Members of Parliament’s Committee on Legal and Parliamentary Affairs maintain that the Governor and Deputy Governor of Bank of Uganda should cease being part of the central bank’s board because it brings about conflict of interest noting that one of the board’s roles is to supervise the management of the bank headed by the governor and the deputy. By chairing the board, the MPs, say is akin to self-supervision.
Despite contrary views from the Central Bank itself, the MPs have stuck to their guns, saying that maintaining the status quo, would make the governor and deputy governor accountable to only themselves, which is a flaw in corporate governance.
The MPs, who include, Hon. Abdu Katuntu, who chaired the 2018/19 probe into the Central Bank by the Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) said that it is important that in light of previous governance issues at the Central Bank, it was important that the affairs of the Central Bank, be brought under control.
“Who supervises the governor and the deputy governor in the execution of their duties? None. We don’t have any institution that supervises the governor and the deputy governor, in this country. None,” Hon Katuntu submitted.
Giving an example of Kenya, where the two roles have been separated, an austere Hon. Isala Eragu Veronica Bichetero, the MP for Kaberamaido County asked the Deputy Governor, “What do you take your board for?”
The MPs also rejected a proposal by the Central Bank that the approval of their budgets should be left to the board instead of Parliament.
The MPs were responding to a submission by the Deputy Governor, Mr Michael Atingi-ego who submitted that separating the Chief Executive and Board Chairman roles would be tantamount to “diverting the governor from his/her core mandate of delivering price and financial sector stability.”
“We need to maintain the status quo to support the stability in business continuity and to ensure adequate representation of executive management on the board,” Atingi-ego said, adding: “We need somebody who is involved at the management level to be able to present their (management) position to the board.”
The Committee is hearing views from stakeholders, in regard to The Constitution (Amendment) Bill, 2020, tabled by Igara County East, MP Hon. Mawanda Michael Maranga.
The Bill seeks to amend certain parts of Article 161 of the Constitution. Hon Mawanda wants the role of the Governor and his deputy separated from that of BoU Chairman and Deputy Chairman respectively.