Donor Influence, Kabale Politics, handwork cited
By Moses Kaketo
A combination of handwork, luck, and donor sway saw Prof. Emmanuel Tumusiime Mutebile (ETM) bounce back as Governor of all banks in Uganda. Prof. Mutebile has held this position for more than 15 years now. During this period, ETM has established himself as a man to reckon with. He has ensured price stability as well as balancing politics and the economy.
His contribution in inflation management, reforms in financial sector and financial capital markets cannot be ignored. For this, Prof. Mutebile stands out in the region and indeed, he has won several global awards. Below we give an account of his return as Governor, Central Bank to serve his fourth successive term.
Sometime in November last year, a team from the International Monetary Fund (IMF) visited Uganda for their periodical reviews. After their work, the team requested to meet President Museveni. In a meeting that took place in the countryside where the President was on the campaign trail, the visiting IMF staff asked the President whether he had found a replacement for Mutebile (Whose contract was about to expire-January 2016) and if so, who was he?
Typical of the president, he threw back the question to the visitors. ‘‘Who do you have in mind?’’
According to a source that was part of the meeting, the visiting team said Prof. Mutebile deserved another term and they gave their reasons.
‘‘Mutebile is hardworking, has accumulated vast experience and above all, he is open, something that has helped us (IMF) to give the necessary input where need arises.’’
The team added that ETM is an open man who criticises issues he thinks are inappropriate, including some proposals from You Mr. President.
A few years ago, ETM openly said he was ‘‘forced’’ to print more money towards the 2011 elections. He said he would never again print money not backed by production.
After the meeting with the visitors, President Museveni called for a meeting with ETM. During the lengthy meeting, the president asked Mutebile whether he was still interested in serving his motherland. As they say, the rest is history.
Inside sources say donors have much respect for Prof. Mutebile for his knowledge about the economy. According to analysts going past donor’s wishes would possibly have serious implications on the Ugandan economy.
The IMF and World Bank remain Uganda’s top funders and thus their actions mean a lot to the economy. For example, they can tighten terms and conditions for loans to the country. The two global financiers offer the best affordable loans and grants at four percent. These loans are spread over period over 40+ years. On the other hand, loans from other financiers like African Development Bank are normally short-term and carry relatively high interest rates.
The timing- the politics of Kabale
They say, some people are born lucky and Prof. Mutebile can best be described as one of those very few. Analysts say his contract as Governor, Central Bank expired at a ‘ ‘ wrong time ’’ when President Museveni and his long time buddy turned adversary-Amama Mbabazi is competing with him for the country’s top seat in the forthcoming presidential elections.
Sources say Presidential hopeful Amama Mbabazi and Prof. Mutebile are close friends (it is not bad to be friends) above all; the two come from the same place- Kabale. As such, if the President had not renewed Prof. Mutebile’s contract, the voters in Kabale would have misinterpreted his action and would probably pay him back in kind come February 2016.
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It is not surprising that when the president sacked Amama Mbabazi as prime Minster, he had to replace him with Hon. Ruhakana Rugunda who hails from the same area as Amama Mbabazi -perhaps to balance the equation. Uganda is one such African country where tribe and religion are inseparable from politics. You can only ignore them at your own risk.
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Aware of that, another alternative for the president would be to replace Prof. Mutebile with a man from Kabale with the same qualities as Prof. Mutebile-That was a very tricky one. All the names that were flying around as would be the next Governor, Bank of Uganda, where unfortunately coming from other regions of the country.
The aftermath of 2016 elections
Analysts have predicted tough times for the year 2016. According to analysts, the 2016 economic times can only be compared to that of 2011 when inflation hit 30 percent. Others say, it could even be worse than that of 2011.
Such times need more than just a governor, but someone with experience and record of accomplishment. Otherwise, there is no guesswork on the economy. Prof. Mutebile has set bar very high. A man who in 2013, was named Africa’s best Central Bank Governor Thanks for his leadership and economic policies that are spot on. That award did not come easy. In 2011, there was reportedly a lot of printing of money, not backed by production, which left the economy in fiasco, interest rates hit 30 percent, and banks suffered high bad loans. During this time, we saw the closure of a number of businesses while a host of Ugandans lost their properties. Nevertheless, thanks to Mutebile’s leadership, the economy recovered.
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With fears that the government may print more money to finance the 2016 elections, (A claim government has denied and Prof. Mutebile has also publicly said he will never again print money not backed by Production) you need Prof. Mutebile or a man like him to handle such hard times, just, in case.
Mutebile has set the bar for Governor, Bank of Uganda very high. His economic policies have been praised by all and sundry. The primary role of the Central Bank is to ensure price and economic stability, Mutebile has on a whole scored way above average on this including tough times of 2006 and 2011 when inflation went through the roof.
Analysts say, given ETM performance, the President decision would probably be different if Mutebile had turned down the offer. Besides, technical competence, the position of governor is highly political. Otherwise, whoever is appointed governor must be the right person.
Mutebile’s reign as Governor, BOU has also had its own challenges. However, as they say, a man is not judged by number of times he falls, but the number of times is able to stand again. Prof. Mutebile’s fourth term and arguably his last term (given his age and health), analysts agree on one thing, his fourth term is going to be another great test for him. Will it bring down his legacy or uphold it? Only time will tell.
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