BoU seeks more time on proposed constitutional amendments

Kampala, Uganda | THE INDEPENDENT |  The Deputy Governor Bank of Uganda (BoU), Michael Atingi-Ego has asked parliament for more time to present the institution’s opinion on the proposed amendments to Article 161 of the Constitution regarding the composition of the Central Bank’s board and others.

Atingi-Ego together with the BOU Legal Counsel Margaret Kaggwa Kasule had today appeared before the Legal and Parliamentary Affairs Committee to respond to the proposed Constitutional Amendment Bill, 2020 introduced by Igara East MP, Michael Mawanda.

The Bill before the Committee seeks to separate the fusion between the BoU management from the Board of Directors by proposing to remove the Governor and the Deputy Governor from being Chairperson and Deputy Chairperson respectively of the board of directors of the Central Bank.

In his statement to the Committee last week, MP Mawanda argued that the Central Bank Board needs to be independent of the management so that it can carry out supervision without interference and conflict of interest.

“The Object of the Bill is to amend the Constitution of the Republic of Uganda following the passage of a Parliament Resolution on 28th February, 2019 to remove the Governor and Deputy Governor from being Chairperson and Deputy chairperson respectively from the board of directors of the Central Bank; to provide for the functions of the Governor and to provide for the Governor as the Chief Executive Officer of the Central Bank; to provide for the resignation of a member of the board,” a copy of the Bill reads in part.

Mawanda’s Bill also seeks to provide for the appointment of the Deputy Governor and limit the term of the Deputy Governor and the board members to only ten years. Currently, the Governor, his Deputy, and the board members hold office for a term of five years but are eligible for reappointment.

The proposed Bill follows a 2019 report by the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on the closure of seven commercial banks. The report recommended that the Bank of Uganda (BoU) Governor Emmanuel Tumusiime-Mutebile and his then deputy Dr. Louis Kasekende be sacked from the Central Bank’s Board of Directors if the institution is to run its operations efficiently in the future.

The committee then chaired by Bugweri County MP Abdu Katuntu argued that much as Article 161 (4) provides that the Governor and Deputy Governor shall be Chairperson and Vice-Chairperson respectively, good governance principles would require that the position of the Chairperson and Vice-Chairperson of the board is separated from the position of the governor and his deputy.

Interfacing with the Deputy Governor Atingi-Ego today, Katuntu said that the issue under discussion was a public matter and that the Central Bank needed to address itself to both the legal regimes that govern the Central Bank including the Constitution and the BoU Act.

According to Katuntu, the BoU Act should have been amended immediately after the Constitution came into effect in 1995 so that the current contractions between the two legal regimes do not surface.

Jacob Oboth, the Legal and Parliamentary Affairs Committee Chairperson gave BoU officials up to Tuesday next week to present their position on the Bill.

His committee is this week also set to interface with the Uganda Bankers Association, Minister of Finance and the Minister of Justice on the same Bill.

********

URN