Mutebile comes out to defend BoU, says Central Bank soundly managed

By our reporter

Bank of Uganda Governor Prof. Emmanuel Tumusiime Mutebile has come out to defend his institution following claims that its management is guilty of incompetence and is no longer up to the task of executing its constitutional mandate.

In his letter published in the New Vision, Mutebile said if anyone is to objectively judge the competence of the BoU, he or she should look at how it has performed in relation to its core strategic objectives: controlling inflation and regulating the banking sector to protect depositors and the overall stability of the financial sector.

“Let us first consider the control of inflation. The BoU has a target to hold annual core inflation to a maximum of 5 percent on average over three years which is normally considered to be a medium term horizon. Over the last three years, from April 2015 to March 2018, annual core inflation has averaged 5.1 percent. That hardly suggests that, in terms of macroeconomic management, the BoU is incompetent,” said Mutebile.

“With regard to the regulation and supervision of banks, I believe that our record speaks for itself. In the last three years, the BoU has had to intervene in three out of the 26 banks operating in Uganda during that period, two of which, Global Trust and Crane Bank, were closed (the third was temporarily taken over by the BoU because of problems in its parent bank in Kenya). In all three cases, the interventions of the BoU followed the procedures set out in the banking laws; the Financial Institutions Act. Because of prompt interventions by the BoU, customers never lost any of their deposits in any of these banks,” he added.

According to the Governor, he believes BoU has succeeded in delivering on its core mandate of protecting depositors and the stability of the financial system.

He further refuted claims that him, his deputy and other senior officials fight each other as it has been alleged by a number of media outlets such as the Independent Magazine.

“I would also like to refute the allegation made severally by the Independent magazine that I, my Deputy and other senior officials “fight each other”. I continue to count on the confidence and support of my Deputy and all other members of the Board of Directors, Executive Directors and staff,” he noted.