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MPs to move bill to trim Central Bank powers

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Forum for Democratic Change (FDC) MP, Paul Mwiru (Jinja Municipality East) one of the MPs threatening to move a private members bill to streamline governance at the Central Bank

Two members of Parliament are in the process of drafting a private member’s bill seeking to amend the Bank of Uganda Act so as to streamline governance at the central Bank.

Michael Mawanda (MP, Igara East) and Paul Mwiru (MP, Jinja Municipality East) say the failure by government to act on the report of the Public Accounts Committee on Commissions, State Authorities and State Enterprises (PAC – COSASE) on seven defunct commercial banks prompted their move.

Following the damning PAC-COSASE report, Dr. Ruhakana Rugunda, the Prime Minister and leader of government business in the House, said Government would respond in 3 months.

“Giving us three months would really be good time to do a thorough job” Rugunda said at the time.

Hon. Mawanda, at the time said, “If in 90 days they (the executive) don’t bring the amendments, you will allow me to seek leave of parliament to table my private members bill in respect to amendments to BoU Act.”

Nearly four months have since passed without any action from government, prompting Hon. Mawanda to make good on his threat. 

BoU Governor and Deputy Governor, Prof Tumusiime Mutebile and Dr. Louis Kasekende attending the PAC-COSASE probe. The probe recommended that the offices of the Governor and Deputy Governor be unbundled from that of BoU board chair and deputy chair respectively.

According to a report by NTV, Uganda’s leading television station, the private members bill, to be known as Bank of Uganda Amendment Bill, seeks to amend the constitution and the Financial Institutions Act (2004) to among others, separate the office of Governor and his Deputy from that of the chairperson and vice chairperson of the BoU board respectively.

MPs on the PAC-COSASE probe, recommended amendment of Article 161 (4) of the Constitution that provides that the Governor and deputy Governor shall be Chairperson and Vice Chairperson of the Board respectively, arguing that the “objectivity of the Board and its independence from management may be strengthened by the separation of the role of the Chief Executive and Chair.”

COSASE also recommended that all the implicated officials in the now infamous bank closures be held liable and punished accordingly.

“The executive implements what the board tells it. If you are the chief executive (Governor), you cannot again be the chairman of the board to implement what you have already decided on in the board. We would like to see the board of the bank independent and management independent,” said Mawanda in an interview with NTV.

Hon Mwiru added that the central bank had abused its constitutional independence as shown by the PAC-COSASE probe, and therefore the said bill would seek to trip the central bank’s independence. 

“We had thought that by giving autonomy to the bank (BoU), we would achieve some degree of independence of the bank, but we have also not achieved that,” he said, adding that the planned bill, “also seeks to empower parliament to carry out an appropriation and oversight role on BoU as it is with other government institutions.”

“We have not been appropriating money to them (BoU) – they have been presenting their money to the board and as a result they would spend and consume their own reports,” Mwiru said, adding that this is the reason that BoU has previously snubbed Parliament attempts to hold them to account.

“It is through the power of the purse that you can force someone to account or improve on certain other issues,” Mwiru said.

Several experts and economists, have also previously called for sweeping reforms both in the governance and the mandate of the Central Bank.

The experts who include: Mr. Onegi Obel, an economist and capital markets expert, as well as economists and researchers Dr Fred Muhumuza and Dr Patrick Wakida, have called for a review of BoU’s independence, but also called for BoU mandate to be expanded from just monetary policy management to include jobs growth.

In an interview with NTV, acting Information minister, Dr. Chris Baryomunsi said that cabinet has considered the PAC-COSASE report and will be able to give a report on the progress so far in addressing the COSASE recommendations in the coming weeks. The calls to reform BoU come at a time when the Central Bank is embroiled in a currency transportation scandal, where some illegitimate cargo belonging to private business people found its way on a top-security cargo flight carrying currency notes.

Finance

Oil Money will not be for Consumption or even Salaries – President Museveni

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President Yoweri Museveni while speaking at the Uganda – Tanzania Business Forum

President Yoweri Museveni has echoed that Uganda’s cash from the oil resource will not be used for consumption or even salaries to civil servants.

The President made the remarks on Friday while addressing the business community attending a 3-day Uganda-Tanzania Business Forum 2019 at the Julius Nyerere International Convention Centre in Dar-es-Salaam, the Tanzanian capital. The First Lady and Minister of Education and Sports Hon. Janet Kataha Museveni was among other cabinet ministers and private sector officials at the forum.

“Under my leadership, the money from oil will not be used for consumption or salaries. Why? Because it is a resource that is exhaustible and finite. One day there will no longer be oil. That is why I insisted that money from these resources should only be used to create durable capacity for the Ugandan economy namely; build power dams, irrigation schemes, the railway, scientific innovations and some aspects of education,” he said.

The forum is the first of its kind and was the initiative of the partnership of Tanzanian Private Sector Foundation (TPSF) and the Private Sector Foundation of Uganda (PSFU). It aims at offering a platform for the business community to share experiences, explore investment opportunities across borders, create business to business networks, identify and discuss challenges in the presence of the Heads of State and Government Ministers and policy makers.

The forum also lays emphasis on issues relating to the steps that can be taken to address and overcome the bottlenecks to the thriving of the bilateral trade between Uganda and Tanzania. Earlier, President Museveni and his Tanzanian counterpart, John Pombe Magufuli were conducted on a guided tour of exhibition stalls in which Ugandan companies and government ministries including Uganda Airlines, Uganda Investment Authority, Uganda Railways Corporation, Kakira Sugar Works, Stanbic Bank, National Social Security Fund, NITA, UCC, Ugandan Petroleum sector, the Ministry of Energy, and the National Oil Company, among others, showcased what they offer.

