Michael Maranga Mawanda, the Igara County East MP has been granted leave of Parliament to introduce the Bank of Uganda Amendment Bill 2019.
This bill follows a recommendation from the COSASE report calling on government to establish an independent board of directors of the central bank.
It seeks to amend the Constitution following a resolution by Parliament on 28th February 2019 which sought to remove the Governor and the Deputy Governor from being chairperson and Deputy Chairperson respectively of the board of directors of the Central Bank.
“We have had problems of accountability where a budget is made by top management headed by the Governor and approved by the board headed by the Governor. If there is a mistake that is made by management and carried by the board, which is headed by the same person, we shall not be able to rectify this problem,” said Mawanda.
Mawanda added, “currently, there is no ‘second eye’ in Bank of Uganda. This is the reason we are seeking separation of powers where the Governor becomes the chief executive then an independent person is appointed to head the board which can oversee the operations of Bank of Uganda.”
The bill seeks to separate the fusion between the Bank of Uganda (BoU) management from the board of directors.
It also seeks to provide for the functions of the Governor and to provide for the Governor as the Chief Executive Officer of the Central Bank and to provide for the resignation of a member of the board.
Elijah Okupa (FDC, Kasilo County) said that in countries such as Kenya and South Africa where the governor is separate from the board, the central bank runs smoothly.
Bob Okodi, Amref Health Africa Uganda CFO, On Purpose-Driven Finance and Measuring Impact in Lives, Not MarginsRecalling what he termed as trouble in Bank of Uganda, David Abala (NRM, Ngora County) also called for separation of the decision making function from administration.
“You cannot fuse administration with policy making; we know the trouble we saw in Bank of Uganda investigations; this bill is the medicine that will heal what we saw during investigations,” said Abala.
Jonathan Odur the Erute South MP who seconded the proposal says indeed the powers of the Governor and Deputy Governor needs to be checked.
Odur requested the house to allow Mawanda work on the bill because the Government has been slow.
David Abala, the Ngora County MP says there must be separation of Power, and the administration and policymaking cannot be fused together. Abala supported the move saying it will bring sanity to the Central bank.
The plenary chaired by Speaker Rebecca Kadaga approved the motion granting Mawanda leave of Parliament to proceed with the bill. Mawanda will now go-ahead to prepare the bill and present a certificate of financial implication.
According to the Bank of Uganda Act, the Central Bank Governor who is also the most senior officer in the bank also chairs the board of directors and is deputized by the Deputy Governor. The other members are the Secretary to the Treasury and directors from different departments in the bank.