bank of uganda opening remarks by : prof. emmanuel tumusiime - mutebile governor, bank of uganda, at the hosting of the parliament of ghana finance committee members at a benchmarking exercise to bank of uganda, board room, level 7, plot 37 / 45 kampala road, uganda thursday, september 27, 2018 honourable members of parliament, parliament of uganda ; honourable members of parliament, parliament of ghana ; technical staff from both parliaments ; ladies and gentlemen, good morning, i would like to welcome you all to the bank of uganda. it is a privilege to host our brothers and sisters from ghana, a country which holds a special status in africa on account of the pioneering role it has played in many different fields - political, economic and social – and in particular for its pan africanist approach to foreign policy which has been an inspiration throughout the continent. ghana ’ s pioneering role is also of relevance in the field of central banking. the bank of ghana was one of the first central banks in subsaharan africa to introduce an inflation targeting monetary policy framework in the mid 2000s, at a time when virtually all other central banks in the region were either implementing monetary targets or targeting the exchange rate. ghana ’ s experience with inflation targeting was of great value to the bank of uganda and influenced its decision to adopt a similar monetary policy framework in 2011 ; a framework which has proved very successful in controlling inflation. given that our guests are all legislators, i would like to say a few words about the relationship between parliament and the central bank, as this relationship is complex and not always well understood. the 1995 ugandan constitution confers independence on the bank of uganda. specifically the constitution states that : “ in performing its functions, the bank of uganda shall conform to this constitution but shall not be subject to the direction or control of any person or authority. ” what does this mean in practice? in essence it means that the bank of uganda is free to implement its core policy responsibilities, which are monetary policy and bank regulation, without political interference. for example, the government cannot give instructions to the bank of uganda with regard to setting the policy interest rate. there is a very strong economic rationale for central bank independence, because independence gives monetary policy and bank regulation more credibility with the private sector, which in turn improves incentives for the private sector to act in ways which are consistent with low inflation and financial stability. this is why central bank independence has become an important characteristic of modern central banking around

, the citizens grow increasingly dissatisfied with policy - making and become detached from their leaders ’ actions. the gap is then filled by extremism and populism, two evolving diseases of societies today. moreover, despite an immense stock of knowledge that is accessible to an unprecedented number of people, we notice a lack of appetite for this knowledge, most surprisingly among younger generations. therefore, it appears that our real problem is not the lack of knowledge, but the lack of interest for knowledge. 1 / 2 bis central bankers'speeches i have to tell you that the national bank of romania has established 9 years ago its activity of financial education and last year we created a specialized department for this purpose. this conference is organized under the umbrella of our broader project academica, meant to stimulate the contacts between the academic world, our central bank experts and the public. with this triangle of knowledge, we hope to become more and more successful in reaching the hearts and minds of citizens, but also of policymakers and company managers. we have a long way to go in both directions. we still see large groups of population that have insufficient or zero knowledge about the economy and the risks to their economic life. the last survey on financial literacy in romania revealed that only 22 % of the adult population could be considered financially literate. this means that the rest of respondents have problems in understanding the perils of inflation or the risks associated with a bank credit. therefore, it goes without saying that in order to have successful policies, we have not only to integrate more knowledge in our policy design, but also to convince people to integrate more knowledge in their financial decisions. and this is twice as hard to achieve. these facts oblige us to realize that challenging the status quo means in the end challenging mentalities, both those of policymakers and of citizens. it is a very complex process, but we see it as an opportunity as well. we can transform education and awareness in very effective policy tools, to everybody ’ s benefit. we can surpass the objective limits of our policy actions, by making people more aware of these very objective limits. bridging the knowledge gap can lead to more financial inclusion, to more access to finance, which is good news for banks, companies, citizens and public authorities alike. ladies and gentlemen, my conclusion and my message for you, distinguished participants to this conference, and i do not want to sound old fashioned, is that we need research and economic analysis that is practical and can fill