Bagyenda-BoU Standoff: Mutebile Stings IGG Mulyagonja: You’ve No Powers over Central Bank
Mutebile Hits at IGG
In February, Mutebile replaced Bagyenda with Dr Tumubweine Twinemanzi.
But Bagyenda and other affected officials ran to the IGG to overturn the changes Mutebile had made.
They also wrote to parliament, asking the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) to take interest in the changes.
Mutebile, Bagyenda and others argued, had made the changes without consulting the BoU board of directors.
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MUTEBILE BoU CHANGES: ENTER IGG MULYAGONJA
A month later, IGG Mulyagonja wrote to the board of directors telling them to ignore Mutebile’s new changes.
Mulyagonja described the changes as “impugned appointments and transfers”.
She wanted the changes halted “until such time as the investigation by the Inspectorate has been concluded or until this office directs otherwise”.
On March 19, Mutebile wrote to Mulyagonja, emphasizing his position in an earlier response dated March 6.
Mutebile the Central Bank “objects in the strongest terms your directive therein, stopping the board of directors from ratifying the actions and decisions taken by the Governor in relation to the appointments and transfers”
“We reiterate our previous position in our letter dated 6 March 2018, regarding the validity of the appointments but we must add that the Inspectorate does not have the mandate to give direction to the Bank of Uganda.”
WHAT THE LAW SAYS ON IGG AND BoU
Mutebile hinges his response on Article 162 (2) of the Constitution which established BoU.
The governor, indeed, highlights this in his March 19 letter, in which he copies, among others, three-decade president Yoweri Museveni.
“In performing its functions, the Bank of Uganda shall conform to this Constitution but shall not be subject to the direction or control of any person or authority.”
Mulyagonja tactfully pokes holes in this article.
She seems to suggest that BoU is hiding under the provision to avoid acting in good faith, and as a cover to flout “law, relevant regulations and policies and the principles of natural justice”.
But Mutebile further responds.
- The Article in question is clear, unequivocal and unambiguous on the independence of the Bank of Uganda
- And the fact that Bank of Uganda is not subject to the direction or control of any person or authority
- And therefore no outsider, including your office can interfere with the decisions of the Bank of Uganda.
The governor further justifies the independence of the central bank.
- The raison d’etre of the Independence is not difficult to fathom.
- The purpose is to ensure that the Bank of Uganda is credible, decisive and to ensure macroeconomic stability and confidence in the market.
- This can only be achieved if the Bank of Uganda is free from external influence, direction or control.
- Your impugned directive to the Board not to ratify the Governor’s decisions, if implemented would have a catastrophic effect on the financial sector of Uganda and the economy at large.