Bank of Uganda (BoU) Governor Emmanuel Tumusiime-Mutebile has trashed and rejected the Inspector General of Government (IGG)’s directive to the Board of Directors of the Central Bank not to endorse recent staff appointments and transfers.
Lady Justice Irene Mulyagonja Kakooza, the IGG had in letters dated February 23, 2018 and March 12, 2018 written to the BoU’s Board of Directors stopping them from ratifying the actions and decisions taken by the Governor in relation to the appointments and transfers “until such time as the investigation by the inspectorate has concluded or until this office directs otherwise.”
Recent appointments and transfers saw Justine Bagyenda, the then Executive Director in charge of Supervision fired even when her retirement was scheduled for June this year.
However, in a letter dated March 19, 2018 obtained by Business Focus, defiant Mutebile objects “in strongest terms” to the IGG’s directive, revealing that it is unconstitutional and illegal.
“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,” Mutebile tells off the IGG in the letter.
In justifying his position, Mutebile quotes Article 162 (2) of the Constitution which provides that “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.”
The letter which is also copied to the President, Speaker of the Parliament of Uganda, Minister of Finance, Attorney General, Auditor General, Internal Auditor General, All Members of Board (BoU) and Board Secretary, BoU adds that: “…therefore no outsider, including your office can interfere with the decisions of the Bank of Uganda.”
It adds: “Your assertion that the independence of the Bank of Uganda as established under Article 162 of the Constitution 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 is incorrect as it purports to read new provisions in a clear constitutional provision.”
Mutebile says Mulyagonja’s ‘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.”
He adds that the purpose of BoU’s Independence is to ensure that it is “credible, decisive and to ensure macro-economic stability and confidence in the market.”
This can only be achieved if the Bank of Uganda is free from external influence, direction or control, Mutebile argues in a tough-worded letter.
“Neither His Excellency, the President 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. Even the Judiciary has been very careful to protect the Independence of the Bank of Uganda,” a tough Mutebile further blasts the IGG.
He gave an example of a case; Bank of Uganda V COWE, Civil Appeal No.35 of 2007 in which the “Court of Appeal upheld the Independence of the Bank of Uganda in accordance with the Constitution.”
“We wish to point out that we are fully cognizant of your powers but we are aware that those powers have been subject to judicial interpretation,” Mutebile ‘lectures’ Mulyagonja.
He further reminded her of another case; Livecot Impex Lid & Another vs Attorney General MC 173 of 2010 in which the High Court reviewed the directives the IGG had made to the Uganda Land Commission.
“It is worth noting that the Uganda Land Commission does not have the same constitutional independence and protection as the Bank of Uganda,” Mutebile argues.
He adds: “We further remind your Lordship that you previously attempted to interfere with the decisions of the Board of the Uganda Development Bank. Your ability to issue directives on staff matters to a Board of Directors was extensively reviewed by the High Court in MC 303 of 2013, Patricia Ojangole & 4 others vs Attorney General. It is worth noting that the Uganda Development Bank is not a constitutionally established entity and does not enjoy the independence extended to the Bank of Uganda and yet that Board was protected from your interference by Court.”
Mutebile reveals that by writing to the IGG in their letter dated March 6, 2018, the Central Bank was trying to clarify their position and bring to the IGG’s office to speed with BoU’s internal procedures regarding recruitment.
“It was no way meant to subject the Bank of Uganda to your office’s control because that would be unconstitutional,” he says, adding: “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.”
‘Only God Can Sack Mutebile’
When MPs called for Mutebile’s resignation in 2012 over his role in the inflated compensation of businessman Hassan Basajjabalaba for loss of city property, the Governor said the “rumblings” in Parliament wouldn’t hurt him because he knew he would remain at the helm of the Central Bank that he had been running for 11 years.
“I can assure you that I am here for the long haul. There is nothing that will take me out of this seat…except God,” Mutebile told journalists at a press briefing held at the BoU head offices in Kampala.