On 24-25 September, a two-day workshop on Risk-Based Supervision (RBS) was facilitated by the International Fund for Agricultural Development (IFAD) and Cenfri to enhance financial oversight and inclusivity.
This initiative is part of the broader PRIME Africa Programme, co-financed by the European Union in collaboration with the Bank of Uganda (BOU), Capital Markets Authority (CMA), Insurance Regulatory Authority (IRA), Financial Intelligence Authority (FIA), and Uganda Microfinance Regulatory Authority (UMRA).
The workshop is part of the recently launched Remittance Innovation Toolkit, which seeks to boost regulators’ capacity to adopt and implement risk-based supervision practices. This toolkit empowers regulators to identify and address key risks within Uganda’s financial ecosystem while fostering inclusivity, especially for marginalized populations.
Importance of risk-based supervision
David Kalyango, Executive Director of Bank Supervision at the Bank of Uganda, inaugurated the workshop with opening remarks that underscored the importance of an adaptive, risk-sensitive supervisory framework. He stressed the importance of not applying “one-size-fits-all” regulatory frameworks, often leading to the unintended exclusion of vulnerable groups.
“The different topics for this two-day workshop are key to an effective risk-based supervision regime and enable us to develop ad hoc work plans,” Kalyango said. “I would like to remind all of us, as regulators, of the potential negative effect of applying standardized measures since these, in the same case, don’t fit marginalized people, especially in rural areas. Therefore, let’s try as much as possible to balance enforcing compliance and promoting financial inclusion.”
The workshop targeted 22 public officers from Ugandan financial oversight authorities, aligning with the overarching goal of the PRIME Africa Programme, which strives to reduce the cost of remittances and promote inclusive financial systems across the African continent.
Strengthening Uganda’s Financial System
The Risk-Based Supervision Workshop came at a pivotal moment for Uganda’s regulatory environment. Uganda was removed from the Financial Action Task Force (FATF) grey list, a global watchlist of countries requiring increased scrutiny due to their financial systems’ vulnerabilities, just a few years ago. Kalyango recognized the efforts of various regulatory bodies, including the CMA, IRA, UMRA, and FIA, in achieving this milestone but also cautioned that maintaining compliance and fostering inclusivity are ongoing challenges.
“I would like to thank all the agencies present here (IRA, UMRA, CMA, and FIA) for their outstanding work over the past few years. Their efforts have been instrumental in ensuring that Uganda was removed from the FATF’s grey list. Approaching this workshop, we were asked what success looks like. I believe our success should go beyond staying off the grey list.”
Core elements of risk-based supervision
The workshop included sessions on the core elements of risk-based supervision, including identifying, assessing, and prioritizing risks based on their potential impact. It aimed to provide a comprehensive understanding of how regulators can develop more effective supervisory strategies that adapt to the realities of different sectors of the economy, thus ensuring stability and integrity in Uganda’s financial system. The workshop facilitated discussions on various approaches regulators could use to implement this model effectively while maintaining a sharp focus on inclusivity.
Way forward
Hannington Wasswa, Director of Commercial Banking at the Bank of Uganda, delivered the closing remarks. He acknowledged the importance of such initiatives in keeping Uganda’s financial system resilient and forward-looking. He thanked IFAD and Cenfri for their instrumental role in organizing the training.
“I wish to thank IFAD and Cenfri for putting together this critical training on risk-based supervision to enhance BOU and other authorities and keep the country off the grey list,” Wasswa stated.
Wasswa’s comments reflect the broad consensus among Uganda’s regulators that continuous learning and capacity-building are essential to maintaining a strong, inclusive, and transparent financial system. The success of the Risk-Based Supervision Workshop in Kampala is not just measured by the knowledge shared during the two days but also by its potential long-term impact on regulatory practices across Uganda.
In an increasingly interconnected world, financial supervision that can adapt to local contexts, prioritize risks, and foster inclusivity is more important than ever. The workshop marks a key milestone on Uganda’s journey toward a more robust and equitable financial system.