COMMENT: Parliament’s BoU snake-beating committee

The danger of hunters of personal gain forcing an indecisive executive to dance to their tune in the legislative gallery

COMMENT | Joseph Were | For some smart minds, the parliament probe into Bank of Uganda’s sale of seven commercial banks over 23-years from 1993 is the peak of absurdity.  That seeing the once invincible Governor Tumusiime Mutebile humbled before the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) but mumbling “I don’t remember” to every query, is a circus.  They say it is absurdly similar to Justice James Ogoola’s 1999 Judicial Commission of Inquiry into the closure of banks. Some even wish playwright Robert Serumaga was alive today to write a sequel to his absurdist 1974 play `Majangwa’.  It could depict the hopelessness of today.But all that is a mistake.

This COSASE is different and the many invisible forces around COSASE will be revealed when it is done with hanging BoU’s dirty laundry in parliament’s public square.  For now, it is enough to note Ogoola’s investigation was on whether the banks were rightly closed. COSASE’s target is the individuals who closed them. It is a subtle difference whose outcome might be as different as popping corn is from popping dynamite.

Secondly, although COSASE Chairman Abdu Katuntu likes to affectedly scratch his goatee and invoke a supercilious awareness of his responsibility, it is not clear to what extent he is in charge of this mission. That depends on how entrenched he is in the ranks of today’s puppet masters. It could also explain why some members of the 30-strong COSASE, like MedardSsegona, MbabaliMuyanja,Muhanga Margaret, Michael Tusiime, and others who are usually either quite informed or voluble are quiet.

Katuntuis in this position because he promotes himself as what is technically called a “sound” legislator; someone the public can trust to effectively dig into any dirty pile, and the government trusts to have enough sense not to expose too much stench. But is he a coopted outsider or a complicit insider?

Katuntu’s mission is clear; pin the BoU officials on the missing inventories of the assets and liabilities of the banks, how they mismanaged them and unscrupulously transferred some of them. The mission mirrors the seven TORs COSASE gave the Auditor General John Muwanga. It, therefore, does not matter whether BoU officials hide all documents and refuse to cooperate. This is a political inquisition not a forensic investigation.  And some people smiling and acting untouchable today might be licking dry lips tomorrow.

Significantly, earlier in March 2017, President YoweriMuseveni uncharacteristically handpicked Katuntu – an opposition stalwart, to head a secretive, non-official general investigation into the affairs of BoU. This committee reportedly handed Museveni its report in October.

So the executive, and Katuntu as its proxy, could be mistakenly floating on delusions of COSASE as anothergrand circus where a hot potato could be parked until it cools down but a new game has emerged; of using the committee to implicate, tarnish, and embarrass job holders at BoU.

The mission is to render tenures untenable, stymie some careers, and make some money. It is a bid to create a new order via a grand ruse erected on fascinating subterfuge. Seeing the executive is indecisive, the hope is that the public’s hue and cry will compel action.

Big business players, State House, the Buganda kingdom, the Catholic Church, and the ever lurking officials of the World Bank/IMF have a stake. It gets murkier when opposition stalwart NandalaMafabi and NRM’s Raphael Magyezi of Remove Age-limit Bill fame bat on the same side.

The probe is a consequence of the special audit into BoU’s closure of the banks that COSASE ordered the AG to undertake in a letter dated November 28, 2017.  But it is NandalaMafabiwho in July 2017 petitioned COSASE to launch it over alleged negligence and unethical conduct, collusion, and corruption by individuals. Mafabi’s move appeared well-orchestrated as it was seconded by Magyezi from across the aisle. Deputy Speaker Jacob Oulanyah appeared to haltit on August 1, 2017 following protests from MMAKS Advocates, the sharp-suit lawyers for BoUfrom the powerful Buganda kingdom. The Solicitor General Francis Atoke also weighed in on the blockers side. But the AG resurrected it in an April 23, 2018 letter to Speaker of Parliament Rebecca Kadagaand on May 10, 2018 got the go ahead.  This ping pong signals the high states game with COSACE as a tiny part.

Finally, heads will roll when COSASE is over. But does jail await some? And for parliament, it might become prudent for another committee to handle future BoU issues. For expertise, the Committee on National Economy might be considered.

The debate on central bank independence might also reawaken. In the past, some experts, including renowned banker and financial sector scholar Ezra Suruma have argued that problems such as seen at BoU today result from meddling by politicians and wrong policy directives from the IMF/World Bank. Suruma’s position is imputed from his views in his 2014 book `Advancing the Ugandan Economy:  A Personal Account’.

Others, like Mutebile, have argued for more power for BOU. In fact, the champion of this camp, Prof. PharesMutibwa, wrote a book; `Bank of Uganda (1966-2006); a Historical Perspective’ which was a centerpiece of activities when BoU marked 40 years. They pushed and got the Financial Institutions Act (2004) and later the FI (Amendments) Act of 2016.

Mutebile, an economic ultraliberal, even developed a mantra of commercial bank supervision. “Bank regulators cannot be a substitute for bad bank managers,” he often pipes.

But many note that by the time he was appointed in 2001, four of the banks under scrutiny today had been `neatly’ sold or closed.  So, for years, Mutebile opined that “in many  of  the failed  banks,  a  dominant  shareholder  or  group  of  shareholders  was  able  to  exert  undue  influence over  the  management  of  the  bank  which  resulted  in  abuses  such  as  pervasive  insider  lending.

And he even devised a four-point survival formula for commercial banks; including: Appointing skilled and competent board of directors, ensuring independence of management, managing risk, and ensuring independent audits.  The question is why the three bank closures under his tenure have caused such a stench. Could there be forces that Mutebile cannot handle beyond his theories?

Anyway, when the late Idi Amin’s Uganda was at its bleakest, Alex Mukulu started his Africa Social and International Theatre of the Absurd. Today he is quiet.  In the ensuing silence, smart minds might conclude that although the BoU probeappears pointless, it pointedly mirrors many current political contradictions.