emmanuel tumusiime - mutebile : plans for a common platform integrating east african financial markets speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the opening of the stakeholders ’ workshop on developing the 5 - year financial markets development plan, kampala, 15 august 2007. * * * ladies and gentlemen, i would like to thank you for finding time in your busy schedules to participate in this one day ’ s stakeholders workshop. earlier this year the 10th eac meeting of the monetary affairs committee ( mac ) approved a financial markets development framework which includes involving stakeholders in the development of a 5 - year financial markets development plan in all the entire member states of the east african community. the harmonized regional plans are intended to form a common platform for integration of the east african financial markets. the bank of uganda was requested to take the lead and co - ordinate these efforts and the executive director operations chairs the financial markets development committee for the region. the original three east african countries have completed situational analysis for their financial markets in line with agreed parameters and have identified issues to be addressed in the various fields such as banking and capital markets reforms, the pension sector reforms, strategies for financial markets development in the areas of rural finance, leasing and additional financial products which should facilitate improved access to finance. this financial sector development plan represents a new approach to trying to address the current limitations in the ugandan financial markets. the small size of the ugandan financial sector is an obstacle to the development of financial systems, resulting in systems that are in place tending to be limited in scope, more expensive and of poor quality. the ugandan financial market has scope to become larger because the economy is fully liberalized and open to the flow of capital to and from foreign markets, participation of foreign financial intermediaries and now the integration efforts with the east african sister countries. you, as stakeholders, must join hands with the bank of uganda not only to help in the integration process of the east african financial markets but also to do your part in developing deepening and widening the financial markets as a way of accelerating economic development in uganda and the east african region as a whole. there are several challenges that have to be confronted : • as capital flows freely in and out of the country, the challenge that arises is the maintenance of financial markets stability. • increased diversity of financial services and products requires a financially literate consumers who can make informed choices. the consumers ought to

to corrupt public officials and the staff of financial institutions. hence the fight against money laundering is also the fight against corruption. money laundering is also used to support terrorist activities, because these activities require money which must be moved about in a clandestine manner. organised crime often has transnational characteristics, and criminals have no qualms about moving funds across international borders to suit their own ends. criminals seeking to launder money look for weak links in the global financial system. they find jurisdictions with weak or non - existent anti - money laundering legislation attractive, because such jurisdictions allow them to move money about and conceal their illegally acquired wealth without fear of detection. the failure to enact anti - money laundering legislation weakens our country ’ s capacity to combat financial crime, corruption and terrorism. bis central bankers ’ speeches the international community has made the fight against money laundering a priority. the financial action task force on money laundering ( fatf ) – an inter - governmental body – was established in 1989 to set standards and promote the implementation of legislative and other measures to combat money laundering. the fatf works closely with regional bodies, which include the eastern and southern africa anti - money laundering group ( esaamlg ), of which uganda is a member. i regret to say that uganda is now the only one of the 14 members of the eastern and southern africa anti - money laundering group which has yet to pass anti - money laundering legislation. unsurprisingly, this does not impress our friends and colleagues in the region, who perceive uganda as a weak link in the fight against financial crime. if we continue to delay enacting anti - money laundering legislation, uganda will also risk being added to the fatf ’ s list of “ high risk and non cooperative jurisdictions ”, which will undermine international confidence in the integrity of our financial system. this will be very damaging for our economy, as i ’ m sure that you will appreciate. the anti - money laundering bill which is currently before parliament was prepared by uganda ’ s anti - money laundering committee. the legislation is based on the international standards on combating money laundering and the financing of terrorism which are issued by the fatf and are generally referred to as the fatf 40 recommendations. as such the proposed legislation is in line with best practise in the rest of the world. given the transnational nature of money laundering, i don ’ t think that uganda should settle for anything less than the standards which are in force elsewhere in the world. we have