Fixing Bank of Uganda

Museveni meets Mutebile

Behind the scenes efforts to save Kasekende, Mutebile

Kampala, Uganda | HAGGAI MATSIKO | What would you say if you saw President Yoweri Museveni and embattled Bank of Uganda Governor Tumusiime Mutebile in a meeting at this time? What if that meeting, which in fact happened last week, stretched over two consecutive days?

Would you believe sources at State house who are familiar with the issue but are not authorised to comment on it confirming that Museveni in fact met Mutebile twice on two separate days last week at State House but insisting that the meeting had nothing to do with controversy at the crisis-plagued central bank?

“They met over other things,” one source told The Independent, “and it is normal for the Governor to meet the president anytime.”

But these are not normal times at the central bank and speculation has mounted that Museveni is now ready to move to fix things at the central bank.

Around the same time, on Nov.05, a group of people dumped piglets at Bank of Uganda premises draped in placards with the pictures of Mutebile and Juma Kisaame, the managing director of DFCU bank which BoU hand-picked to acquire assets of the defunct Crane Bank.

The take-over and sale to DFCU of Crane Bank assets has since become toxic and drawn public criticism, with suits and countersuits in the courts.

The raging bad reputation even casts suspicion on the recent announcement that Juma Kisaame, the managing director of DFCU bank which BoU hand-picked to acquire assets of the defunct Crane Bank, is quitting.

Kisaame’s quitting has been interpreted by some as a bid to jump ship.

It follows a decision by CDC Group, a UK-based development finance institution, in June to dispose of some of its shareholding in DFCU bank.

The CDC was second biggest shareholder of DFCU at the time of BoU-DFCU deal over Crane Bank. It was, therefore, a beneficiary of the sharp rise in assets of DFCU which, some analysts say DFCU acquired for a song. The CDC decision to sell its shares when DFCU was going through a great run also blighted claims made that the bank’s prospects were bright.

And given the crisis surrounding BoU, the dumping of piglets was seen as a form of protest against the BoU leadership over their handling of the financial sector.

In the past, piglets painted in yellow colour—the colour of the ruling party NRM—and tagged with names of certain legislators, have been dumped at parliament to protest against unpopular actions and decisions by legislators belonging to the ruling party.

For some, the dumping of pigs at BoU is seen as the lowest moment over the last two years it has been in the headlines over one controversy after another. For others, the pigs could have been the handiwork of those fighting BoU officials.

Golden parachute for Mutebile

Whatever the case, in the eyes of the public, the move has been seen as another in a series of attacks against the reputation of the BoU leadership. It is against this background that reports emerged President Museveni had encouraged Mutebile to step down.

One line suggests that Museveni is exploring ways of giving a golden parachute to Mutebile; a once highly respected central bank who might not have time left to redeem his image at the floundering central bank. Museveni, it is said, might ask 69-year old Mutebile who in 2016 started his fourth five year term as Bank of Uganda boss to step down before expiry of his term.

Timing of the Museveni – Mutebile meeting is behind the speculation. The meeting happened following reports that one of the BoU board members had suggested that both Mutebile and his deputy Louis Kasekende be removed from their positions. It is alleged that some members of the BoU board of directors made the suggestion to a committee appointed by President Museveni in March to quietly investigate affairs at the central bank.

The special committee led by Bugweri County MP Abdu Katuntu comprises of IGG Mulyagonja, some other members of COSASE who include Katuntu’s deputy Anita Among, Mbarara Municipality MP Michael Tusiime, and some BoU board members.

The committee completed its report last month and handed it to Museveni. This investigation had taken the pressure off both BoU and Museveni given that it was being carried out behind closed doors.

In their draft report, insiders say, the Katuntu committee recommended that; among others, some senior officials at the bank be relieved of their jobs. It is not clear whether Kasekende and Mutebile are among these officials.

But Katuntu is also the head of the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (COSASE) which has since switched gears to investigate Mutebile’s running of the central bank. The COSASE intervention followed a petition by aggrieved BoU staff following squabbles over staff changes Mutebile made on Feb.08.

On March 27, 2017, for instance, while meeting officials from BoU, some legislators and IGG Mulyagonja at State House Nakasero, Museveni told them to keep BoU issues out of the press–a pointer that he was getting concerned about the implications of the bad press surrounding the bank.

At the time, Mulyagonja had appeared on radio and was quoted severally in newspapers criticising Mutebile for frustrating her efforts to investigate claims by whistleblower that Mutebile’s February 2017 reshuffle was among others driven by tribalism.

Now COSASE is focusing on BoU’s closure of seven banks. In its first sittings on the issue, the committee kicked Mutebile, Kasekende, and their team out of parliament after they appeared without some critical documents.

Apart from this, the Inspector General of Government (IGG) is now also looking into the source of wealth of top BoU officials amidst allegations of corruption, insider trading, and abuse of office.

The Independent has already reported how one of Museveni’s influential handlers met Mutebile’s deputy Kasekende and asked him and his boss to retire.