The former Bank of Uganda (BoU) Governor Prof. Emmanuel Tumusiime-Mutebile died in Nairobi Hospital Sunday morning. Tributes and condolences from Ugandans and foreign nationals continue to come in, the highlight of it came from Kenyan president Uhuru Kenyatta, who in his condolence message to his counterpart Yoweri Museveni, said Tumusiime-Mutebile was a reformer whose helm at BoU ensured Uganda’s and the region’s stability and progress.
This news website identifies different issues and areas that government technocrats and local bankers can do to continue implementing what Mutebile and others started for the betterment of the Ugandan economy that is slowly moving from a peasantry to modern state where forces of demand and supply determine prices in a liberalized economy.
Continue supporting Mutebile’s economic reforms
Tumusiime-Mutebile’s economic reforms and policies in Uganda speak for themselves, even though some local economists and politicians didn’t believe in them 100 percent. Analysts this website has talked to, say the technocrats in the finance ministry and the Bank of Uganda must observe and give the reforms full support even after Mutebile is gone. “You know that Mutebile was against the government’s rising appetite to borrow from local banks. His argument was that the money from local commercial banks should go to private players in the form of credit for production instead of going to non-productive sectors of government.”
BoU senior managers must tame political pressure
At one time Mutebile regretted drawing money from the national reserves accounts to fund the 2011 elections that could later cause hyperinflation in Uganda. The technocrats he has left behind must remember this and never do the same mistake that Mutebile admitted, even though Mutebile did that out of political pressure coming from the government of the National Resistance Movement (NRM) that tabled many promises that far outweighed the available resources.
The government economic technocrats, analysts say, must become braver and tell off politicians who agitate for creation of more political units that force the government to borrow so as to spend on civil service administration. Public debt stands at about Shs72.5 trillion and Mutebile had been warning the government on escalating debt as the government borrows domestically and externally.
“Currently, the available resources are too little to match the new political units such as districts, cities, counties and town councils that produce nothing for sale to fund their activities. They have to depend on the central government whose resource envelope is very small. Mutebile always cautioned the government on borrowing to fund such political units that don’t produce for export either,” said an opposition politician in Kampala.
More so, senior managers Mutebile has left at BoU must insist and fight for the independence of BoU. Even the new governor to be appointed must be able to defend the independence of BoU. “They must not give in especially to politicians and foreign agencies. “This is what Mutebile did to position BoU as a respectable institution.”
Ramathan Ggoobi, the Secretary to the Treasury lauded Mutebile for ensuring independence of BoU.
Fighting corruption in public service
Ever since he joined government service, Tumusiime-Mutebile steered himself off corruption scandals. It is said the late governor utilized his salary and other benefits allotted to him to develop himself. He never used public resources to enrich himself. He is credited for financially supporting social causes using his own money. It is a work ethic that the technocrats in government can copy, especially in a country that loses trillions of shillings to corruption annually,” said a journalist that always attended Mutebile’s press briefings on the monetary policy.
Mutebile’s signature on banknotes should remain
A worker at BoU thinks that Mutebile’s signature on the Ugandan currency should stay for five or 10 years even after a new governor is installed at BoU. “As an honour to Mutebile, his signature should remain on Uganda’s banknotes for a while,” said a BoU staff member who says the late Mutebile deserves a state burial. “He was not panicky even when BoU faced challenges such as COSASE inquiry,” she added, adding that Mutebile was not a micromanager as he left his juniors to excel in their work.
Reforms at BoU must now take shape
Now that Mutebile is gone, suggested reforms at BoU as per COSASE report of 10th parliament must be implemented to keep the central bank running better. For instance, parliament in the report recommended that both the governor and his deputy cease sitting on the BoU board to ensure that the principle of checks and balances works. Sources at the finance ministry told this news website that the late wanted the status quo to remain, the reason why that recommendation has never been respected by Ministry of Finance.
Bankers must stick to good governance as advocated by Mutebile
Uganda Bankers Association (UBA), an umbrella of over 20 commercial banks in Uganda, will have to continue adhering to good banking practices such as good governance and integrity. Good governance was called for and supported by Mutebile, especially as cases of fraud kept rising within the banking industry. Cheating of clients by banks has come down and few cases exist in courts of law, records show, even though on the other hand some clients have tried to cheat the banks as well.
Continue supporting Mutebile’s drive to cut commercial interest rates
Further UBA will have to continue supporting Mutebile’s drive to cut commercial interest rates in the country. At the time of his death, Mutebile had pushed the central bank rate (CBR) downwards to the current 6.5 per cent, an enticement to encourage banks cut their interest rates so as to boost private sector credit which critical in production. “High interest rates are not good for investment as they deter investors from borrowing, which results in less production and less exports and less foreign exchange,” said an economist from Makerere University, adding that banks have reasons that have resulted into the average lending rate of about 20 percent, despite the continuous fall of the CBR.
Technocrats must continue negotiation for EAC Monetary Union
Regionally, the late Mutebile was one of those technocrats working to establish the East African Community Monetary Union (EACMU) where the EAC Partner States want to establish a single currency to operate across Partner States. This will be important in cutting down costs of doing business amongst citizens of Africa’s most dynamic regional bloc. Ugandan Technocrats must now continue with what Mutebile left, though they must protect Uganda’s interests as the push for the creation of monetary union and single currency continues.
Mutebile has left this world but his legacy of creating a microeconomic stability for Uganda will remain. Government and private players especially those in the financial sector will miss him. They will only please him as he lies in his grave, if they carry on the reforms he supported to lift the country out of biting poverty.
Among others, fellow economists like Pro Ezra Suruma (OPM), Richard Byarugaba (NSSF), Ramathan Ggoobi and Fred Muhumuza (Makerere University) have heaped praises on Mutebile for contributing to keep Ugandan economy afloat.
