from the central bank to finance its own budget deficits. central bank financing of budget deficits creates money and thus is a source of inflationary pressure. consequently, the ability of a central bank to achieve its targets for inflation will be undermined if it also has to finance government budget deficits. sound economic governance requires that governments fully fund their borrowing requirements by issuing debt to the markets, and as is often the case for developing countries, by mobilising concessional external finance. this is a second reason for insisting on a clear separation between fiscal and monetary policy. 5. conclusion i have outlined what i believe are the essential elements of an institutional framework for central banking in the post 2015 era. these essential elements are : clear policy mandates for the central bank focused on monetary policy and bank regulation ; a primary monetary policy objective of controlling inflation over the medium term, the operational independence of the central bank and a clear separation of monetary and fiscal policy. over the last two decades, legislative, institutional and policy reforms have been implemented in uganda which have put in place a framework which incorporates these essential elements, although we still have some way to go to make them fully effective. i am confident, therefore, that the bank of uganda is well placed to support uganda ’ s development agenda beyond 2015. thank you for your attention. bis central bankers ’ speeches

goals, the monetary policy too should play a key role. towards that end, the monetary policy framework adopted by the central bank has been made consistent with the government ’ s macroeconomic framework. accordingly, the 2007 targets in the monetary programme of the central bank have been set, after taking into consideration the potential growth and liquidity needs of the economy to move along the projected growth path while keeping inflationary pressures in check. your excellency, in november 2006, the government of your excellency announced its medium - term macroeconomic framework within a 10 - year development framework. this programme targets an 8 per cent growth for the next six years and 9 - 10 per cent thereafter. these are tough targets. but these are achievable. when striving towards such goals, we must remember that our development focus should always be clear. we must also remember that our external environment may not always and necessarily be ideal. but we would do well to remember that ours has been and is a resilient economy. we have shown that we can grow even in the face of highly adverse circumstances and scenarios. in that context, we would be wise, if we do not develop our economic plans on the overriding assumption of a totally terrorism free environment. of course, if the peace process is successful and a early political solution is found to the on - going conflict, it would be highly desirable. but at the same time, if we consciously develop our plans and frameworks on less than perfect conditions, we could still find ways and means to succeed and deliver the planned results. we owe that to our people, who cannot and should not have to wait until everything falls in to place. therefore, our future strategies should be aimed at moving ahead even in the face of threats of terrorism and other adversities without setting out as a pre - condition, the achievement of a permanent peace or ideal conditions to embark on our development projects and programmes. we are also working today on the basis that all our strategies would be of no avail, if we are not sufficiently committed to achieving those plans. we know we are serious in our efforts. we also have to show we are serious. that is why, at the beginning of 2007, in close consultation with the secretary to the ministry of finance, the monetary board developed a comprehensive monitoring mechanism of key macroeconomic variables in the external, fiscal and monetary sectors. these are based on a financial programming framework to ensure that key macroeconomic targets are met as announced