Museveni Regrets Sale of UCB as Experts Hail Mutebile Legacy

President Yoweri Kaguta Museveni has hailed the brilliance of the late Bank of Uganda Governor, Emmanuel Tumusiime Mutebile despite making him commit some mistakes. 

President Museveni said that in determining the best way forward to revive the fortunes of the economy in the early years of the National Resistance Movement-NRM government, he usually took advice from Mutebile who was then a director at the Ministry of Finance and later permanent secretary. 

He says that he regrets the decision to privatise Uganda Commercial Bank-UCB on advice from the late Mutebile against the advice of Dr. Ezra Suruma, a former Managing Director of the bank. Museveni says that the experience he got after selling the bank to Standard Bank Group of South Africa, made him reject any demands that he privatizes other state-owned banks later. 

In his speech at the first Emmanuel Tumusiime-Mutebile Memorial Lecture in Kampala Friday, which coincided with his birthday, Museveni said the former BoU governor helped him turn around the economy, which had almost collapsed due to political instability. 

He revealed that policies like liberalizing the foreign exchange market, restructuring the ministry of finance, and strengthening the local currency were done on the advice of Mutebile and they indeed helped turn around the economy.

African banking experts also described the Late Mutebile as a principled economic manager, responsible for the way Uganda has managed to handle the economic crisis over the last two years. Bank of Uganda Deputy Governor, Michael Atingi-Ego asked the experts to speak after him, for their view of what Mutebile would have done in the current situation. This was in relation to the economic shocks that Uganda and all other countries have undergone since especially arising from the effects of the COVID-19 pandemic, the war in Eastern Europe, and the high global inflation rates. 

Dr. Atingi-Ego said Mutebile’s strong leadership and confidence when making decisions gave the staff at the central bank the confidence that they can rely on his principles and policies to steer the economy through the shocks. 

Two questions have been asked by people across the Ugandan public seeking to know why the President has not replaced Mutebile one year after his death or whether this has an effect on the Bank’s performance and if there is anything different that the former governor would have done in the wake of the current crises. 

According to analysts, Uganda’s refusal to reverse some policies like liberalization of interest rates, and subsidizing the costs of essential commodities, among others, have seen some African countries experience adverse negative impacts. 

Donald Kaberuka, a Rwandan Economist and former President of the African Development Bank, said by rejecting pressure on subsidies, the Bank of Uganda was going by the principle of short-term suffering to avoid long-term suffering and costly reforms in the future. 

In his keynote address, Abebe Aemro Selassie, the Director Africa Officer at the International Monetary Fund, said that Mutebile would most likely have done what Atingi-Ego is doing in controlling the macroeconomic challenges of the country. Selassie said, for example, the Bank has used the monetary policy well to stop inflation from rising far above 10 percent, which many developing countries especially in Africa failed to do.     

However, Selassie thinks that the government has a lot to do in the way of introducing reforms and investing more resources in the education sector, to ensure that learners compensate for what they lost during the two-year lockdown. He expressed concern at the decline in enrollment levels since the COVID-19 outbreak.

The 2022 Primary Leaving Examination results released earlier on Friday, showed that there was a sharp increase in the number of pupils who registered for the final exams but did not turn up. Selassie said learning losses have increased over the last two years and the government must address them. 

Central Bank of Kenya Governor, Patrick Njoroge on his part hailed Mutebile for his stand on the independence of a central bank, which ensured its credibility. He, however, noted that despite this, Mutebile understood issues of accountability to the government.

This was also reechoed by Dr. Kaberuka who noted that Mutebile’s resistance to pressure helped the bank uphold its independence and hold on to the economic reforms that the institution was leading in the country. 

According to Dr. Kaberuka, it would have been disastrous for the country to reverse the policies because of the current economic situation, urging the central banks to take it that it is more important today than before to strengthen their independence. 

Dr. Fred Muhumuza, an Economist and university lecturer hailed the late Mutebile for his assertiveness even in the face of his appointing authority, provided he was convinced of his decision. He said this should be a principal quality of the person who will be the next governor. 

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