emmanuel tumusiime - mutebile : promoting the primary dealer system in uganda remarks by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the annual primary dealer award ceremony, bank of uganda, kampala, 22 february 2016. * * * distinguished guests chief executive officers of primary dealer banks members of the press ladies and gentlemen good morning. it is my pleasure to welcome you to the 12th annual primary dealer award ceremony. the main purpose of the primary dealer system is to promote the participation in government securities, to foster the development of financial markets, to improve secondary market trading system as well as to ensure efficiency in the market operations of the central bank. primary dealers have contributed to the growth of the securities market by ensuring high demand during primary market auctions. in 2015, the ratio of primary dealer successful bids in the primary auction relative to the rest of the market was 61. 33 percent. while we had some under subscriptions at the beginning of this financial year, the auction bid to cover ratio of treasury bills and bonds for the calendar year 2015 was recorded at an average of 1. 21 ; indicating that demand for government securities remains significant. primary dealers have also continued to enhance liquidity in the secondary market. the total turnover in the secondary market increased in the year 2015 by 12. 5 percent to ugx 3. 6 trillion from ugx 3. 2 trillion in the year 2014. with the continual achievements of the primary dealer system, we note that the system still has some shortcomings that we continue to endeavor to resolve : as observed, the volume of secondary market trading has continued to increase but still falls short of our expectation ; the subscription levels in the primary market are high but we occasionally observe undersubscriptions in some tenors at auctions ; and the spread in pricing at some auctions is significantly wide and out of prevailing quoted market price ranges. the bank of uganda will maintain its consultative approach with the market and other stakeholders to bring on board vibrant and broad based initiatives that will ensure an attractive, efficient and competitive government securities market. at this point, allow me to recognize all the primary dealers present here today. i applaud their contribution towards the development of the government securities market, and, more specifically, the financial markets in uganda. i also wish to acknowledge the role this year ’ s award winner has played especially in their participation in the primary auctions, market making capabilities, consistent pricing as well as

- ordinary meeting of the summit of the eac heads of state decided that east africa should move expeditiously towards establishing a monetary union by 2012. the summit decided that a strategic framework to fast track the establishment of a monetary union should be developed for consideration by the next meetings of the council and summit. as part of the process of implementing these decisions, in october 2007 the economic affairs sub - committee of the mac met in entebbe to develop a strategic framework which can fast track eac monetary union in 2012. the sub - committee discussed the convergence criteria and timeframe ; the model protocol and institutional structure of the eac monetary union ; and harmonization of macroeconomic statistics. fellow governors, our role today is to consider the report of the economic affairs sub - committee report with a view to agreeing on a strategic framework covering the legal, institutional and organizational preparation for the region to achieve monetary union according to the timetable that has been determined by the summit. the first manifestation of a monetary union is a common currency. therefore the strategic framework must include a monetary policy by the five central banks that will serve to ensure that the unified regional currency will be stable in order to foster further economic and financial integration among partner states. while, it is conceivable that not all the partner states may be ready for accession at the same time on account of the failure to fulfil simultaneously all of the macroeconomic convergence criteria, the treaty established unequivocal commitment for all the partner states to join the eac monetary union and therefore, to adopt policies consistent with this aim. it is, therefore, axiomatic that the success of the eac monetary union will depend on the establishment of the eac currency and single monetary policy ; sustainable macroeconomic convergence among the partner states ; and a balanced policy mix between fiscal, monetary and other economic policies. the strategic framework should therefore provide for a mechanism for monitoring and coordinating partner states'economic policies to promote convergence. meaningful monetary and financial integration can be achieved only with a sustainable convergence of economic fundamentals, particularly price stability, and sound fiscal, monetary and structural policies. short of that, fellow governors, ladies and gentlemen, it may even, be counterproductive to try to artificially forge a monetary union. but failure is not on the agenda. our heads of state have decided that we must have a monetary union. our role is to help to deliver it. i cannot emphasize enough the need for sustainable macroeconomic convergence as the bedrock for