Parliament during the plenary yesterday granted Igara County East Member of Parliament, Micheal Mawanda, leave to introduce a private member’s bill that seeks to amend Article 161 of the Constitution to remove the Governor and Deputy Governor Bank of Uganda (BoU) from serving as chairperson and deputy chairperson of the board of directors respectively.
“We have had problems of accountability where a budget is made by top management headed by the Governor and approved by the board headed by the Governor. If there is a mistake that is made by management and carried by the board, which is headed by the same person, we shall not be able to rectify this problem,” said Mawanda.
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Emmanuel Tumusiime-Mutebile and Dr Louis Kasekende are the current BoU governor and deputy governor respectively.
Mawanda continued, “currently, there is no ‘second eye’ in Bank of Uganda. This is the reason we are seeking separation of powers where the Governor becomes the chief executive then an independent person is appointed to head the board which can oversee the operations of Bank of Uganda.”
This bill follows a recommendation from a report by parliament’s committee on Commissions, State Authorities and State Enterprises (COSASE) calling on government to establish an independent board of directors to supervise managers at BoU.
Confidential report blames Tumusiime-Mutebile for illegal staff changes
A confidential report of the presidential tripartite committee, authored in February this year, blames Tumusiime-Mutebile for personally recruiting five senior staff without subjecting them to any interviews as required by the Bank of Uganda Act, which he is supposed to adhere to.
Worse still, most of the staff head picked by the governor without the involvement of other board members did not meet the qualifications and experience required for the jobs. For instance, Dr. Twinemanzi Tumubweine (Executive Director Bank Supervision) does not have any experience in commercial banking. BoU’ board members where Tumusiime-Mutebile is chairman disowned him on most of staff changes at BoU, saying he never consulted them and that it was illegal.
Tumusiime-Mutebile and Kasekende okayed BoU staff via Bank of Uganda Defined Benefits Scheme to invest over 1 percent in DFCU Bank despite the institution being the regulator of the same bank. Some critics have argued that that could be one of the reasons why BoU rushed to sell Crane Bank Limited and Global Trust Bank Limited to DFCU Bank. Tumusiime-Mutebile and Kasekende knew BoU staff would benefit from the transaction via Uganda Defined Benefits Scheme as shareholders.
Elijah Okupa (Kasilo County) said that in countries such as Kenya and South Africa where the governor is separate from the board, the central bank runs smoothly.
Recalling what he termed as trouble in BoU, David Abala (Ngora County) also called for separation of the decision making function from administration.
“You cannot fuse administration with policy making; we know the trouble we saw in Bank of Uganda investigations; this bill is the medicine that will heal what we saw during investigations,” said Abala.
Rwampara County MP, Charles Ngabirano, proposed that the bill should not only address issues at Bank of Uganda but other government entities in a similar situation.