and licenses any entity wishing to engage in money remittance services. at the moment, the bank of uganda also oversees the mobile money services jointly with uganda communications commission. however, this is bound to change with the enactment of the national payments systems law that is in the offing that will have bank of uganda taking sole responsibility for regulation and supervision of the mobile financial services. money lenders and other microfinance institutions are therefore not the responsibility of the bank of uganda. non - deposit taking microfinance institutions and entities like saccos are regulated by other agencies such as uganda microfinance regulatory authority. with respect to saccos, i want to urge the members to reflect on the unutilised potential of these groupings in fostering job creation and wealth for our community. often, the saccos are only used by members as some form of safe custody or saving to spend on later festivities and sharing out the proceeds of any interest earnings. such operational modalities often result in returns that are so small to undertake any meaningful investment by an individual member. i wish therefore to request members to consider transiting saccos into producer cooperatives by utilising the pooled