About me.

Andrew M. Mwenda is the founding Managing Editor of The Independent, Uganda’s premier current affairs newsmagazine. One of Foreign Policy magazine 's top 100 Global Thinkers, TED Speaker and Foreign aid Critic



Monday, February 18, 2019

Impunity at Bank of Uganda


How institutional independence allowed the central bank to indulge in gross mismanagement and incompetence

THE LAST WORD | ANDREW M. MWENDA | Last week was the most shameful for Bank of Uganda. During hearings before the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (COSASE) it was exposed that BoU sold the assets and liabilities of the now defunct Crane Bank Limited (CBL) irregularly in blatant violation of the law.

First, a caveat: I am biased when it comes to issues of CBL. Its former owner, Sudhir Ruparelia, is my friend. I was a customer of CBL as were all businesses I am associated with. In this capacity, I experienced the high quality of service CBL extended to their customers and which was tailor-made to address the specific characteristics of our society. Therefore, my personal bias and interest should not blind the reader to the issues I raise.

BoU took over statutory management of CBL on October 20, 2016. It then, on November 30, 2016, entered an agreement with DFCU Bank to buy CBL’s assets and liabilities and gave DFCU unlimited access to CBL records.

Clearly BOU had no intention or desire whatsoever to stabilise CBL; its intention was to liquidate. On December 9, 2016, BOU asked DFCU to submit a bid to buy the assets and liabilities of CBL.

The first draft forensic audit report by PricewaterhouseCoopers (PWC) on CBL came out on January 13, 2017. So, essentially, BoU had invited DFCU to buy CBL assets and liabilities before it had an inventory of these assets and liabilities. How can you sell what you do not know? Secondly, BoU did all this without a forensic report showing the present value of the assets it was selling. Without a reserve price BoU simply asked DFCU to pay whatever it wished.

Now we must remember that the Financial Institutions Act (FIA), clearly states that: “In determining the amount of assets which is likely to be realised from the financial institutions assets, the receiver shall a) evaluate the alternatives on the present value basis, using a realistic discount rate; or b) document the evaluation and assumptions on which the evaluation is based, including any assumptions with regard to interest rates, asset recovery rates, inflation, asset holding and other costs.” BoU disregarded these provisions completely.

DFCU grossly undervalued CBL assets knowingly and paid peanuts. Hence, a month after buying them, it re-valued them at prices five times higher. For example, CBL had valued its branches at Shs90 billion. DFCU valued them at Shs10 billion and paid stamp duty at that price. It re-valued them at Shs48 billion immediately after. Is this not tax fraud?

Why did BOU act with such recklessness and DFCU accept to go along with this blatant violation of the law if the two were not colluding to defraud the shareholders of Crane Bank and the taxman? For two decades, BOU has adopted a policy where, whenever a commercial bank is in distress, their only solution is to liquidate. They make no consideration of any alternative; like how they can rescue a bank. Over the years, I have realised that this is a result of four factors in order of their importance: ideology, impunity, incompetence, and corruption.

Ideologically there is hostility to local ownership of banks. We assume that bankers do insider lending and other practices that undermine the viability of a bank. This bias is not pulled out of thin air. It is the response to this that matters. The lesson we get from such mistakes is criminal prosecution of the culprits, which silences them. BoU then hands over the local bank to those it wishes in sweetheart deals that suggest collusion between BoU and the buyers.

A business, like a person, grows from infancy to maturity. In infancy, it will make many mistakes and suffer the problems of incompetence, mismanagement, and even fraud. In practically every enterprise, these mistakes should be opportunities for learning, correcting mistakes, and improving on performance. Every person, organisation, business or country grows through such feats and starts.
The ideological problem in Uganda is that where local firms are involved, such mistakes become the excuse and the justification for shutting them down.

To kill a business because of these mistakes is like punishing a child of one year because it pees and plays in its own pee. This has led us to a situation where the commanding heights of our economy are owned by foreign firms. Ugandans only work in them as employees. Hence profit repatriation, transfer pricing and other illegal remittances by multinational firms are sucking the country dry.

BoU officials have defined their role narrowly i.e. to achieve financial stability. This is helped by the FIA. In pursuit of this narrow objective, BoU officials abuse their independence by acting with impunity, intimidating, and blackmailing owners of distressed banks with criminal prosecution to unfairly dispossess them. In cases involving local owners they had also jailed some of them. This suppressed any challenge to the criminal and fraudulent way BoU acts.

