The Independent Uganda: You get the Truth we Pay the Price
In an interview with Monitor in July, when asked who was criminally culpable for what went wrong with Crane Bank, Mutebile replied: “Ask the Executive Director for Supervision”.
On top of this, Mutebile and his more hands-on deputy governor Kasekende, are said not to be on the best of terms. Kasekende was reportedly lured from the African Development Bank in 2010 with a promise that he would replace Mutebile when the latter’s contract expired in 2015. It didn’t happen and informed sources say Kasekende was “crashed”.
Meanwhile, Mutebile cannot be expected to be happy that Kasekende is effectively waiting for his job. Insiders say this has affected top-level decision making at BoU with a toll on the bank and its leaders’ reliability.
But while speaking during the 7th annual international leadership organized by Makerere University Business School on Nov.29, Kasekende said that BoU has performed well at regulating commercial banks by preventing major depositors’ financial loss and keeping the country from experiencing a systematic financial crisis.
It is not the first time BoU is courting controversy. In 2011, Mutebile faced calls for resignation after testifying before Parliament’s Adhoc Committee investigating the management of Uganda’s oil sector that President Yoweri Museveni directed him to draw an unbudgeted US$750 million from the Treasury to buy Russian fighter jets in the midst of an inflationary economy. Mutebile shocked many when he said that he had no record of the transaction.
Mutebile’s tenure at the bank has almost single-handedly built the fortunes of city businessman Hassan Basajjabalaba. Between 2005 and 2011 more than Shs300 billion was allocated to the tycoon from the Treasury to pay debts, taxes and subsidise his Kampala International University. Accountant General Gustavo Bwoch also faulted BOU for releasing US$1.7 million to a shoddy company for bicycles never delivered, without requisite approval.
These scandals have seen Mutebile, an economist once praised for steering Uganda’s economic stability from the doldrums of the 1980s, turn into a subject of ridicule, branded as a regime lackey, and called to resign.
This is a far cry from 2004 when Sebastian Mallaby, in his book ‘The World’s Banker: A story of Failed States, Financial Crises, and the Wealth and Poverty of Nations’, described Mutebile as a “a hulking, hard-drinking hammer of a person, the chief architect of Uganda’s success story and the greatest contributor to Africa’s struggle against poverty in his generation.”
Profiling Mutebile alongside one of the World Bank’s most celebrated Presidents, James Wolfensohn, Mallaby devoted a whole chapter of the book to the governor, and treated him as a man of equal caliber to the book’s main subject, then World Bank President Wolfensohn.
Painting them as heroes, Mallaby argued that these were the no-nonsense men who drove economic recovery in poor countries by taking difficult and unpopular decisions, seeing the bigger picture others couldn’t, unwaveringly steering politicians and the public towards necessary (often painful) economic reforms.
Mallaby said because of Mutebile, by the end of 1986, President Museveni had yielded to the IMF and World Bank economic reform policies of structural adjustment, stabilization, liberalization and privatization – leading to one of the most dramatic transformations not only of an ailing economy, but also of the World Bank’s engagement with developing countries. Interest rates rose to about 50 percent, reducing inflation from over 240 to 3 percent, and scaling down public spending.
For steering Uganda’s transition to Africa’s success story, Mutebile (and Uganda) became a World Bank and IMF darling, a test-case of how well their market-led models could change the fortunes of faithful disciples.
Indeed, during his long illustrious career, Mutebile has fought Museveni, bankers and donors to introduce reforms and implement them in a bid to make Uganda’s economy a success. With slightly over two years left for his contract to expire, Mutebile needs to return the central bank to its former glory. It is a significant undertaking as it has major implications not just for BoU or Mutebile’s legacy, but for the economy in 2018.
