Did IMF adviser mislead BoU on Crane Bank?

The Supreme Court has demonstrated that it still cares about Article 1 of our tattered Constitution. The clause says “all power belongs to the people”.

In the recent ruling on Crane Bank versus Bank of Uganda (BoU), the Supreme Court ruled in favour of businessman Sudhir Ruparelia and his fellow shareholders at the defunct Crane Bank, which was casually closed by the all-powerful BoU in 2016.

Many Ugandans suffered financially, emotionally and mentally when BoU brought down its iron fist on yet another local attempt at having a small slice of our financial sector, which is dominated, controlled and owned by foreign capital. Crane Bank became the seventh local bank to be dissolved hurriedly by the Central Bank. The process was neither transparent nor accountable to the powerless people of this country. Just how difficult is it to show some respect for Article 1?

Now that Emamanuel Tumusiime-Mutebile, the former powerful governor – who seemed to cherish listening more to markets than to Ugandans – has gone to a better place, BoU should come down to earth. Why do I say this? A parliamentary committee that put the spotlight on the questionable decision to close local banks gave me the feeling that BoU had its head up there.

After that probe, I wrote: “To restore public trust in its operations, BoU must raise the bar on transparency and accountability to the public…. The bank needs to be watched because it seems to be loaded with too much independence.” (See, ‘IMF adviser should avoid pressuring BoU Governor’ in Daily Monitor  of September 13, 2019.)

I was – and still is – greatly alarmed by the fact that nearly 60 years after our “independence” we have an IMF adviser sitting right there inside BoU headquarters! I suspect that a resident IMF adviser had something to do with the Central Bank’s bad decisions to not only shut down Crane Bank but to subsequently sue it for some Shs390b.

If wishes were horses, I would wish that the World Bank and IMF disappear! During the run-up to the 2016 General Election, Daily Monitor gave Ugandans a rare chance to say what they would do in the first 100 days if they were elected President of Uganda. I seized that chance to say exactly what I would do about those two Bretton Woods Institutions.

I wrote: “Five minutes after swearing in, I would sit down, ignore diplomatic niceties and write a two-sentence letter to the World Bank and IMF…. In the first sentence, I would thank these institutions for the good work they have been doing in Uganda all these many years. And in the second sentence I would tell them in no uncertain terms to wind up their operations in Uganda and take their business down the road within 90 days.” (See, ‘Eject IMF envoy, repossess privatised parastatals’ in Daily Monitor of January 19, 2016.

I meant every single word I wrote, but an NTV news anchor, while doing the press review, dismissed the article as a joke. However, I was later pleasantly surprised to see that the article was posted on the official website of the Parliament of Uganda! Why is this significant?

It means there is a clear sense of understanding that it was despair, not prudent economic planning, that informed our decision to let the World Bank and IMF dictate the terms for our economic recovery. Now we are staring at the bitter truth. The banking, manufacturing, insurance, mining, major construction, mobile money, and other key sectors of the economy are run by foreign capital.

What do we have? Empty pride in “economic growth”. A countryside in deep slumber. No commercial agriculture. No value addition. No meaningful education (it prepares our children to work as security guards, maids, labourers and whatnot).

BoU is in the middle of it all. With advice from IMF, it keeps raising minimum capital requirements for opening a bank to deter Ugandans from owning banks in their own country. And it closes – and sues – existing local banks with pleasure.

Supreme Court, thank you!

Dr Akwap is an associate consultant at Uganda Management Institute