Were Mutebile, Kasekende, Bagyenda running Bank of Uganda like Chuck Norris?

By Mike Ssegawa

The most outstanding advert this year was done by telecommunications company MTN, while promoting their mobile payment service – Momo.

The advert features a man called Bosiko, a villager who is introduced to mobile payment and fell in love with the system. In the end he did not care how he spent his money since it was so easy to spend.

The biggest and most important news story in Uganda should be the ‘trial’ of Bank of Uganda. BoU is the engine of the economy and its health or ill-health is reflected in its functions.

The Central Bank’s reputation, however, is in tatters. Its long hidden skeletons are now out for everyone to see.

What happened?

BoU, which was established in 1966 by an Act of Parliament, is run unchecked. However, like everyone is hearing what is coming out of Parliament, Auditor General’s reports or media platforms, tells you that casinos or brothels are run better.

The governor of Bank of Uganda is power by himself, knowing well that whereas BoU is wholly owned by the government of Uganda, it is however not a government department.

So, no one ever tells the governor how to run the Bank. Not even the President who appoints him. Not even Parliament which established the bank, or board of directors since it is the governor who chairs the board himself.

And for BoU, there has been only one board member – the governor himself, possibly with his deputy Louis Kasekende, who actually has been running BoU while Mutebile was recouping from ill health.

The impunity at Bank of Uganda however was debated by the public in March and April this year when IGG Irene Mulyagonja sought to reign in Governor Emmanuel Mutebile over sending Justine Bagyenda and others on early retirement. Bagyenda’s group petitioned Mulyagonja who re-instated them. But that was after a fight with Mutebile. The two wrangled over their powers, whereby Mutebile insisted the IGG had no business putting her nose in the bank’s affairs. Mulyagonja on the other hand said as long as the Bank of Uganda was a government of Uganda entity, her hand would reach it especially after running the bank irregularly. It was actually Mulyagonja’s Inspectorate that first went official on highlighting the impunity at the Central Bank.

The lame-duck of the Financial Intelligence Authority had failed to question one of its board members whose wealth portfolio had been leaked to the public – which also pointed to another sick man of the Ugandan economy. They backed down when the nation needed to hear their voice.  The truth is no one knows what the FIA does, until, a political actor is brought into check! This was its chance to show it had any teeth in it.

While the FIA chickened out, at least the IGG put the governor in his place, telling him to run the bank properly or, she will come for him.

After the confrontation, MP Abdu Kantuntu-headed COSASE picked interest in the affairs of closed banks. The Auditor General had earlier been locked out of Bank of Uganda.

But speaker of Parliament Rebecca Kadaga added unto Cosase’s voice, and sent the Auditor General back to Bank of Uganda.

Oh my God! The rot John Muwanga found at the Central Bank made its officials even shy away from sharing some documents, or rather, reported them missing. Which means, the officials have been running the economy, particularly monitoring the commercial banks at their whims!

From these developments, the invincibility of Prof Mutebile and his BoU was stripped. It dawned on Ugandans that the central bank could be the worst run financial entity in the country.

Were it not for the closure of Crane Bank, this rot could have continued unabated. The country marveled at revelations that Crane Bank was closed without following the law. And that the bank could have been saved were it not for the arrogance of officials at the central bank. But Crane Bank wasn’t alone. All closed banks could have been saved if the central bank was run by people of good will, and were acting in good faith.

Intentionally, the tax payer lost billions of shillings in alleged recapitalisation of the banks before sale or winding down. And over the years, no one questioned BoU where that money went.

Until recently.

That is why top officials at BoU are running around like headless chicken.

For example, it was unheard of that a buyer can write a sale agreement and set price and when to pay. It happened in Uganda just last year. And to make matters worse, the Bank of Uganda went ahead to donate buildings belonging to another company to DFCU, which means they even never looked at what the bank’s assets and liabilities.

This leaves critics to question the spirit of the closure and sale if it were not for grabbing or corruption!

After doing this for a long time, Crane Bank owner Sudhir Ruparelia became BoU’s waterloo.

Already according to information available, Sudhir, the former owner of Crane Bank was willing to pay all the money Crane Bank might have lost. He only asked for a longer timeframe so that the fall of Crane Bank doesn’t affect his business empire.

Sudhir was being reasonable, by the way, because his other businesses employ thousands, and pay billions of shillings in taxes. Those businesses are therefore key pillars to the Ugandan economy. Unfortunately BoU official would not hear any that. They want Sudhir to pay through his nose at whatever cost.

And before the negotiations were over, Bank of Uganda lawyers leaked to New Vision the now infamous audit of Crane Bank, which is being contested in courts.

The purpose of these leaks were to bias the public against Sudhir and shareholders of Crane bank. Unfortunately, the campaign backfired. Bank of Uganda went to court to force Sudhir to pay forcefully. And again, the courts have so far acted with wisdom and prudence, hearing each side and giving time to the law to take its course.

Time has however, proved that BoU was in a habit of catching bank owners on the wrong side. But instead of facilitating them to return on track, greed ate into them and were actually making a lot of money in closing banks.

The Bank of Uganda is on trial before the eyes of Ugandans but also before the international banking fraternity. This process is good its taking place, and institutions that can help BoU return on the right track should be applauded for standing up.

The IGG and Parliament should be encouraged to dig deeper in order to come to the bottom of this rot, and then, help the bank of bankers return to its solid foundation.

And if heads must roll, let it be. This will be a way to rebuild our shaky economy which has resulted from the impunity of the current BoU managers.

I can state without fear of contradiction that people and agencies that fight to cover the rot at BoU are not patriotic since they want the ailment eating the central bank to continue unabated. This cancer must be removed to ensure the reputation of Uganda is restored.

Parliament has given the central bank enough time to clean its filth since Cosase picked interest in matters that have brought about the closure of over seven banks in about a decade!

It is clear, there has been total break down for supervision and monitoring of the economy, and those failures can now be seen in closed banks, much as the ordinary people have all along felt that indifference and incompetence.

The fact that BoU officials have failed to look up simple things such as minutes for deliberations before closing of some banks, indicates that the managers of the Central bank should not be in those positions. And for causing such losses and damage to our economy and livelihoods of employees and bank users, they must pay for it.

However, most importantly, how Bank of Uganda is run may need an overhaul, or else, the central bank should not be left to Bosikos to run it.