Museveni rejects move to halt BoU investigation
Accountability. Former BoU executive director for supervision Justine Bagyenda and Mr Benedict Ssekabira, the director of Financial Markets Development Coordination, appear before the parliamentary committee yesterday. Photo by Alex Esagala
What you need to know:
- Committee chairman Abdu Katuntu said the country has tough choices; either to keep a blind eye on the irregularities at BoU until they get into a full blown crisis or allow the inquiry to expose and fix them before it is too late.
- President Museveni revealed that BoU officials had lied to him about the financial status of the closed banks and gave the green light for the committee to proceed.
Kampala. President Museveni on Monday rejected attempts by Cabinet to halt the ongoing parliamentary probe into the operations of Bank of Uganda (BoU) and the circumstances that prompted the bank to close seven commercial banks amid concerns that bank officials flouted laws.
Sources familiar with proceedings from the Cabinet meeting at State House Entebbe say Finance minister Matia Kasaija tabled a motion calling for Cabinet to halt the inquiry.
Mr Kasaija reportedly argued that the probe may lead to capital flight while also scaring away potential Foreign Direct Investments (FDIs) with investors uncertain about the status of the central bank.
As an alternative to the inquiry, Mr Kasaija reportedly proposed that a meeting be convened between BoU, the Finance ministry and MPs on the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) to get to the bottom of all the issues relating to the central bank’s woes.
Mr Kasaija’s proposal was rejected by his colleagues, who insisted that the inquiry be allowed to proceed but with a caveat that the committee expedites it because the longer the probe drags on, the more the image of the central bank is tainted.
Only Government Chief Whip Ruth Nankabirwa reportedly supported the proposal.
President Museveni revealed that BoU officials had lied to him about the financial status of the closed banks and gave the green light for the committee to proceed.
Asked about his presentation in Cabinet, Mr Kasaija responded: “Who said that? Don’t waste my time. That is nonsense,” and quickly hung up.
Ms Nankabirwa admitted that Cabinet discussed the matter but said she did not move a motion to foil the investigations but only contributed to give clarification.
MPs heard that former BoU director for banks supervision Justine Bagyenda closed Global Trust Bank and sold it to dfcu in 2014 within a day without procurement guidelines.
Cosase’s take
Committee chairman Abdu Katuntu said the country has tough choices; either to keep a blind eye on the irregularities at BoU until they get into a full blown crisis or allow the inquiry to expose and fix them before it is too late. “Based on what has already transpired, Cabinet should be the first to let the processes go on. This country has one central bank, whatever happens to that bank hurts the economy. If there are challenges, they should be addressed,” Mr Katuntu said.