Previously no one questioned whether BoU followed the law or whether their claims against any given failing bank were true. Indeed, no one asked whether the only option available to the central bank was to liquidate a bank in distress. Because everyone respected their independence and believed they were doing the right thing, the people at BoU felt omnipotent. Thanks to Sudhir, he was the only dispossessed bank owner who decided to fight back; a factor that has exposed BoU incompetence, impunity, and criminality.

I personally experienced this impunity and blackmail. During a meeting to resolve the problems of CBL at the ministry of Finance, Justine Bagyenda, then Executive Director Bank Supervision, told me point blank: “we are the state and were going to destroy Sudhir and take all his property, including that private home he is very proud of if he does not play ball.” Today I feel proud that I live in a country with strong institutions to check this kind of impunity. As we know, it is BOU managers like Bagyenda not Sudhir, who are in the dock.

Here was the crisis at BoU: Bagyenda lacked basic intellectual ability to understand the macro economic challenges of Uganda, and how to resolve banks in distress with strategic foresight. This was compounded by that fact that, while intellectually astute, Deputy Governor Louis Kasekende approaches bank issues through highly technical and theoretical lenses. To make a bad situation worse, Governor Tumusiime Mutebile was too ill to add anything valuable.

****

18 comments:

Bruce David said...

Hello everyone..Welcome to my free masterclass strategy where i teach experience and inexperience traders the secret behind a successful trade.And how to be profitable in trading I will also teach you how to make a profit of $12,000 USD weekly and how to get back all your lost funds feel free to email me on(brucedavid004@gmail.com) or whataspp number is +22999290178






Hello everyone..Welcome to my free masterclass strategy where i teach experience and inexperience traders the secret behind a successful trade.And how to be profitable in trading I will also teach you how to make a profit of $12,000 USD weekly and how to get back all your lost funds feel free to email me on(brucedavid004@gmail.com) or whataspp number is +22999290178

neme amber said...

Hello, everyone! I,m here to explore blogs and forum about the wonderful and most safe cure for (Herpes Virus).
I was positive to the deadly virus called herpes and i lost hope because i was out casted and rejected even by my closet friends.
i searched on-line to know and enquirer about cure for Herpes and i read someone testimony on how he was cured from Herpes so i decided to contact the same herbalist because i know that nature has the power to heal everything.
i contacted him to know how he can help me and he told me never to worry that he will heal me with the natural herbs from God!
after 2 days of contacting him, he told me that the cure has been ready and he sent it to me via DHL and it got to me after 3 days!
i used the med as he instructed me (MORNING and EVENING) and i was cured!
its really like a dream but i am so happy!
thats the reason i decided to also add more comment of Him so that more can be saved just like me!
and if you need his help, you can email him on nativehealthclinic@gmail.com or whatsapp +2348140073965
I,m neme amber and you can get intouch with me via nemeamber@gmail.com..

Jacques said...

binaryoptionstradingplatformarchive.blogspot.com

cailloliasa said...

I just want to say a big thanks to ( CHIEF DR LUCKY ) for what he has done for me and my family by helping me to win lottery. I won Five Hundred and Thirty Three Million Us Dollars. (($533,000,000.00)). His lottery spell is the best and so amazing. My life is now balance and i am Now Very Rich As i have always wanted and i am out of doubt. Are you looking for a real and genuine spell caster to help you win big in any kind of lottery you play? you can contact Chief Dr Lucky , today all your plan to ever win Big in Lottery will Come True and work out well for you. His spell very real and genuine i can not still believe it And His spell also work very fast. Thank you so much chief Dr Lucky for dedicating your time to cast the Lottery spell for me. I got my bills paid and my debt cleared and am still mega rich. If you need a real And Genuine spell aster to help you Win lottery, kindly contact him for fast and urgent Help via email : chiefdrlucky@gmail.com or Whatsapp or Call Via +2348132777335
Website : http://chiefdrluckysolutionhome.website2.me/

janaz said...


I was searching for loan to sort out my bills& debts, then i saw comments about Blank ATM Credit Card that can be hacked to withdraw money from any ATM machines around you . I doubted thus but decided to give it a try by contacting {nashwilliams4@gmail.com} they responded with their guidelines on how the card works. I was assured that the card can withdraw $5,000 instant per day & was credited with$50,000,000.00 so i requested for one & paid the delivery fee to obtain the card, after 24 hours later, i was shock to see the UPS agent in my resident with a parcel{card} i signed and went back inside and confirmed the card work's after the agent left. This is no doubts because i have the card & has made used of the card. This hackers are set to help people with financial freedom!! Contact these email if you wants to get rich with this Via: nashwilliams4@gmail.com or WhatsApp Via+2349057353987

Morgan Reed said...

