Economics experts are querying whether Deputy Governor Michael Atingi-Ego is the right man to fill the shoes of fallen Governor Emmanuel Tumusiime Mutebile.
Since Mutebile’s passing in January, the position of the Central Governor has not been filled by the appointing authority and Atingi is substantially running the show for six months now.
However, in these tough economic times that have seen escalating commodity prices, experts say Atingi is not helping matters.
Atingi has raised the Central Bank Rate not once but twice to the current 8.5% citing controlling inflation. However, this has not provided relief but exacerbated the dire economic situation of the country.
The raising of the CBR has led to banks raising interest rates of new and existing customers. This has added to the financial burden of borrowers and also discouraged new borrowing as the rates are untenable especially for borrowers who want to engage in production and spur the economy.
As prices of commodities rise by the day, President Yoweri Museveni has addressed the country twice in the last one week and said that it will be a mistake for Uganda to subside items like fuel. Experts say the president follows the advice of technocrats and this falls in the docket of BoU.
Atingi himself has spoken against subsidies at a recent forum. In contract other countries in the region are stabilising their prices and bringing some much needed relief to their citizens.
Other economists have also called out the acting governor, reminding him that Finance Ministry had already sent lesser monies to government ministries, departments and agencies for the first quarter of Financial Year 2022/23 and that his containment measures including raising CBR were “absolutely unnecessary”.
This means that the common man will not be able to have all his goods and services procured by the government, as the government agencies will be cautious to spend because of the little money received”.
The Ministry of Finance last week slashed cash releases to institutions and local governments by over Shs4 trillion—a move explained by Finance Permanent Secretary Ramathan Ggoobi as aimed at taming rising prices of goods.
Shs8 trillion was supposed to be released in the first quarter.
Another industry source says that on Wednesday July27 2022 that the acting BoU governor has since failed to brainstorm new methods of supervising commercial banks and that he was still relying on Prof Mutebile’s template.
“We know that the BoU supervision role under Mutebile was not effective as some banks collapsed while others were closed unfairly- Crane Bank Limited, National Bank of Commercial and Global Trust Bank Uganda, all now defunct are the examples,” a top economist said.
Prof. Mutebile in 2019 admitted that his methods were not effective and that they had erroneously led to Banks insolvency or failures.
The financial experts in the country recently said the exit of Afriland from the Ugandan market showed weakness of BoU.
BoU, they said, is supposed to ensure that banks remain operating in the country because they help in tax revenue, provision of direct and indirect jobs as well as offering loans to individuals and government, but Dr. Atingi did not show any remorse when Afriland Bank recently exited Uganda.
“What new measures has he (Atingi) put in place to ensure that Uganda does not lose more banks,” a retired financial expert who once worked in government asked.
There is also a rumour circulating that Atingi served a stint in Luzira during his first posting at BoU.
The question now that remains is, when is Museveni filling the governor position, and who is the most suitable candidate.