Nearly a year later, President Museveni has failed to name a new central bank governor amid the current economic uncertainty and rapid inflation (PHOTO/Courtesy).
KAMPALA —Nearly a year later, a deceased’s governor’s signature remains alive on Uganda’s banknotes as the country eagerly awaits on President Museveni to name a new head of the central bank amid the current economic uncertainty and rapid inflation.
Prof Emmanuel Tumusiime-Mutebile who led the Central Bank for over 20 years, died in a Nairobi hospital at the start of the year. This means the Bank of Uganda has been without a permanent governor since then.
Dr Michael Atingi-Ego, the Bank of Uganda’s deputy governor since 2020, has led the central bank since Prof. Mutebile’s death.
The Deputy Governor has, however, reportedly failed to stamp his authority on the institution which ran under the late Prof. Mutebile, an economist with a no-holds-barred approach to handling the task and administrative functions of the Central Bank.
Some industry sources have claimed that the acting Governor, Dr. Atingi-Ego, lacks crowning abilities including personal courage and leadership skills to head the country’s economic revival from a thread of economic downturns including the Covid-19 tragedy.
Some blame the delay on the lack of a proper institutional transition plan.
Perez Godfrey Ahabwe, an economist, and former Minister of Local Government, noted the President’s delay in the appointment of a substantive Governor, a key embodiment figure to steer the central bank, is a bad signal to the monetary policy of Uganda.
Ahabwe explained that Mutebile was an outstanding economist under whose watch Uganda’s macroeconomic policies were laid down to streamline the management of money supply and interest rates to contain inflation, consumption, growth, and liquidity among others.
To Leonard Okello, a political scientist who doubles as the Executive Director of Uhuru Institute for Social Development, the delayed appointment of the Governor only exposes the cracks in the management of institutional transition in Uganda.
But Finance minister Matia Kasaija recently denied any speculations of a power and leadership vacuum at the central bank, noting that Dr. Atingi-Ego is doing “a fantastic job”
The prolonged delay also reflects the nature of President Museveni’s leadership tactics where technocratic concerns must compete with demands of loyalty to his administration.
Michael Mutyaba, a political researcher, says the President was struggling to find a candidate who was both politically loyal and capable of managing economic policy.
Other commentators urge that the president wants someone who is blindly loyal, but also competent.
Mutyaba also reasons that the vacancy was useful as a political tool.
“The president could try to reinforce loyalty among members party by holding out the possibility of leading the central bank,” he says.
President Museveni has “a habit of leaving government institutions without a head for a long time before appointing substantive official officials. Museveni once failed to name a permanent Inspector General of Government for five years.
Journalist Emmanuel Mutaizibwa suggested the central bank had become accustomed to working around Mutebile absences because the former governor had been ill for about five years before he died. The late governor had put in place “a competent workforce that continues to diligently perform its duties”. Mutaizibwa said.
Mutaizibwa said he believed that the president would choose a “substantive” figure as governor but would also seek “a cadre who can be relied upon by the executive”.
Daily Monitor recently listed several possible candidates for the governorship. They include the deputy governor, his predecessor Louis Kasakende, and Ezra Suruma, a deputy governor in the early 1990s.
The Covid-19 pandemic delivered a significant blow to the Ugandan economy.
Nevertheless, acting governor Atingi-Ego has overseen any major changes in monetary policy, including raising the lending rate by 250 basis points this year to try to tame inflation.
Consumer prices have been driven higher by soaring fuel and food costs that the government has blamed on the lingering after-effects of the COVID-19 pandemic and the war in Ukraine.
“The economy continues to face strong cost-push inflation pressures from the external environment, dry weather conditions, and exchange rate depreciation amidst weak domestic demand,” Dr. Atingi-Ego said.
The Bank of Uganda Act of 1966 stipulates that the Governor and Deputy Governor of the central bank shall be appointed by the President of Uganda with the consent of the Cabinet, and both shall be appointed for a period of five years and shall be eligible for reappointment.
However, the Act is silent on the period within which, in the event of death, the President can appoint the next Governor. For now, Ugandans will still have to wait for that to happen because only President has the ultimate answer.
A Central Bank Governor plays a key role in setting the monetary and regulatory policy, determining interest rates, maintaining price stability, controlling the national money supply and issuance and foreign exchange currency rates and gold reserves as well as overseeing and controlling the banking industry.
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