Kampala – The Bank of Uganda Amendment Bill 2019 that is set to trim the Powers of the Governor and separating the fusion between the Bank of Uganda management from the board of directors has been confirmed ready.
Notably, the Igara East County Member of Parliament, Michael Mawanda tabled the proposal to end the union between the Bank of Uganda Board and management led by the Governor.
Micheal Mawanda was granted leave in August 2019 by the speaker of Parliament Alitwara Kadaga to work on the BoU amendment bill 2019 of which he will introduce to BoU board.
However, Micheal Mawanda kept requesting for additional time to table the bill and it was never introduced to parliament. Mawanda defended the time extension saying he is considering various laws which have strengthened governance of central banks.
Notably, MP Mawanda yesterday confirmed that the bill is ready to be tabled.
“They granted me an extension, and I am ready, we actually thought if this COVID disease had not come, after the budget, these are some of the bills we were going to consider but for me I am ready”. Mawanda portrayed on NBS Television last night April 13,
The proposed amendments came in the wake of scandals that rocked the central bank recently leading to a probe by the Committee on Commissions, Statutory Authorities and State Enterprise (COSASE) in the sale of several commercial banks.
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.
The bill seeks to amend the constitution fallowing the parliament resolutions seeking to remove the governor and deputy governor from being the chairperson and deputy chairperson respectively of the board of directors of the central bank.
“We would like the separation of powers between the governor central bank and the chairperson board such that the chairman board can independently supervise the governor who will carrying out the day to day running of the central bank” Mawanda said.
Mawanda further noted that the bill help to solve all the impasses that have been happening in the bank from the sale of the defunct private banks, infighting among others. For now the board of Governors is reliant on each other and this brings out issues of accountability.
Before the bill 2019, the Board of Directors of Bank of Uganda (BoU) blamed the difficulties faced by the Central Bank on gaps in the Constitution.
Article 161 (2) of the Constitution vests the authority of the Central Bank on the Board. According to the law, the Chairperson of the Board is the Governor while the Vice Chairperson is the Deputy Governor.
The directors of the Central Bank however, said that there is need to separate the role of the board Chairperson from that of management.
The proposal was made while the Board together with the Minister of Finance, Planning and Economic Development, Hon Matia Kasaija, the Governor BoU and other officials appeared before the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on Friday, 08 January 2019.
One of the Board members, Polycarp Kahooza warned that unless the roles are separated, BoU will continue having difficulties.
MPs, however, blamed the board for failing to perform and instead delegated its duties to the Governor.