16 April 2018

Uganda: Mutebile Survives Coup At Central Bank

Photo: Daily News
Bank of Uganda governor Prof Emmanuel Tumusiime-Mutebile (file photo).

Kampala — It is 1:30 PM April 04. Governor Emanuel Tumusiime Mutebile, wearing a charcoal grey suit, white shirt and blue-checkered tie, is having lunch together with other bank executives in the Governors' Dinning located on the extreme end of the Eastern wing of the Central Bank building on Kampala Road.

His gold-rimmed glasses hang perilously over his nose as he occasionally takes a glance at other officials while chatting with his neighbour, who is also his deputy, Louis Kasekende. The latter looks dapper in rim-less glasses, a dark-blue suit, white shirt, and matching tie.

The Governor likes to have lunch at his home. And although he has had some lunch dates with his deputy and other executives in the recent past, this has not happened much since Feb.8 when he transferred staff in a major shuffle that was seen as a snub of his deputy, some top executives and even board members.

That is part of the reason why the few top officials who are having lunch with the two men on the same table -- albeit at a distance -- are paying close attention.

A few who steal a glance from time to time look at the body language for indications of the situation between the two big men. Some hope to tap into what the two men are saying to each other to get a sense of direction of their relationship. The smiles appear genuine, the situation awkward.

Stakes are high. A board meeting is coming up the next day and there is anxiety over how the thorny issue of transfers of staff by Mutebile will be dealt with. Rumour is rife that several board members have conspired to walk out should Mutebile invite in his top appointee, Tumubwine Twinemanzi, the Executive Director Banking Supervision who replaced the controversial Justine Bagyenda.

This is not the bank's finest hour -- BoU finds itself a subject of investigation by the Financial Intelligence Authority, the Inspector General of Government, Auditor General, and parliament-- and intrigue within the walls of the bank is fuelling a fire that is razing its reputation which, the Governor has says is its most "critical resource".

The members of staff know that Mutebile and Kasekende have just emerged from a heated meeting of top executives of the Bank.

Fire over Independent article

That meeting started at 11:20AM in the Governor's boardroom on the Seventh Floor -- the same floor, where both the Governor and his Deputy sit.

On the face of it, the meeting was the regular gathering by the top Executive Committee also internally known as EXCOM, which comprises the Governor, his deputy, Bank Secretary, and all the Executive Directors. Only Adam Mugume, the Executive Director Research did not attend.

But sources tell The Independent that at the centre of the meeting was issues surrounding an article we published in The Independent on March 30 titled 'Mutebile Vs Kasekende' which lifted the lid off a silent fight between the two men and opposing loyal factions.

The article drew heavily from minutes of BoU board meetings, loads of internal memos, internal investigation reports and multiple interviews with insiders.

The leakage of these documents and willingness of top officials to talk openly to the press, The Independent understands, is part of a desire for major reforms at the bank.

The Independent shines a spotlight on this relationship and the intrigue at the central bank because it believes, revealing the same, advances open debate of the issues and possible resolution before they heavily undermine the ability of the central bank to play its critical roles in giving the country's fragile economy a sense of direction.

The article stirred debate within the walls of the bank about their future and management reacted sharply.

A general memo that came the afternoon of April 04 criticised staff members who leak information and proclaimed institutional integrity and personal cordiality. The memo was later expanded and sent out to the press in the name of the Governor--stirring even further debate at the bank.

In his opening remarks at the meeting, Mutebile reportedly told his lieutenants that a lot had been going and that the team needs to forge ahead and see how to work together.

Kasekende had spoken next, dwelling on lack of trust, a breakdown in communication, leakages of information and reluctance by staff to participate actively in discussions.

Sources tell The Independent that Kasekende, while chairing the Financial Markets Subcommittee meeting the previous day, had faced awkwardness among the staff. Many appeared to hold back.

Talking specifically about the leakages, the Executive Director Administration, Solomon Oketcho, said the confidentiality clause in the regulations of the bank needed to be enforced with penalties against anyone leaking information.

Oketcho reportedly said an earlier planned team-building retreat needed to be prioritised to enhance team building and unity. Reacting to the details of the meeting, some inside the bank, however, said that the intrigue and scheming against each needed to be dealt with directly first.

Several officials agreed and David Kalyango, the Executive Director Finance, said penalising staff for leaking information needs to be mindful that the whistleblower policy allows staff to leak information when they feel that certain things are not going well.

Staff surveys, he added, had showed that staff needed rotations. But now that the rotations had been done, some people are complaining.

The newbie-- Tumubwine Twinemanzi, the Executive Director Banking Supervision, also stepped in. He said leakage of information could be down to people looking for alternative ways of communication because of the breakdown of channels of communication.

Another official said many were concerned that it has become a crime to come toBoU's seventh floor--where the governor sits--as anyone seen here is seen as looking to report to the governor.

The Independent can authoritatively report that some officials had been stopped from attending certain meetings because they were suspected of "leaking information to the governor".

But while Oketcho talked penalizing leakers, insiders say,he has not done much to stop leakages within his department.

