BoU staff changes: Mutebile fires back at IGG

Bank of Uganda Governor Mr Emmanuel Tumusiime-Mutebile

KAMPALA: 

The governor Bank of Uganda Emmanuel Tumusiime-Mutebile has rejected an order by the Inspector General of Government Irene Mulyagonja, to halt disputed staff changes he made in senior staff positions in February.

On February 7, Governor Mutebile made sweeping changes at Bank of Uganda, with the reshuffle affecting eight Executive Directors, 13 directors, 24 assistants/deputy directors and four staff.

Key among the reshuffles was the sacking of Ms Justine Bagyenda as the Executive Director for commercial banks supervision and replacing her with Dr Tumubweine Twinemanzi who joined from the Uganda Communications Commission (UCC).

Trouble, however, started when Ms Bagyenda refused to hand over office saying she had been illegally fired while aggrieved employees petitioned the IGG calling for a broad inquiry into Mr Mutebile’s management style at the bank.

The IGG responded by ordering that the changes be halted until investigations are concluded to determine whether they meet the minimum legal threshold.

But in a March 19 letter,Mr Mutebile hit back at Ms Mulyagonja,telling her that her “investigation is redundant” on grounds that her  “presumption of bad faith as a basis to take over the Board’s role presupposes[that she has]already formed an opinion”

 “Your presumption of bad faith as a basis to take over the Board’s role presupposes you have already formed an opinion which makes an investigation redundant. But more importantly, this presumption of bad faith undermines the Bank of Uganda’s reputational integrity,” Mr Mutebile wrote.

The Governor told the IGG that neither President Museveni nor Parliament have “ever so brazenly directed the Board of Directors or the Governor in the manner set out in your letter.”

In her March 12 letter, Ms Mulyagonja had argued that the “constitutional independence of the Bank with regard to the execution of its functions as laid out under Article 162 is only guaranteed where the Bank is deemed to be acting in good faith and in accordance with the law, relevant regulations and policies and the principles of natural justice.”

But Mr Mutebile rejected the IGG’s interpretation of the law, arguing that her previous attempt at directing the Board of the Uganda Development Bank, an institution lower than the Central Bank, had been rejected by court.

The staff changes that the IGG ordered to be halted will take effect, Mr Mutebile reiterated.

“We reiterate our previous position in our letter dated March 6 2018 regarding the validity of the appointments but we must add that the Inspectorate does not have the authority to give direction to Bank of Uganda,”Mr Mutebile wrote.

Bank of Uganda has been in the spotlight since October 2016 when it closed Crane Bank and subsequently sold it to DFC Bank with MPs warning that there are BoU officials who could have offended The Anti-Money Laundering Act.

The controversies at the central bank took a turn for the worse when Governor Tumusiime-Mutebile announced reshuffles in senior staff positions amid protests by employees who petitioned the IGG calling for an investigation.

A motion by MPs seeking to set up a select committee to investigate the operations of Bank of Uganda with particular interest in the circumstances that led to the closure of Greenland Bank, National Bank of Commerce and Crane Bank.

Auditor General John Muwanga will today submit to Parliament a forensic audit report into the alleged financial mess at BoU.

EXCERPTS:

“The raison detre of the independence [of BoU] is not difficult to fathom. The purpose is to ensure that that BoU is credible, decisive and to ensure macro-economic stability and confidence in the market. This can only be achieved if the BoU is free from external influence, direction or control.

This principle has been widely accepted and has been followed by all institutions of government in the recent past. Neither his Excellency nor the Parliament of Uganda have ever so brazenly directed the Board of Directors or the Governor in the manner set out in your letter