President Museveni said he is interested in learning the conclusions of the forum on topics relating to the attractiveness of the 2 countries as destinations of investments, harmonisation of the strategies and partnerships in the emerging data economy, trade and infrastructure, reducing the cost of doing business between Uganda and Tanzania and the local content as a key to the unlocking of the long term value in extractive industries.

The President and his host concurred on the plan to enhance water transport from the Port of Mwanza in Tanzania to Port Bell in Uganda adding that railway transport between the two countries would go a long way in promoting sustainable trade and investment between the two countries. Mr. Museveni revealed that the East African governments are working aggressively on power saying that in Uganda today total power generation will soon be 2,000 megawatts which will ensure reliable power supply transmission and the lowering of power costs for manufacturers.

President Magufuli described the 1st business forum between Uganda and Tanzania as a historical occasion. He thanked the organizers for effecting the forum and President Museveni for honouring it with his presence. “The cooperation between Uganda and Tanzania has been in existence since time immemorial even before colonial time. The borders cannot separate us. We shall continue working together in development,” he said.

He stressed that it was important for the two countries to strengthen their cooperation in development drawing on the potential of their own natural resources in the sectors of agriculture, tourism and manufacturing. President Magufuli revealed that to ensure faster movement of people and goods between Uganda and Tanzania, his government is going to institute only two checkpoints from Dar-es-Salaam to the Ugandan border.

President Magufuli added that measures are underway to ensure that goods move freely in the EAC region with a view to increasing trade and investment. “The room for investment is very wide for Uganda and Tanzania business sector. This bilateral forum should be promoted for our people in business. Let’s agree and do business and stop lagging behind in development,” he added.

The Tanzanian leader disclosed that President Museveni and himself took the decision and agreed to the building of an oil pipeline from Hoima to Tanga, one of the longest pipelines in the world, as a sign of commitment between the two countries. During the Forum, the two leaders witnessed the signing of a number of Memoranda of Understanding between Uganda and Tanzania in the fields of Agriculture, Foreign Affairs and Migration. President Magufuli also hosted President Museveni and First Lady Janet Museveni to a luncheon at State House, Dar-es-Salaam.

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MP Munyagwa Denies Bribery Allegations As Pressure Mounts On Him Over His Meeting With KCCA ED, Eng. Kitaka

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“Currently, COSASE is seeking the dismissal of Mr Moses Atwine, whose recruitment as KCCA Director Physical Planning, has been termed as “unlawful” because he does not have the requisite qualification for the job.”

On Monday, photos of MP Munyagwa and Eng Kitaka went viral on social media platforms with reports saying the two discussed how to strike a compromise on the on-going probe into KCCA staff appointments by the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE).

MP Munyagwa in a private meeting with KCCA Acting ED Andrew Kitaka

Kawempe South Member of Parliament, Mubarak Munyagwa has since confirmed meeting Eng Andrew Kitaka, the acting Executive Director of Kampala Capital City Authority (KCCA) but refuted claims that their conversation was rotates around the ongoing probe into the authority. The MP currently chairs COSASE.

On Tuesday, Munyagwa told journalists at Parliament that the meeting captured on a CCTV camera at the Silver City Restaurant, Garden City, was not pre-planned because he was “only going to the gym when he encountered Eng Kitaka.

“I met with Kitaka nine days ago. The problem I have with Kitaka is the delay by the contractor to clear the Lubigi Drainage channel. This was not a secret meeting as some media houses are insinuating. How could I have a secret meeting at a balcony of a restaurant in broad day light?” Munyagwa said.

Currently, COSASE is seeking the dismissal of Mr Moses Atwine, whose recruitment as KCCA Director Physical Planning, has been termed as “unlawful” because he does not have the requisite qualification for the job.

Munyagwa says that despite KCCA spending Shs21 billion on the channel, several area of Kawempe South especially Bwaise, floods every time it rains, hence a need for KCCA to fix the problem.

Asked whether, their conversation did not touch issues of Atwine, Munyagwa said that  that Eng Kitaka tried to raise it but it was not necessary because the director (Atwine)“must leave office.”

“Kitaka tried to tell me to let the status quo remain but I told him no. I only want my drainage channel. There is no bribe I can solicit from Kitaba because he has nothing. I failed to cooperate with Jennifer Musisi, former KCCA Executive Director who had authority, why should I go with Kitaka who is also looking for survival?” Munyagwa added.

The COSASE chairman who says he is set to write to the Public Service Commission to terminate Atwine’s contract, alleges that it is the same director or his cohorts who might be playing the blackmail card against his integrity.

He insists that Atwine must leave KCCA because he never studied Physical Planning yet city dwellers must be assured of the quality of structures being constructed.

 Munyagwa said some people are trying to blackmail him by accusing him of “witch-hunting” people from other tribes.

He vowed to resign his position as COSASE chairman if any accounting officer of a government agency or department adduces evidence where he is soliciting a bribe.

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Finance

MP Mawanda Secures Leave to Introduce BOU Amendment Bill Aimed at Reducing Mutebile, Kasekende Powers

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BOU Governor Prof. Emmanuel Mutebile(L) and his Deputy Dr. Louis Kasekende(R)

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.

Micheal Mawanda Maranga, Igara East MP

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.

Recalling 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.

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