By our reporters

The governor of Bank of Uganda has read the inspector general of government a riot act, rejecting her directive that staff changes at the Central Bank be not effected pending investigations of “bad faith” on the governor’s part.

Following the IGG’s directive the bank was thrown into confusion after the chain of command broke down since middle  and junior officers did not know from whom to take orders.

Now Governor Emmanuel Tumusiime Mutebile has moved to put his feet down to protect the bank from outside interference and reassure the financial sector that business at the bank is back to nomalcy.

Governor Mutebile responded to Justice Irene Mulyagonja that she should stay in her lane and let BoU carryout it’s mandate as per the law.

Mr Mutebile’s strongly worded letter dated March 19, 2018 addressed to the person of The Hon Lady Justice Irene Mulyagonja Kakooza states that the IGG’s instructions were unlawful, ill-informed and even disruptive to the financial sector.

“We have reviewed the contents of the above said communication and now write in the strongest terms to your directive therein, stopping the Board of Directors from ratifying the actions and decisions taken by the governor in relation to the appointments and transfers ‘until such time as investigations by the inspectorate has been concluded or until this office directs otherwise’.”

Mutebile reminds the IGG the law, citing Article 162 (2) stating 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 governor also cited other ground breaking court cases including Bank of Uganda v Cowe, Civil Appeal No.35 of 2007 where the court of Appeal upheld the independence of of the Central Bank; MC 303 of 2013 Patricia Ojangole &4 others Vs Attorney General which challenged the IGG’s powers to issue directives on staff matters to Board of directors. Mutebile concluded saying the IGG had no powers to direct the BoU board of directors “on how they should exercise their discretionary powers.”

Where the IGG says the governor acted in “bad faith” Mutebile challenges her saying she was already biased, since she has a position on the matters at hand. And adds, that the IGG has instead injured the reputation of the central bank with “irrational” directive which he says was against the “bank’s and public interest”.

Background
The Bank of Uganda is at crossroads following staff changed which affected among others the director of supervision, a key position in the monitoring the banking sector in the country. However the former director Ms Justine Bagyenda refused to vacate her office, instead joining with colleagues to run to the IGG for protection. The IGG wrote to BoU quashing the appointments and transfers pending investigations, which the governor has rejected. He wants the staff movements to be effected in order to protect the bank from outside intrusion of its functions.

Mutebile says the staff changes will go on as planned as per the mandate of the BoU.

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