President Museveni has said he regrets the decision he took to allow the sale of Uganda Commercial Bank(UCB) in 2001.
Speaking during a public lecture to commemorate the legacy of the late Bank of Uganda governor, Prof. Emmanuel Tumusiime Mutebile on Friday, Museveni said as he sought to turn around fortunes for Uganda’s economy, he relied on Mutebile’s advice.
“There was one time there was debate with Mutebile on one side and Dr. Suruma with the other group and I went with Mutebile’s but later on regretted. Most of the time I went with Mutebile group,” Museveni said on Friday.
He explained that at that time, there was a big debate over the pending sale of the government bank between Mutebile and Dr. Ezra Suruma who was then serving as the chairman and Managing Director for UCB.
“Uganda Commercial Bank was doing very well but Mutebile group put up an argument that the interest rates were high because UCB was government company and managers were carelessly giving out loans and many(borrowers) didn’t pay back and that if it was private, that wouldn’t happen,” Museveni explained.
“The Surumas(UCB officials) put up very big fight but I got persuaded by Mutebile and I said let’s try it and see. We then called the South African group of Stanbic.”
Parliament in 2001, after heated debate, resolved that UCB should not be privatised.
President Museveni, however, wrote to Bank of Uganda Governor, Emmanuel Tumusiime Mutebile insisting that it should be sold even when it had improved in liquidity.
Bank of Uganda proceeded with opening of the bids leading to the sale of majority of UCB’s shares to the South African Bank Stanbic bank at $ 19.6 million, below its value by $5m
On Friday, the president said whereas he regrets the decision to sell Uganda Commercial Bank, it taught him a lasting lesson.
“Then there were other banks like UDB, Housing Finance and Post Bank among and they wanted to privatise them and I said please forget, there will be no more privatisation of these banks because I made mistake of UCB that I will never repeat,” he said.
President Museveni said the late governor of the Bank of Uganda helped the ruling NRM government to revive Uganda’s economy which had collapsed under the previous regimes.
Former BoU governor Emmanuel Mutebile
According to Museveni, by 1962 when Uganda got independence, the country had a small island of a modern money economy surrounded by a sea of non-money traditional economy.
“This kind of economy was being described as the money economy enclave of coffee, cooper and cotton as well as tobacco, tea and tourism. When Idi Amin came in, he destroyed much of that small Island and by 1986, cotton had collapsed, copper had collapsed it was only coffee which was still limping on at two million bags a year. Tourism had collapsed, tea had shrunk from 23 million kilograms to only 3 million kilograms and tobacco was still limping on,” he recalled.
He noted that when his government came into power in 1986, they came up with six targets that would revive the economy and here Prof. Mutebile played a vital role in helping them achieve their economic goals.
“When we came and we linked up with the Mutebiles, definitely, they contributed and in particular Mutebile contributed to the six points. By the 1969 census, only 4 percent of the people were in the money economy. 96 percent were in the subsistence economy, can you imagine? When we came into government, we started to talk about it but when checked, even by 2013, the people who were in the money economy were only 32 percent of the homesteads. 68 percent were outside the money economy.”
The president also pointed out that Prof. Mutebile and his group specifically put emphasis on the role of the private sector, helped to control inflation as well as other issues that helped to grow the country’s economy.
“The Mutebile group helped us with the tactics of achieving our long-term program.”
The State Minister for General Duties in the Ministry of Finance, Henry Musasizi, said the late governor laid a solid foundation for BOU.
“It is important to remember that during his time, he played a significant role in stabilising the economy that helped to foster economic growth and development of Uganda,” Musasizi observed.
“His legacy can, therefore, be seen in the relatively stable micro-economic development of Uganda during his tenure and his ability to guard the independence of the Bank of Uganda. His focus on monitoring and ensuring financial stability of the country helped Uganda to resiliently stand the economic shocks such as the global financial crisis of 2008 and, more recently, the Covid-19 pandemic and the global fuel crisis which affected many countries globally.”
The Deputy Governor of BOU, Dr. Michael Atingi-Ego also described Prof. Mutebile as an intellectual, economic policy and central bank giant who spoke with passion and conviction, and a strong leader who governed decisively.
Deputy Governor of BOU, Dr. Michael Atingi-Ego (Photo by Francis Isano)
“He endowed us with a legacy and pedigree in courageous, charismatic and progressive decision-making that has enabled Bank of Uganda to successfully navigate the shocks hitting the economy in the world of radical uncertainty,” Dr. Atingi-Ego said.
“The Bank of Uganda is now focused on the impact of his policies and operations on the people we serve. He was instrumental in designing and reforming the Ugandan economy. Today, his sound macroeconomic, management and performance skills still offer remarkable economic opportunities to the country.”
Abebe Selassie, Director of the African Department at the International Monetary Fund (IMF) said Prof. Mutebile was a powerful policy maker with brilliant ideas.
“I first met him in 2006 when I moved to Kampala to work as Country Representative – IMF but I knew of him and his work before I came here. The three years I spent here, I worked very close to him and learnt a lot from him,” Selassie said.
Dr. Patrick Njoroge, the Governor of the Central Bank of Kenya said he learnt a lot from Prof. Mutebile and his wise counsel was very paramount in helping him to deeply understand the banking issues.
“Of course, over the years I consulted with him and got experience and, truth be told, I really benefited from the conversations that we had. We became friends but really, he was my elder brother and I want to thank you, Mr. President and indeed the people of Uganda, for giving me such a worthy elder brother,” Dr. Njoroge revealed.
“He can only be described as a man of all seasons because he didn’t only play as a striker and defender but he played where he needed to play. In that sense, he was a man of multiple skills; he was an excellent micro-economist who dealt with things as an economist.”
The lecture was also attended by former Prime Minister, Amama Mbabazi, Dr. Donald P. Kaberuka, the seventh president of the African Development Bank (ADB) and chairman of the Global Fund and Ministers, among other dignitaries.
The lecture ran under the theme: “The Legacy of Prof. Emmanuel Tumusiime Mutebile and it’s implications for the current economic challenges facing Uganda and Sub Saharan Africa”.