KAMPALA – Bank of Uganda Governor Emmanuel Tumusiime Mutebile has rejected attempts by the Inspector General of Government Irene Mulyagonja to reverse the recent staff changes at the Central Bank.
The changes, effected on February 7 saw the hitherto powerful Executive Director for Bank Supervision Justine Bagyenda replaced and placed on the road to retirement. Ms Bagyenda run to the IGG, who then sought to direct the Central Bank to halt the staff changes.
But in a hard hitting 5-paged letter, Mr Mutebile has said the BOU will reject the IGG’s attempts to interfere in the matters of the Central Bank, because complying would set a “dangerous precedent”.
“Your impugned directive to the Board not to ratify the Governor’s decisions if implemented would have catastrophic effect on the financial sector of Uganda and the economy,” Mr Mutebile wrote.
“The Bank of Uganda shall safeguard it’s independence and ensure that it maintains public confidence in its ability to safeguard a sound financial system free of external influence,” Mr Mutebile wrote in his no-holds-barred March 19 letter.
Mr Mutebile also doubles as the Chairman of the Board of the BOU.
The IGG had in two letters dated February 23 and March 12 argued that while she was aware of the independence of the BOU under Article 162 of the Constitution, such independence could only be guaranteed if exercised in good faith.
But Mr Mutebile has rejected this argument by the IGG, accusing her of trying to introduce “new provisions in a Clear Constitution”.
“Your assertion … is incorrect as it asserts to read new provisions in a clear constitutional provision. The Article in question is clear, unequivocal and unambiguous in far as the independence of Bank of Uganda and therefore no outsider including your office can interfere with the decisions of Bank of Uganda,” Mr Mutebile wrote.
The Governor also reffered her to previous court precedents where her actions in attempts to interfere in staff changes at the Uganda Development Bank had been rejected by the Court. Mr Mutebile also warned her that not even President Museveni nor Parliament had brazenly tried to interfere with the Central Bank decisions, therefore her actions would not be entertained.
Mr Mutebile on February 7 rang changes in the Central Bank, and replaced the underfire executive director in charge of Supervision, Justine Bagyenda, instructing her to process her handover awaiting retirement.
However, the beleaguered banking sector strongwoman rejected the call for retirement, petitioned the IGG and has since been retained at the Central Bank as advisor to the Governor, pending her date of retirement which is due in six months.
She was replaced by Dr Tumubweine Twinemanzi, sourced from the Uganda Communications Commission (UCC) where he was Director Industry Affairs and Content (Economic Affairs).
Ms Bagyenda has come under fire lately over her role in the management of commercial banks in Uganda. Most outstanding among her woes was her alleged role in the mismanagement of Crane Bank which was closed last year and sold at a paltry Shs 200 billion to DFCU bank.
She also faces a parrarel investigation by the IGG over illicit wealth acquisition and was on Wednesday grilled for more than six hours following leakage of her bank transactions in the media. The IGG has charged her with violation of the Leadership code.