bank of uganda remarks by louis kasekende ( phd ) deputy governor, bank of uganda at the 2017 financial reporting ( fire ) awards kampala serena hotel ; november 09, 2017 ceo of capital markets authority, president of the institute of public accountants of uganda all captains of industry, and sponsors of the fire awards, ladies and gentlemen good evening! i would like to begin by thanking the ceo of the institute of certified public accountants in uganda for inviting me to be chief guest at this wards dinner and to commend the institute and the other organisers and sponsors – the capital markets authority, the uganda securities exchange and the new vision – for this very commendable initiative. i hope it will lead to a greater understanding among the business community in uganda of the benefits which firms can derive by preparing financial accounts that comply with best practise and global reporting standards. i want to reflect in these remarks on the contribution which financial reporting makes to a developing economy and in particular the growth of a modern business sector. the business sector in uganda is dominated by small and medium scale enterprises ( smes ) ; the most recent comprehensive data which are available from the census of business establishments indicates that the average number of employees of a registered business is only 2. 3. as is the case elsewhere in africa, smes in uganda struggle to expand. the vast majority of them never expand enough to become large firms. of the approximately 460, 000 registered businesses in uganda, less than 1, 000 have more than 50 employees. one of the reasons why smes struggle to expand is the nature of these firms. the majority are owned by a single proprietor or by a group of related family members. the proprietor of the firm is often the manager. the governance of these firms, including financial governance, tends to be informal, without transparent rules, records and procedures. this type of informal governance may be adequate for small companies but it is a major barrier to their growth and expansion. firms cannot expand without mobilising capital for investment. beyond a relatively small size, the investment needs of a firm outstrip the financial resources of a sole proprietor or a single family. hence finance must be mobilised from outside sources ; i. e. from outside of the firm ’ s immediate ownership. from a business perspective, the ideal form of finance for firm expansion is equity capital, because this is long term finance and its returns are linked to the performance of the firm. equity capital from outside sources can be mobilised through private

2018 which has been circulated to the various stakeholders, many of whom have submitted their comments. it is therefore a good opportunity for us to go through the draft bill, to clarify on the comments received and to receive additional inputs from the stakeholders. we hope that the draft bill will be submitted to the minister this month ( october 2018 ). in addition, in february 2018 cabinet approved amendments to the bou act ; to empower bank of uganda to regulate and oversee the payment systems. the draft bank of uganda amendment bill is being reviewed by a select technical team. the passing of the two ( 2 ) draft bills will greatly enhance the bou supervisory oversight on the national payment systems. while most of the payment systems in uganda are provided by the central bank, the market has recently experienced an upsurge of systems operated by the private sector with powers to control access and set prices. examples of systems operated by private providers include : points of sale ( pos ) for debit and credit cards, automated teller machines ( atms ), the switch and mobile payment systems. the mobile money services have especially experienced an exponential growth. at the regional level, the east african payments system ( eaps ) has been implemented to facilitate cross - border payments within the east african community ( eac ) region. under the common market for east and southern africa ( comesa ), the regional payments and settlement system ( repss ) has also been implemented to facilitate regional payments. although the legal issues were partly addressed by the above mentioned measures implemented by the central bank, a comprehensive nps law to provide an oversight framework for payment services providers, operators and instruments is urgently required. the payment systems are a vital part of the economic and financial infrastructure. the law is therefore intended to provide an overall framework for ensuring safety and efficiency of the payment systems. the nps law will provide for the licensing, regulation, and oversight of payment systems by specifying : the licensing criteria and procedure. the regulatory power of the bou concerning the imposition of norms and standards, rules and regulations on operators of payment systems, and the bou ’ s power to call for information, to conduct on - site examinations, and take enforcement actions. the administrative sanctions in case of violations of the law, regulations or orders from the central bank. we believe that your contributions will help in the finalisation of this long awaited bill. specifically, i would like to thank the following ministries and government institutions for the efforts put in the drafting process ;