Uganda’s Central Bank, the Bank of Uganda (BoU) headed by Prof. Emmanuel Tumusiime-Mutebile (pictured) as Governor has reported up to Shs2 trillion in losses for the past 15 years, Finance State Minister (Planning), David Bahati has said.
In a response to a Question for Oral Answer posed by MP Kenneth Lubogo (NRM, Bulamogi), Bahati said the Bank of Uganda posted only Shs40 billion in profits in 15 years, which was remitted to the Consolidated Fund Account as required by the Bank of Uganda Act.
MP Lubogo sought to know the “profits or losses BoU has made annually for the last 15 years; when was the last time BoU made profits?”
The Shs40 billion profits were registered in 2007, and since then, the Central Bank has been making losses.
MP Richard Othieno (NRM, West Budama North), who was holding forte for MP Lubogo, asked a supplementary question.
“Bank of Uganda trades in securities; the minister is talking of making losses; can the minister brief the country the circumstances under which the bank made the losses yet it trades in securities,” said Othieno.
Minister Bahati, however, said the bank made losses and nothing can be done about it. “The bank truly trades in securities but it invests in monetary policies that involves in making losses; these are the facts on the ground; we cannot do anything about it because a loss is a loss,” said Bahati.
Central banks worldwide invest in securities hoping to make profits to offset national revenue needs by beefing up the Consolidated Fund Account, but unpredictability and volatility of the securities market puts central banks at risk of always making losses.
The Central Bank of Kenya toyed with the Eurobond securities, which ended up badly, stirring a scandal that roped in key politicians.
Bank of Uganda’s securities misadventures are undocumented, and the Rules of Procedure governing questions for oral answers restricts further enquiries, making it difficult for MPs to interrogate the matter further.