Trouble for Oketcho is that, following Mutebile's staff transfers, the first round of leakages to the media came from administration.

They revealed private records of some of those who had been promoted and insiders intimated to The Independent that they felt the officials leaking their records were trying to create the impression that they did not deserve the promotions or transfers.

Given that Oketcho was also opposed to these transfers, many felt that he had not done enough to protect their records.

The meeting ends at 1PM just about time for lunch. An hour after lunch, a rumour starts circulating that something is coming.

Then a staff memo appears. It hits staff emails at 3:45 PM. It reads 'Office of the Governor' but it is unusually from the secretary to Deputy Governor, Kasekende.

The Independent has seen the memo which reads: "This morning, EXCOM met to discuss matters that have been the subject of much media reporting, arising from the staff changes I carried out in February 2018".

It assures staff that a special committee will handle the unresolved issues arising from the said changes. Apart from this, the memo also disparages the article by The Independent of March 30.

The memo reads in part: "Of particular concern to me is the possibility that this article and other similar ones especially on social media are the handiwork of a section of staff who are privy to high level internal discussions, processes and correspondences, and have for reasons best known to themselves chosen to pervert the gist of such discussions to achieve unprincipled aims, played out in the media.

This has grossly called into question the reputation of the Bank, and its top management, and led many in the public to question the Bank's ability to carry out its mandate."

That very evening, the same memo is edited and sent out to media houses.

What rattles many inside the bank is that contrary to standard procedure, the article that ends up in the press is also warning staff. For some, it is a sign that the article has been hurriedly edited and sent out. The article's main intention is to show that there is no fight between the governor, his deputy and some board members.

But the same evening, before the article is even published, reality sets in. The governor's allies learn of a plot by some board members to walk out on him during the board meeting the following day.

Their reason; the Governor has planned to get his new Executive Director Banking Supervision, Tumubwine Twinemanzi -- to speak to them about the Crane Bank case amongst others.

Boardroom games

So, despite a picture being painted at this table of two men cordially dining, staff at the bank told The Independent that suspicion remains high.

If the governor is concerned about the planned walk out by board members, he shows no concerns at all at the lunch date.

And if his deputy, who is also opposed to the transfers, is aware of the plans by protesting board members, he too makes no mention of it, insiders say. The two men go through their lunch seemingly happy.

But speculation was high among the two major camps--those seen as loyal to Mutebile and those seen as loyal to Kasekende on what the governor and his deputy each has up his sleeve. Calls were made.

There is anxiety because, at a previous meeting, some of the board members openly opposed Mutebile's transfers.

One of the board members had even volunteered information to Inspector General of Government (IGG), Irene Mulyagonja and was ready to appear before her inquiry into these transfers as a witness.

However, President Museveni in a March 26 meeting at State House Nakasero asked Mulyagonja to stay off the issue and let a special committee deal with any issues that emerged as a result of the transfers.

The Independent has learnt that some board members; led by former Attorney General, James Kahooza, oppose Twinemanzi because he was appointed in the contested Feb.8 reshuffle, which they say is irregular.

And, many people say, when Kahooza is opposed to something--he is known to be rigid and means business. They cite the January 2012 case when he was board chairman of Uganda Development Bank (UDB) and instituted an internal investigation into the poor performance of trade finance loans at the bank.

When the results of the investigations arrived, on April 20, 2012, the Kahooza-led board resolved to caution the then CEO, Gabriel Etou and suspended him for 15 days. Etou would later lose the job.

So when, in February, Kahooza openly told Governor Mutebile at the inaugural board meeting that he was opposed to the transfers, many sensed trouble. "They should be reversed," Kahooza shot at the Governor without mincing his words.

Apart from Kahooza, the other members of the Mutebile-chaired board are; his deputy, Louis Kasekende, Bank Secretary, Susan Kanyemibwa, William Kalema, Judy Obitre-Gama, and Josephine OkuiOssiya, who replaced Ibrahim Kabanda in November last year. Secretary to the Treasury, Keith Muhakanizi also sits on the board.

Of all these members, it is only Muhakanizi who is seen to be firmly in Mutebile's corner. The others are either in opposition or can swing either way especially on the issue of transfers. That is why the planned coup was a potential disaster for Mutebile.

But, having learnt of the plot early, Mutebile tactfully laid a counter plot.

When the meeting opened the following day, the governor announced to the surprise of the rest of the board members that the head of legal would address them instead. Twinemanzi was nowhere. There were silent murmurs and some sighs of relief.

"Oh. This saves the situation!" muttered one member.

The meeting proceeded smoothly.

Amidst all this scheming and counter scheming, many had hoped that Mutebile would have his hands full, addressing the crisis at BoU. But, The Independent has learnt, he instead insisted on travelling to Washington DC for the April 16-22 International Monetary Fund (IMF) and World Bank Spring meetings.

The meetings will bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organisations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

In Mutebile's absence many eyes will be on the actions of Kasekende, his allies in management, and the board. Until Mutebile returns.


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