A power struggle between Bank of Uganda (BoU) governor Emmanuel Tumusiime-Mutebile and his deputy, Dr Louis Kasekende, over key appointments and policy decisions is threatening the institution’s credibility, with major implications for the economy, PML Daily has learnt.
The central bank has been thrust in the public eye over its recent handling of the Crane Bank sale to dfcu Bank and the recent staff changes at the institution, which saw Parliament and the Inspector General of Government intervene.
However, sources have told PML Daily that the above issues are being brought to the fore by staff at the bank who are split into two camps, with each paying allegiance to either Mr Mutebile or Dr Kasekende.
Dr Kasekende, 59, whose extensive CV spans over 30 years of experience in bank management, is said to have been lured by government from his lucrative job at the African Development Bank, with a view to replacing Dr Mutebile, who is now 69, as the Central Bank’s top boss.
Dr Kasekende joined BoU in 1986 and served in various capacities including Director of Research, Executive Director of Research and Policy and Deputy Governor.
Between 2002 and 2004, he was seconded to the World Bank by government to serve as the Executive Director to the World Bank, representing 22 African countries, including Uganda, on the bank’s executive board.
From May 2006 to 2009, he served at the offices of the African Development Bank (AfDB), in Tunis, Tunisia, as AfDB’s Chief Economist. In January 2010, he was re-appointed Deputy Governor BoU.
Sources inside the bank have told this website that since then, the Deputy Governor has overseen the recruitment of senior bank staff as part of a long-term plan to create his own group of “loyalists” who will not give him trouble when he eventually takes over as Governor.
Some of these appointments are friends and a few have family ties to him, which reportedly elicited complaints from some of the staff, who accused him of tribalism.
Some of Dr Kasekende’s appointments include Benedict Sekabila, Stephen Sendikadiwa Mwebe, Muwanga Lumala, Henry Tamale and David Kalyango. Others are Stephen Mulema, who was recruited from ADB in 2012 as a consultant Financial Markets Department and despite being a consultant, was given permanent salary.
It is believed that among the Deputy Governor’s blue-eyed staff was former BoU Executive Director Supervision Justine Bagyenda, whom it is alleged the former had earmarked for the position of deputy governor when he eventually takes over.
For instance, sources said, Dr Kasekende often left Ms Bagyenda in charge whenever he travelled out of the country. Sources add that Bagyenda worked closely on the take over and sale of Crane Bank and left out other staff, a reason disgruntled staff leaked the sale of the bank to the media.
Sources said some of the appointments made by Dr Kasekende lacked the competence to manage major decisions of the bank and often messed up several bank projects.
This website has seen emails and several memos where several bank staff and consultants wrote to Mr Mutebile, questioning some of Dr Kasekende’s appointment
One of them by Dr Ellyn I. Greenwald, a BoU advisor from the US Department of the Treasury, wrote to Mr Mutebile, expressing concern that an official at the level of Director lacked “the understanding and the ability to grasp basic concepts”.
Then early last year, some staff raised concerns about several Kasekende appointments and petitioned Mutebile and the board of directors. The board is said to have ignored the complaints since Kasekende had reportedly lobbied some of the board members to accept the appointments. However, Mutebile started investigating the claims.
However, his investigations stagnated when he went on sick leave last year. It is said during this period, the bank’s image was suffering a public hit and when he returned, he embarked on a plan to make changes, though without majority support from the board. However, what played in Mutebile’s favour was the unceremonious dropping of Kasekende from the BoU board of directors.
Sources said from that period, Mr Mutebile began drawing a plan to eliminate some of the “wrong elements” at the bank.
And on February 7, he made sweeping changes at the bank, transferring some of Dr Kasekende’s key allies, including Bagyenda. This is said to have shocked and angered Dr Kasekende, who again lobbied the BoU board members to reject the changes. It is believed that the pro-Kasekende allies again petitioned the IGG and Parliament over the staff changes.
However, sources inside the bank told this website that despite the queries, Mr Mutebile’s latest appointments are seen as an attempt to instill confidence in the bank and boost its capacity to handle several fiscal policies in the country.
Previously, junior staff had petitioned the Governor, explaining how some of pro-Kasekende’s team failed to control the depreciation of the shilling when they allegedly mismanaged a scheme aimed at showering up the bank’s foreign exchange reserves. According to sources, the scheme was undermined by senior officials who were leaking information to commercial banks. This forced Mutebile to suspend it.