Parliament has granted Igara County East MP, Micheal Mawanda, leave to introduce a private member’s bill that seeks to amend Article 161 of the Constitution to remove the Governor and Deputy Governor Bank of Uganda from serving as chairperson and deputy chairperson of the board of directors respectively.
According to the existing law, BoU Board is chaired by the Governor. Currently, Prof. Emmanuel Tumusiime-Mutebile is the BoU Governor and automatically Board Chairperson.
According to the Bank of Uganda act, the Central Bank Governor who is also the most senior officer in the bank also chairs the board of directors and deputized by the Deputy Governor (currently Dr. Louis Kasekende).
The other members are the Secretary to the Treasury and directors from different departments in the bank.
“We have had problems of accountability where a budget is made by top management headed by the Governor and approved by the board headed by the Governor. If there is a mistake that is made by management and carried by the board, which is headed by the same person, we shall not be able to rectify this problem,” said Mawanda.
Mawanda added, “currently, there is no ‘second eye’ in Bank of Uganda. This is the reason we are seeking separation of powers where the Governor becomes the chief executive then an independent person is appointed to head the board which can oversee the operations of Bank of Uganda”.
Mawanda explained that his bill follows a recommendation from the COSASE report calling on government to establish an independent board of directors of the central bank.
Elijah Okupa (FDC, Kasilo County) said that in countries such as Kenya and South Africa where the governor is separate from the board, the central bank runs smoothly.
Recalling what he termed as trouble in Bank of Uganda, Hon David Abala (NRM, Ngora County) also called for separation of the decision making function from administration.
“You cannot fuse administration with policy making; we know the trouble we saw in Bank of Uganda investigations; this bill is the medicine that will heal what we saw during investigations,” said Abala.
Rwampara County MP, Charles Ngabirano, proposed that the bill should not only address issues at Bank of Uganda but other government entities in a similar situation.