Parliament has held the first reading of the constitution amendment 2020 to reduce powers of the Governor and deputy governor of Bank of Uganda (BoU).
Currently, the governor and deputy governor are the chairperson and deputy chairperson of the board of directors of the Central Bank respectively.
However, during Parliament Committee on Commissions, Statutory Authorities and State Enterprises (Cosase)’s probe into the closure of seven commercial banks by BoU, It was discovered that the two most powerful leaders in BoU were given a lot of powers by the constitution. Findings by Parliament found that the lack of supervision for the governor who is also the chairman of the Bank’s board was itself causing supervisory challenges at the Bank of Uganda. Currently, the governor, according to the Bank of Uganda Act, is also the chair of the board of directors and is deputized by his deputy. The other members are secretary to the treasury Keith Muhakanizi, Dr. Willam Kalema, Mr. James Kahoza, Ms Jude Obitre Gama and Ms Josephine Okui Ossiya.
While handing over the report to the Speaker of Parliament Rebecca Kadaga in 2019, the then chairperson of Cosase Abdu Katuntu proposed a motion to reduce powers from the two most powerful leaders of the Central Bank in order to avoid other blunders which may arise in future and affect the economy.
Katuntu also said the constitution didn’t stipulate the specific functions of both the governor and his deputy which may also be a problem if not solved.
To solve the gaps that were highlighted by Cosase report, on 28th February 2019, Parliament passed a resolution in favour of some of the proposals that were made in the report such as amending article 161 of the constitution.
While tabling the bill on Thursday, Igara East MP Michael Mawanda told the House that the objective of the bill is to provide for a Chairperson of the Board of Directors of the Central Bank, not being the Governor as well as provide for the governor as the Chief Executive Officer of the Central Bank, to come up with the functions of the governor, the appointment and functions of the deputy governor and other related matter.
He added that the current article 161 under chapter nine of the constitution about Finance only narrates the circumstance under which the governor can be removed from the position.
Its clause 4, also gives other power to them where it says that the office of the governor and deputy governor each shall be a public office and the governor and the deputy governor shall respectively be chairperson and deputy chairperson of the board.
According to Mawanda, the new amendment Bill 2020 has also other three insertions under article 161 which include;161A, 161B, 161C that explain in details about the roles of the governor and the deputy governor.
“There shall be a governor appointed under article 161 who shall be the Chief Executive of the Bank of Uganda. The office of the governor shall be a public office,” states the Bill.
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