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Uganda: Mutebile, central bank governor for 20 years, gets another term

By Musinguzi Blanshe
Posted on Thursday, 1 April 2021 20:33

Emmanuel Tumusiime-Mutebile (Facebook)

Emmanuel Tumusiime-Mutebile, Governor of the Bank of Uganda since 2001, has been reapproved by parliament for another five-year term. Seen as physically frail albeit mentally strong, many wonder what is really behind his reappointment.

When Mutebile turned up in Parliament on 12 March 2021 for vetting, his motorcade entered through a secluded gate and journalists were blocked from covering him.

With a walking stick in hand, the 71-year-old was supported by two aides as he made his way to the vetting room. According to Luttamaguzi Ssemakula, an opposition legislator on the vetting committee, the governor was ‘physically weak but mentally very strong.’

The governor, he said, answered all questions that legislators posed and when the room would go quiet for even half a minute, Mutebile would ask for more questions. But none came up. A governor since 2001, Mutebile was approved by parliament for another five-year term.

The governor’s health wasn’t a big issue during his vetting with some legislators saying they are not a health committee. However, Ssemakula says: “I tried to inquire why the president could not appoint someone new for that position given the status he is in, my colleagues told me as long as someone can serve, there is no way you can fight him.”

Teaching Museveni the basics of economic planning

Governors come and go, Ramathan Ggoobi, an economist says, but Mutebile is perhaps the longest serving governor in Africa and second to Romania’s Mugur Isarescu who has been in office since 1990.

His long stay is a subject of discussion in the context of Uganda having a legacy of leaders who serve in public office for a long time. Uganda’s President Yoweri Museveni and his coterie have been in power since 1986 when they seized power.

When legislators recommended his dismissal  in 2012, Mutebile told them “there is nothing that will take me out of this seat…except God.”

Mutebile has been central in crafting economic policies and implementing them. He served as secretary to the treasury from 1992 to 2001 when he was appointed governor. Ggoobi says Mutebile worked hard to convince the new regime to abandon the control model and fiscal indiscipline.

Ggoobi also says that Mutebile was instrumental in convincing the National Resistance Movement (NRM) to give the Bank of Uganda independence. “The central bank had been turned into a printing press for money. He strongly protected it from political pressure to print money,” he says.

Fred Muhumuza, an economist at Makerere University, says Mutebile taught Museveni the basics of economic planning and management. He says there were many decisions Museveni made during the liberalisation of his people in late 1980s and early 1990s; decision of which he possibly did not understand. “But because Mutebile had said this we will handle, this is fine, Museveni and his team accepted.”

Museveni and Mutebile’s enduring friendship

Museveni and Mutebile have cultivated a personal relationship which Muhumuza says should be underscored when discussing his long stay in power. “Even when everyone felt he would be sacked, Museveni would possibly consider his personality and the long friendship they have had,” he says.

Mutebile’s key contributions to Uganda’s economic development according to Muhumuza and Ggoobi include:

  • Crafting policies to control galloping inflation of 1980s. Uganda’s annual inflation was 143% in 1986. By 1995 it had gone down to 5%;
  • Lobbying for independence of the central bank during the 1995 constitution making process;
  • Lobbying for merging of the ministries of finance and planning in 1992 for synergy.

Flaunting bravado

Mutebile has always flaunted bravado as a governor who is firmly in charge and doesn’t give a second thought to those baying for his blood. When legislators recommended his dismissal in 2012, he told them “there is nothing that will take me out of this seat…except God.”

And in the 1990s, when he was secretary to the treasury, Mutebile told Museveni “over my dead body” when boldly rejecting some of the president’s ideas, Badru Bukenya and Sam Hickey recollect in a 2019 paper.

The central bank has leapt from one probe to another in recent years but the governor has firmly sailed through these investigations.

Mutebile rebuffed an order by a government investigations agency to halt staff dismissals and reshuffles in 2018.  Asserting the Central Bank’s autonomy, Mutebile labelled the inspector of government who was investigating him as ‘redundant.‘ Not even the president of parliament, he said, had given such ‘far-reaching’ directives.

Several senior bank officials were probed in 2019 when a chartered plane delivering 20 pallets of currency, printed in Germany, arrived with extra cargo that it wasn’t supposed to carry. There were claims that the plane also had extra money worth USh.90bn ($24.5m).

Legislators also probed the central bank in 2018 and 2019 over the handling of undercapitalised commercial banks that were first placed under its management and later sold. The most prominent one was Crane Bank, that the central bank took over in 2016 and later sold to another local bank.

Following that, legislators recommended that the governor be removed from his post as chairperson of the board of directors. They also sought to have the governor barred from making decisions and subsequently overseeing the board that was meant to scrutinise his decisions.

A constitution amendment bill to chip away some of the governor’s power is currently being discussed in parliament. Legislators have also proposed a two-term limit for the governor.

Bottom line

For now it appears nothing will keep Mutebile away from his longtime held position; much like his friend Museveni.

Ahead of his next term, economists say Mutebile should focus on:

  • Reigning in commercial banks to reduce interest rates. Commercial bank average lending rates averaged at 18.2% in January according to the central bank report released last month.
  • Getting the central bank out of disputes and probes that result into bad press.

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