Mutebile wants full BOU independence
May 09, 2003
BANK of Uganda (BOU) Governor Emmanuel Tumusiime Mutebile is seeking more independence and constitutional protection against political interference in the central bank
By Alfred Wasike
BANK of Uganda (BOU) Governor Emmanuel Tumusiime Mutebile is seeking more independence and constitutional protection against political interference in the central bank.
Mutebile said this would enhance the bank’s cardinal role as an effective agent of restraint on government fiscal policy.
He said until 1989, only three central banks in the world, the USA’s Federal Reserve Bank, Germany’s Bundesbunk and Switzerland’s Swiss National Bank, had “pure central bank independence†but that since 1990, there have been profound changes in central banking legislation.
Appearing before the Constitutional Review Commission (CRC), Mutebile called for an amendment to the BOU Statute to allow the governor report to Parliament twice a year to enhance accountability.
The BOU is required to issue one report a year.
“Article 162(2) of the Constitution provides that ‘the BOU shall conform to this Constitution but shall not be subjected to the direction or control of any person or authority’, but we have had problems with MPs arising out of their misconception that BOU’s independence means lack of accountability,†he said.
He denied receiving any directive from President Yoweri Museveni or “any other powers that be†to bail out businessman Hassan Bassajjalaba from his financial woes.
“I have not had any political interference on that matter. I have not heard about any directive from either President Museveni or any other powers that be,†he said.
“Although independent central banks are free to regulate and implement monetary policy...to guarantee monetary stability and to ensure a sound financial system, all central banks remain constrained by their statutory objectives,†he added.
BANK of Uganda (BOU) Governor Emmanuel Tumusiime Mutebile is seeking more independence and constitutional protection against political interference in the central bank.
Mutebile said this would enhance the bank’s cardinal role as an effective agent of restraint on government fiscal policy.
He said until 1989, only three central banks in the world, the USA’s Federal Reserve Bank, Germany’s Bundesbunk and Switzerland’s Swiss National Bank, had “pure central bank independence†but that since 1990, there have been profound changes in central banking legislation.
Appearing before the Constitutional Review Commission (CRC), Mutebile called for an amendment to the BOU Statute to allow the governor report to Parliament twice a year to enhance accountability.
The BOU is required to issue one report a year.
“Article 162(2) of the Constitution provides that ‘the BOU shall conform to this Constitution but shall not be subjected to the direction or control of any person or authority’, but we have had problems with MPs arising out of their misconception that BOU’s independence means lack of accountability,†he said.
He denied receiving any directive from President Yoweri Museveni or “any other powers that be†to bail out businessman Hassan Bassajjalaba from his financial woes.
“I have not had any political interference on that matter. I have not heard about any directive from either President Museveni or any other powers that be,†he said.
“Although independent central banks are free to regulate and implement monetary policy...to guarantee monetary stability and to ensure a sound financial system, all central banks remain constrained by their statutory objectives,†he added.