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A year later, BoU has no Governor

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On January 23, 2023, it marked one year since the demise of the Governor of Bank of Uganda-BoU, Prof. Emmanuel Tumusiime-Mutebile. Mutebile died at Aga Khan Hospital where he was admitted over diabetes-related complications.

Since his death, President Yoweri Museveni has not appointed a substantial economist to take up the position of Governor.

The BoU has since been steered by Deputy Governor Michael Atingi-Ego, but his leadership has been criticized despite tremendous strides taken to revive the country’s economy which was hit by Covid-19. He is criticized for a steady increase of the CBR rate from 6.5 per cent to ten percent as businesses struggle to recover from the effects of Covid-19.

Interest rates stayed on an upward trajectory in the three months to November 2022 reflecting the tight financial conditions. Both Treasury yields and lending rates rose. The growth in private sector credit remained below historical averages owing to the tightening of monetary conditions. Total private sector credit growth averaged about 10.5 per cent, year-on-year, in the three months to October 2022.

Excluding the exchange rate changes and capitalized interest, private sector credit declined to 8.2 percent in the three months to October 2022 compared to the growth of 8.6 percent in the three months to July 2022. The growth in the Shilling loans, nonetheless, has increased to 12.2 percent from 9.6 percent over the same period.

As of November 2022, total public debt stock continues to increase from Shs 73.2 trillion trillion to Shs 79.7 trillion. The increase was due to a 5.2% increase in external debt and a 14.9% increase in domestic debt. External debt maintained the dominant share of 60.4% of the total public debt.

Despite criticisms, recently, Atingi revealed that inflationary pressures are losing momentum, driven mainly by the declining crude oil prices, easing supply-side challenges, a stable exchange rate on account of the prudent monetary policy actions by the Bank of Uganda (BoU), softening domestic demand, and diminishing base effects associated with higher prices of imported commodities.

“On a month-on-month basis, headline and core inflation was 0.1% and 0.2%, respectively, in December 2022, down from a peak of 1.5% and 1.2% in September 2022. On an annual basis, headline and core inflation was 10.2% and 8.4% in December 2022, down from 10.7% and 8.9% in October 2022,” Atingi said.

Food crop inflation remains elevated, edging up slightly in December 2022 to 29.4% from 27.8% in November 2022 because of the effects of the drought. Nonetheless, our assessment shows that food crop price increases are temporary and expected to fade in the coming months.

The exchange rate has however continued to be stable, gaining by 1.6% in the three months to December 2022, supported by the prudent monetary policy and the recent declines in the global crude oil prices, which somewhat eased the pressure on the deteriorating terms of trade, increased personal remittances, and foreign direct investment inflows to the oil sector.

Mutebile served as Governor and Chairman of the Board of Directors of the Bank of Uganda from 2001 till his demise in 2022.

A seasoned professional economist and reformer, he spearheaded the design and implementation of the Economic Reform Program that restored Uganda from the economic crises of the 1970s and 1980s to sound economic performance during his service as the Permanent Secretary/Secretary to the Treasury in the ministry responsible for finance, planning, and economic development.

He worked as a consultant for multilateral and regional organizations including the World Bank, International Monetary Fund, Organization for Economic Cooperation and Development, Macroeconomic and Financial Management Institute of East and Central Africa, UK Department for International Development, the North-South Institute in Canada, and for the governments of Rwanda, Kenya, Tanzania, Eritrea, and Nepal.

He was a member of the High-Level Panel of the UNDP for the production of the Human Development Report of the UNDP; the Management Group for overseeing the evaluation of the implementation of the Comprehensive Development Framework of the World Bank in 2001; and the High-Level Panel of Eminent Persons to advise the President of the African Development Bank on the strategic future of the African Development Bank in 2006.

He held Fellowships from the World Bank Institute and Rotary Foundation of Rotary International. He was educated at Makerere University, Durham University, and Oxford University.

He was an Honorary Professor of Makerere University, an Honorary Doctor of Philosophy of Nkumba University, a Companion of the Commonwealth Partnership for Technology Management (CPTM), and a Doctor of Laws (Honoris Causa) of Bishop Stuart University.

Makerere University honored him with the establishment of the Prof. Emmanuel Tumusiime-Mutebile Chair of Monetary Policy, Banking and Finance; and the Tumusiime-Mutebile Centre of Excellence.

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