Uganda operates a liberal market economy with many formal and informal financial players. The banking sector remains oligopolistic with high interest rates between 20-27%. Civil society's role is undefined but emerging. Banks are largely funded by customer deposits at 80.6% and profits grew 17.2% in 2014. Civil society can play an important role by monitoring financial institutions, integrating citizen concerns into fiscal policy, conducting research, and advocating for more inclusive fiscal policies that benefit citizens. Uganda has a developing financial system and civil society has an opportunity to help citizens engage more fully.

1. Governance & Fiscal Institutions in
Uganda; The Role of Civil Society
By: Sam Stewart Mutabazi
Executive Director,
Uganda Road Sector Support Initiative (URSSI)
Presentation at a Regional Meeting for Uganda,
Tanzania & South Sudan held in Kampala 30th-31st July
2015

2. Introduction
 Uganda operates a full liberal financial
and market economy
 Several players both Formal and
Informal
 Banking Sector still largely
oligopolistic with prohibitive interest
rates
 Civil Society Role Undefined but
emerging

3. Context
 Banks largely funded by customer deposits accounting for 80.6% of total
Liabilities
 Interest rates quite prohibitive hovering between 20-27%
 Banks competing in small market, Profits grew by 17.2% in 2014
 Tax Regime skewed towards “Collectivism”
 Low Levels of Disposable income
 Local Currency Shunned in favor of Forex
 NSSF portfolio is 6% of Country’s GDP
 Large Unregulated Financial Sector

4. Uganda’s Financial Market
25 Licensed Commercial Banks
176 Licensed Forex Bureaus
Three MDI
Six Mobile Money Operators
One Capital Market
24 Insurance Companies
One Pension Operator
90 MFI and Unspecified Number of SACCOs
Unspecified Number of Money Lenders (unregulated)

5. Uganda’s Financial Outlay

6. Annual Bank Assets &Deposits
Financial Year 2013 2014
Annual Deposits
2014
11.5 Trillion 13.2 Trillion
Total Loans 8.3 Trillion 9.4 Trillion
Total Bank Assets 17.3 Trillion 19.6 Trillion
Bank Profits after
tax
414 Billion 485 Billion

7. Role of Civil Society
• Closely monitor operations of financial
institutions guiding citizens – create a
formidable partnership that shares
information on trends and processes of
banking and Financial sector in the
country.
• Help integrate citizen’s aspirations and
concerns by articulating and helping
masses to comprehend fiscal policy
parameters through mass senstisation

8. Role of Civil Society
• Continuous dialogue with policy makers
and Government bureaucrats to
harmonize positions on prudent macro
and micro level interventions in the
financial sector
• Research and Interrogation on new
knowledge frontiers with up-to-date
information – Knowledgeable policy
informers

9. Role of Civil Society
• Act as a link between citizens and
fiscal institutions in simplifying
complicated macro economic
information into user-friendly,
common man’s information
• Advocacy interventions for fairer
fiscal policies that benefit the
largest proportion of the citizenry

10. Conclusion
Uganda operates a fully fledged financial
economy with the largest number of citizens not
fully integrated into the system. Whereas the
mainstream banking sector is highly regulated by
the Central Bank, the rest is either largely in its
infancy or medieval stage at best.
Civil society can play a pivotal role in forging new
ways of promoting and advocating for reasonable
fiscal instruments and interventions that are all-
encompassing for citizen-inclusive monetary
agenda.

11. Thank You
Info@ugandaroadsector.org
www.ugandaroadsector.org