By Staff Reporter
The Innovative Finance and Capital Markets Section of the Private Sector Development and Finance Division at the United Nations Economic Commission for Africa (ECA) and Frontclear conducted a training programme to bolster the Ugandan banking sector’s capacity to participate in Tradeclear. Tradeclear Uganda is a Frontclear umbrella guarantee facility which aims to increase interbank trading and market liquidity in Uganda. The training programme consists of two Applied Frontclear Academy workshops, which were held in Kampala, Uganda, on 20 – 21 September and 24 – 25 October.
The training workshops focused on two main instruments traded in the money market: repo and swaps. Experts delivered trainings on both the concepts and practices of such transactions, including legal documentation, pricing, execution, settlement, accounting, collateral management, and system booking. The workshops were designed to fill knowledge and skill gaps among market participants in the area of trading money market instruments. As a result, participants have been able to gain a better understanding and confidence in trading repos and swaps, as well as in the use of Tradeclear to boost market liquidity.
The training programme was concluded by a “Fireside Chat”, moderated by Ms. Sonia Essobmadje, Chief, Innovative Finance and Capital Markets Section, Private Sector Development and Finance Division, ECA. Invited panelists shared their insights on enhancing Ugandan money market liquidity, building a benchmark rate in order to improve pricing transparency, and improving global visibility of Uganda’s financial sector:
Mr. Arnold Bagubwagye, Deputy Director Financial Markets, Bank of Uganda (BOU), applauded the initiatives from ECA and Frontclear, such as the Money Market Diagnostic Framework (MMDF). Mr. Martin Nsubuga, Chief Executive Officer, Uganda Retirement Benefits Regulatory Authority, highlighted the role of domestic investors in financing the fiscal deficit and forging competitive pricing in the market. Mr. Charles Katongole, Executive Director, Head of Financial Markets, Standard Chartered Bank Uganda, said the Tradeclear umbrella guarantee facility can address the segmentation issue in the market, and the training workshops contribute to upskilling the teams and giving banks the ability to compete. Mr. Philip Buyskes, CEO, Frontclear, stressed the importance of benchmark issuances and rates for a liquid repo market.
The two training workshops were well-attended and highly commended by stakeholders and market participants for timeliness and shared technical expertise. All confirmed an improved confidence in applying Tradeclear. Each training had around 50 participants from the central bank, the stock exchange, the Uganda Bankers Association, and most commercial banks.
Besides these training workshops on Tradeclear, ECA, with French Development Agency (AFD) funding, has also been working with Frontclear on the analysis based on MMDF for the Ugandan money and interbank markets, which assesses the strengths and weaknesses of the markets from four dimensions: level of development, environment, central bank activities, and resources. The MMDF report is currently under finalization, which will provide meaningful policy recommendations for further market development.