will be the consequent dutch disease impact. we must be very careful to try and avoid, as much as is possible, rendering our non oil traded goods industries economically unviable, because that would be very detrimental to long term growth and structural transformation. if dutch disease drives up the costs of producing traded goods in uganda, the competitiveness of traded goods industries can only be maintained if these industries can become more efficient, for example by raising the productivity of labour. thirdly, oil prices are inherently volatile. this poses acute problems for the short term management of fiscal policy. in particular the volatility of oil revenues often leads to procyclical public spending which amplifies the business cycle and thus destabilises the macroeconomy. to avoid this, it is necessary to de - link public spending from contemporaneous oil revenue receipts, in a manner which is consistent with long term fiscal sustainability. again, this presents political challenges because of the need to maintain fiscal discipline during periods of above normal oil revenue receipts, when optimal fiscal policy dictates that government budget balances should improve, but when pressures for more public spending will intensify. good public policy decisions are more likely to be taken and implemented if they are a product of well informed public policy debates ; debates which involve public officials, the academic community, the business sector and civil society. i hope that this seminar, which includes participants from the parliament, government, the business sector, academia and civil society, will strengthen our understanding of the critical issues relevant for oil revenue management and will help to promote public debate about these issues. distinguished delegates, i would now like to invite the honorable minister of finance, planning and economic development to officially open this seminar. bis central bankers ’ speeches

microfinance, rural and agricultural finance and setting up of the credit reference bureau have contributed towards improvements in the sector and augur well for future improvements to the sector. i therefore thank the german government for the continued support to uganda in many aspects, but particularly, the support through kfw and giz which is geared towards developing the financial sector in uganda. i wish to highlight the fact that the bank of uganda is cognizant of the challenges in the financial sector and is taking several steps to address them. one such move is our financial inclusion agenda that aims at improving the access and quality of financial services, enhancing consumer protection and creating a larger population that is literate in financial matters and values savings. in order to facilitate the extension of financial services at a greater convenience and cheaper cost to the unbanked population, the bank forwarded to the minister of finance, necessary amendments to the financial institutions act 2004 and the mdi act 2003 to allow agency banking and islamic banking. in order to augment the safety of savings of the predominantly rural clientele, the amendments further include bringing the large tier 4 microfinance institutions that may surpass a set threshold under the regulatory ambit of the bank. we at bank of uganda see the rural challenge fund as another timely and significant initiative that will help cover some of the costs that the financial institutions incur in their endeavor to extend financial services to rural areas. the fund is also expected to motivate the financial institutions to try out new rural focused approaches that they could not undertake single handedly because of the perceived risk. while we welcome this initiative that largely addresses the supply of loanable funds to the rural sector, we must remain mindful of the need to address the issues that constrain rural enterprises like agricultural small holder farmers from accessing formal credit and being profitable. failure of delivery of necessary public goods and services such as quality extension services, market information and rural infrastructure may impede the effectiveness of great innovations like the rural challenge fund. i am personally excited about the rural challenge fund, more so because it compliments government efforts in improving access to credit to transform a predominantly agriculture based - rural sector through among others - the agricultural credit facility ( acf ). i thus encourage eligible financial institutions to take advantage of this great opportunity. thank you very much for listening to me. bis central bankers ’ speeches