Ministers have authorized their finance ministry counterpart Matia Kasaijja to enforce the amendment of the Bank of Uganda Act, 2000, in a bid to streamline its operations, in line with the Central Bank’s constitutional roles that include financial prudence.
During a meeting at State House, Entebbe, the ministers noted that all BoU objectives will be achieved through the amendments, in the process enhancing the central bank’s capacity to respond to the challenges arising from the ‘evolving financial market environment’.
‘Government will update the objectives and functions of BPU to reflect changing mandate and roles of the central bank and outline the monetary policy operations of the Central Bank (BOU)’ Minister Kasaija said in a cabinet meeting chaired by President Yoweri Museveni yesterday.
According to Kasaija, ‘government will ensure effective implementation of the requirements of the new national legislation, regional (EAC) commitments and strengthening all provisions in the current Act that are considered inadequate for the effective execution of BOU’s constitutional roles in the changing environment and clarify those that have presented interpretation challenges’.
The ministers said that after amending the BoU Act, Kasaija will issue draft instructions to the First Parliamentary Counsel to have the amendment Bill drafted and then tabled before Cabinet for deliberation.
Previously, the BoU has been accused of among other omissions, failing to regulate mobile money services that are offered by telecom companies.
The BoU also reportedly failed to block the 2010 purchase of Sukhoi fighter jets at a cost of about US$744 million.
The central bank has also been accused of failing to effectively supervise commercial banks, something that led to the closure of some banks like Crane Bank, Global Trust Bank and the National Bank of Commerce.
Similarly, the central bank also soiled its fingers when officials there reportedly spent UgShs125 million to buy 350 pens for its Golden Jubilee commemoration.
Recently, BoU Governor Prof. Emmanuel Tumusiime Mutebile made a number of changes, retiring the Director of Bank Supervision Justin Bagyenda, and also effecting changes of 30 senior staff.