The Independent Uganda: You get the Truth we Pay the Price
Mukitale adds that Sudhir was giving quick fixes to traders who the government had failed by not addressing the financing gaps.
“By selling treasury bills and bonds at an interest of 15 percent,” Mukitale said, “the government has been crowding out the private sector. Other banks are making money by lending to government. They are not lending to the private sector. Sudhir was the main lender to these local traders. His many branches were improving financial inclusion. DFCU is now closing those branches.”
He says these bad policies that have fovoured foreign banks at the expense of local banks are part of the problem.
“Where has Stanbic or Barclays invested in Uganda?” Mukitale wondered, “Which building have they built? Which country has survived with only foreign banks?”
“I blame government but I also blame BoU for failing to advise government,” he added.
Bossa also said, broadly, the current crisis at BoU is not with just the central bank’s problem.
“There has been a dumbing down of institutions in Uganda,” Bossa added, “The judiciary is not what it used to be. The legislature the same, even private institutions.”
This criticism is indicting for Mutebile, who at his vetting by Parliament’s Appointments Committee in 2012, pledged economic growth of 10 percent (now 5%), interest rates below 20 percent (still above 20%), more disciplined government spending, and reforms at the central bank. Economic growth is now at 4 percent, interest rates remain above 24 percent and the central bank is blamed for excessive spending.
Critics say while dealing with Crane Bank, BoU officials appeared to lose sight of the big picture and got carried away by personal beef with Sudhir.
For instance, The Independent understands that at the height of the fight, BoU had been working around the clock to have Sudhir prosecuted on criminal charges.
BoU working with the Attorney General, William Byaruhanga, had instructed the Director of Public Prosecutions and Police’s Criminal Investigations Directorate to pursue criminal charges against Sudhir. However, when President Museveni got wind of it, he called BoU, DPP and CID officials and directed that no criminal charges are preferred against Sudhir.
This was not the first time the president was urging BoU officials not to target Sudhir but to look at the big picture.
On July 6, President Museveni had chaired a meeting at State House intended to resolve the crisis between Sudhir and BoU officials.
Going into the meeting, Sudhir hoped the president would restrain BoU officials from suing him. On the other hand, BoU officials hoped the president would get Sudhir to submit to their demands or give them a nod to proceed with the suit.
The central bank had launched a suit against Sudhir who it also accused of breaching a March 20 agreement. The deal offered the tycoon immunity from prosecution as long as he paid BoU some $ 60 million to cover for the losses allegedly registered under Crane Bank.
In countering, Sudhir said he had met his end of the bargain as per that agreement by paying BoU some $8 million and giving them some 32 properties. But, he said, rather than also meet their end, BoU was now threatening to sue him.
“But isn’t your role to ensure a healthy financial sector and that businesses grow?” Museveni asked the BoU camp at some point, “So if that is your role, why don’t you find a way to resolve this?”
In response, BoU officials reiterated the fraud allegations against Sudhir like how he had allegedly extracted $80 million from the bank.
With all this, the president got frustrated and said that in Runyankore they say that when two parties fail to agree, they are left to fight.
He warned that if the matter wasn’t handled well, there would be consequences. He was possibly right. But now he has a mess to clean up.
Mutebile, Kasekende rivalry
At just 68, Governor Mutebile, is unfortunately not in the best health. He struggles to walk and his still brain-sharp no longer keeps pace with BoU operations, insiders say. Yet the institution he heads now needs incisive leadership the most.
When the New Year begins, it is not clear how Mutebile who will be beginning his 18th year as the central bank governor, will handle the controversies surrounding BoU.
Already the bank’s core leadership is increasingly being questioned. So far he has survived by passing the buck.
