Heads must roll! Govt set to ring changes at BoU after parliamentary inquiry

KAMPALA – Government has promised to make several operational and policy changes at the Bank of Uganda as recommended by a parliamentary committee following an inquiry into the operations of the central bank.

The recommendations, which were made by the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) chaired by Mr Abdu Katuntu, came after months of quizzing BoU top management over the closure of seven commercial banks, including Crane Bank Limited.

Finance minister Matia Kasaija is quoted by Daily Monitor as saying that the Katuntu committee sent him the report and soon action will be taken against those found culpable.

“We are moving, but I cannot give you the whole detail. We have received a report from Bank of Uganda showing the actions they have taken. But I cannot give you details on these actions too. The report was sent to me about three days ago,” Mr Kasaija is quoted as saying by Daily Monitor in a telephone interview.

The minister also revealed that he has tasked the central bank to internalize the report and update him on the internal actions they will take.

The Prime Minister, Dr Ruhakana Rugunda, had in his address to Parliament, said government would take serious action on the several inconsistencies in BoU’s closure of commercial banks.

Ex-PM Amama Mbabazi and current PM Ruhakana Rugunda share a light moment with Business mogul Sudhir Ruparelia as the Ramaphosa and Bridget Kuhingira ceremony in Kololo August 4 ( PHOTO/PML)

“When banks like Cooperative Bank closed, the local people got a raw deal because they found it easier to deal with it as it was locally founded. We agree for example, that there should be separation of central bank supervision and liquidation into two departments to curb the inconsistencies that have arisen,” Dr Rugunda said in a statement to Parliament.

He also noted that there was no need for the central bank to hire private law firms, MMAKS and Kirkland Advocates, to oversee the takeover and closure of the institutions.

“It was an unnecessary and costly venture, especially since BoU has a well-qualified legal team which is competent to handle such issues,” Dr Rugunda said.

The central bank has been in the spotlight over the last six months for wrong reasons.

As reported by this website last week, a Presidential Committee unearthed more inconsistencies in the management of the central bank.

The committee again chaired by Mr Abdu Katuntu was set up by President Museveni in May 2018 to probe alleged decisions of Governor Emmanuel Tumusiime-Mutebile on February 7, the same year when he issued an internal memo announcing a number of staff transfers and appointments.

Former chairperson of the Committee of Commissions, Statutory Authority and State Enterprises (COSASE), Abdu Katuntu cautioned the Central Bank about its security. (PHOTO/File)

In the memo, Mr Mutebile appointed five staff from outside the bank to various positions, a decision that prompted some dissatisfied staff to petition IGG Justice Irene Mulyagonja.

In the report, the committee reported to Mr Museveni that the central bank was polarised by cliques.

The report said all the staff interviewed indicated in a way that they belong to at least a clique aligned to either Mr Mutebile or Mr Louis Kasekende, the BoU deputy governor.

The committee faulted the Governor on taking individual decisions by ignoring the board to promote nine staff to the level of Assistant Directors, creating new positions and recruiting five new officials from outside despite not meeting entry requirements to BoU positions.
However, the probe exonerated the Governor on alleged illegal transfer of staff save for the chief Internal Auditor, Ms Deborah Kabahweza, whose movement the committee concluded was “blatantly irregular and outside the powers of the Governor.

The five officials that were externally recruited are Dr Twinemanzi Tumubweine, the executive director for supervision, Mr Valentine Ojangole, the director for banking, Mr Edward Mugerwa, the director for IT Operations Department, Ms Kande Sabiiti, the procurement assurance manager (director), and Dr Natamba Bazinzi, the assistant director currency administration in the Currency Department.

Of the five, only Mr Ojangole was found to have passed the minimum entry requirements.
The rest were either underqualified or did not have the requisite experience for the said offices.

To ease the tensions at BoU, the tripartite committee also recommended the separation of the position of the governor from that of the board chairman and also highlighted the need for the President to create a second position of Deputy Governor.
One of the deputy governors would be in charge of administration whereas the other would help the governor on the core function of the central bank because all the findings indicated that the Governor is overloaded and exposes his position to unnecessary controversies.


The committee report concluded that BoU officials had made many “questionable decisions” and contravened sections of the Financial Institutions Act during the closure and sale of seven commercial banks.

These are Crane Bank, National Bank of Commerce, Global Trust Bank, Greenland Bank, Cooperative Bank, International Credit Bank, and Teefe Trust Bank. The committee recommended that all BoU officials, who failed to properly execute their duties in accordance with the law, should be held responsible, BoU should address the probable financial loss occasioned. It also proposed that the appointing authority consider reviewing the BoU Board; separating supervisory and liquidation functions of BoU to avoid conflict of interest.



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