UGANDA

UGANDA
monitoring. The amendments to the Bank of Uganda Act are under preparation and will
strengthen central bank independence.
Furthermore, we are working closely with the Financial Action Task Force to ensure Uganda’s
prompt exit from their “gray” list of jurisdictions with strategic deficiencies in Anti-Money
Laundering/Counter Financing of Terrorism (AML/CFT). We expect to approve the remaining
pieces of amendments to legislation by end-December 2016, thus allowing an on-site visit early
in 2017 which should culminate with Uganda’s leaving the list in June 2017.
As you know, Uganda’s financial sector is in good health and well capitalized. Most banks are
already meeting Basel III capital requirements which will come into effect in December 2016.
At the same time, Bank of Uganda recently had to take control of the third largest domestic
systemically important bank which had become undercapitalized due to high non-performing
loans. We continue to monitor the stability of the system closely, and are confident that our
actions will protect deposits and safeguard financial sector stability.
These and other details of our economic program are set out in the attached Memorandum of
Economic and Financial Policies (MEFP) and the Technical Memorandum of Understanding (TMU).
In light of the satisfactory performance and our continued commitment to and ownership of the
program, we request completion of the seventh review under our Policy Support Instrument (PSI).
We intend to work with the IMF and other development partners on the implementation of our
program, and will consult with the Fund on the adoption of any further measures, and in advance
of revisions to the policies contained in the MEFP, in accordance with the Fund’s policies on such
consultation. We will provide the IMF with such information as the Fund requests in connection
with our progress implementing the policies and reaching the objectives of the program. In the
context of the eight review of the PSI, we plan to request a successor PSI program. We also
consent to publication of the staff report, the letter of intent, the MEFP and the TMU for the
seventh review under the PSI.
Sincerely yours,
/s/
Hon. Matia Kasaija
Minister of Finance, Planning, and
Economic Development
/s/
Prof. E. Tumusiime Mutebile
Governor Bank of Uganda
Attachments:
1. Memorandum of Economic and Financial Policies.
2. Technical Memorandum of Understanding.
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