new risk - based capital ratios and more - extensive information about credit quality of their portfolios and their risk measurement and management practices. other disclosures include : corporate structure, market risk disclosures for standardized and internal models approaches, disclosure for operational risk measurement, interest rate risk and foreign exchange risk. such disclosures are expected to encourage banks to be more transparent to financial markets which should then promote market discipline. uganda ’ s preparedness the key element that countries should consider before moving on to basel ii is whether a good baseline supervisory system is in place. that is, whether the basel committee ’ s basic core principles, including its preconditions – have been complied with. for uganda, the answer to this is in the affirmative. yes, we have a good baseline supervisory system in place. the major milestone that enabled uganda to move towards full compliance with the basel core principles was the enactment of the new financial institutions act ( fia, 2004 ). in addition bank of uganda fully shifted to the risk based supervision approach since january 2003. the fia, 2004 allows bou to prescribe higher on - going capital requirements for a specific financial institution if the supervisory review process reveals existing risks that warrant such increases which is in line with pillar 2. the fia, 2004 also outlines some disclosures including a prescription for the form and content of the annual accounts which provides a good ground for pillar 3 under the new capital accord. many aspects and possible effects of basel ii have been debated at various levels, including its potential effects on banks ’ costs and on the competitive positions. such costs include : revamping the it systems and or acquisition of new systems, training costs for staff and additional staffing needs, insufficient historical data, time consuming transitions, internal models and risk quantification costs and disclosure overload. as to whether these associated costs will be transferred to the beneficiaries of financial services remains a subject for research and discussion within the sector. thank you!

this requires increased domestic savings rates. because private savings rates are very difficult to influence in the short term through public policy, the burden of raising domestic savings rates will initially fall on the public sector. public savings must rise which means that public consumption, and especially spending on public administration, which is not usually very productive, must be curtailed. intra - regional trade to achieve sustained export growth over the long term, african exporters will have to diversify away from the slow growing traditional export markets in advanced economies. regional trade offers promising prospects for diversification. although africa ’ s intra - regional exports have expanded more than four - fold since the turn of the century, they still comprise only 9. 6 percent of the continent ’ s total exports, which is much lower than the corresponding share in other developing regions such as latin america ; hence there should be considerable scope for expanding intra - regional trade over the long term. regional economic integration is a goal of many countries in africa, including those in east africa which have established the east african community ( eac ) and a broader group of countries which are members of the common market for eastern and southern africa ( comesa ). the eac has implemented a customs union, removing tariffs on intra - eac trade and imposing a common external tariff. however, non tariff barriers ( ntbs ) to intra - regional trade remain pervasive in the region, some of which have been retained for protectionist reasons, despite the fact that the removal of all ntbs that are applied in a manner which restricts trade is an objective of the eac customs union protocol. ntbs include restrictions pertaining to the “ rules of origin ” of imports, sanitary and phyto - sanitary measures and technical barriers to trade involving the application of product standards and regulations in a discretionary manner. a forthcoming world bank report, which examines how to harness the potential of regional trade and integration, found that uganda and kenya impose significantly more ntbs on their imports than many other ssa countries. 2 ntbs are a particularly serious obstacle to the expansion of food exports within africa, with the consequence that agricultural development is stymied and the continent is becoming ever more dependent on food imports from outside africa. hence the removal of ntbs should be a priority for african governments. agricultural development and food trade africa ’ s trade balance in agricultural products has deteriorated alarmingly over the last three decades. in the 1980s, africa had a small trade surplus with the rest of the world in agricultural