People protest against former BoU Executive Director of Bank Supervision Justine Bagyenda

The Bank of Uganda Governor Professor Emmanuel Tumusiime Mutebile has written a terse letter to the Inspector General of Government (IGG) Justice Irene Mulyagonja Kakooza, advising her to stop interfering with the central bank internal operations.

Prof. Mutebile was reacting to a March 12 letter from Justice Mulyagonja, in respect to the early February retirement of former Bank of Uganda Executive Director for Bank Supervision, who had challenged the BoU decision to send her into early retirement, and also refused to hand over office to her successor, Dr. Twinemanzi Tumubweine.

But in his five-page strongly-worded letter that is copied to among others President Yoweri Museveni, Speaker Rebecca Kadaga and Prime Minister Dr. Ruhakana Rugunda and finance minister Matia Kasaija, Prof. Mutebile draws the attention of the IGG to Article 162 (2) of the Constitution that guarantees the independence of the BoU from direction of any authority in the country. Others copied in include the Attorney General, the Auditor General and members of the BoU Board of Directors.

‘In performing its functions, the Bank of Uganda shall conform to this Constitution but shall not be subject to the direction or control of any person or authority,’ the Article states in part.

Mutebile adds: ‘The Article in question is clear, unequivocal and unambigious on the Independence of the Bank of Uganda and the fact that Bank of Uganda is not subject to the direction or control of any person or authority and therefore no outsider, including your office can interfere with the decisions of the Bank of Uganda’.

Further, to reinforce his argument, in the March 19 letter Prof. Mutebile makes reference to judgments on authority made by the courts in respect to the IGG’s directives regarding some financial institutions, pointing out the Bank of Uganda vs COWE Appeal No. 35 of 2007 and MC 303 of 2013 in respect to Uganda Development Bank Board of Directors, its Chief Executive Officer Patricia Ojangole and 4 others vs the Attorney General, both of which upheld the independence of the BoU.

According to Prof. Mutebile, the IGG’s directive in respect to Ms. Bagyenda’s retirement is ‘impugned’ and if effected, will negatively impact on the operations of BoU and the entire banking sector in the country.

Ms. Bagyenda who, in her capacity as ED bank supervision was responsible for overseeing the activities of commercial banks in the country has been on the spot, linked to the closure and subsequent boarding off of Crane Bank.

Her name has also surfaced in financial transactions of whopping sums, raising eyebrows with accountability oversight institutions like Parliament, whose committee on Commission, Statutory Agencies and State Enterprises (COSASE) has ordered the Auditor General John Muwanga to interest himself in Ms. Bagyenda’s finances.

Indeed, Budadiri West MP Nathan Nandala Mafabi, an accountant and lawyer, has dubbed Ms. Bagyenda’s transactions as ‘money laundering’.