I want to share a testimony of how Dr UDI herbal mixture cream saved me from shame and disgrace, my penis was a big problem to me as the size was really so embarrassing ,and i was also having weak erection problem i had so many relationship called off because of my situation, i have used so many product which i found online but none could offer me the help i searched for Which was very painful and then i saw some few testimonies about this herbal specialist called Dr UDI and decided to email him on so I gave his herbal product a try. i emailed him and he got back to me and we discussed, he gave me some comforting words and encouraged me also ans then gave me his herbal pills and cream for Penis Enlargement Within 1 week of it, i began to feel the enlargement of my penis, " and now it just 2 weeks of using his products my penis is about 10 inches longer and am so happy contact Dr UDI via (drudiherbalhome@gmail.com) Via whatapp on this number +2348051243538

Lauren Mathew said...

How to have your husband back home with your kids again
I'm a lady with 2 kids i am from India, my husband leave me and his 2 kids for about 10 months i go through a lot of pain i do all i could to make him returned to me and to his kids but nothing works out. it was really a stressful period to me because i could dint go through the heartbreak. i was told to get a love spell doctor contacted to help me out which i did i was lucky to get DR.PEPOKO Contact who was able to help me out, he cast up a love spell that brought back my husband to me and to his kids thanks so much DR. PEPOKO I really appreciate what you have done for me. here he his contact if you may required for it by solving your relationship email. Pepokospiritemple@gmail.com call whatssap +2348156148821
Here is also Dr. PEPOKO website you can visit it yourself www.pepokospiritemple.blogspot.com

Here is my details also if you wish to contact me personal::: mathewlauren7@gmail.com

Joe said...

Beware of online spell or to fix your broken marriage or relationship problem or after a divorce or Breakup,I was recently scam by two of them, until one faithful day i meet a man called Dr Oseiboh who help me to get back to the mother of my 2 kids after we have been separated for 3 years,I only pay for the items required for the spell and he cast the spell for me within 48hours my ex wife called me and beg me to forgive her for everything and we are back together.if you need a real and quick love spell or you are passing through pregnancy problem Dr Oseiboh is the answer, Please if any body needs. LOVE SPELL,LOTTERY,PREGNANCY SPELL, DIVORCE SPELL,STOP COURT CASE AND WIN ANY COURT PROBLEM,DEATH SPELL,BUSINESS SPELL AND MANY MORE YOU MAY NEED. Email him now for your own help. via email droseiboh12@gmail.com add him on whatsapp line or call +2347017565415....

thomson ella said...

I was diagnose with lupus diseases since 4 years ago and i met a doctor he
told me there is no cure and i have be taking some medication the warts
multiplied when trying to removed them and it got me embarrass and pains,
luckily few weeks ago i was recommend to Dr Aziza for natural treatment
after one week i got 100% cure and all the wart and pains got disappeared,
i sheared this post because its part of my life experience, incase anyone
need speedy help about this cure email Dr Aziza via,
drazizahome4cure@gmail.com

Morreen Dolly said...

Hello everyone , I was totally broken when the love of my life left me it was so hard for me and I almost gave up if not for a friend who directed me to a very good and powerful man called Dr Ralph who helped me bring back the love of my life and now he treat me with so much love and care. I don’t know what kind of problem you are passing through but with what he did for me I know he can help you. So try and talk to him on WhatsApp on: +2347037816417 Or email at: Ralphspellsolution@gmail.com. He has a permanent solution to any type of problems such as: Lottery Spell, Love Spell, Power Spell, Psychic reading, Success Spell, Cure of any sickness, Pregnancy Spell, Marriage Spell,Job Spell, Protection Spell,Win court Case Spell, Luck Spell and many more.

Ann Lopez said...

After 5 years in marriage with my husband with 2 kids, my husband started acting weird and going out with other ladies and showed me cold love, on several occasions he threatens to divorce me if I dare question him about his affair with other ladies, I was totally devastated and confused until an old friend of mine told me about a spell caster on the internet called DR OKISIN who help people with relationship and marriage problem by the powers of love spells, at first I doubted if such thing ever exists but decided to give it a try, when I contact him, he helped me cast a love spell and within 48 hours my husband came back to me and started apologizing, now he has stopped going out with other ladies and his with me for good and for real. Contact this great love spell caster for your relationship or marriage problem to be solved today via: dr.okisinsolutiontemple@gmail.com  or directly WhatsApp: +2348109374702.   DR OKISIN...   he also have the following solution to
pregnancy spell
death spell
lottery spell....
job promotion spell........

Voodoo home said...

Hello am Christiana from the united state, i read some testimony about Dr voodoo on how he has helped people in bringing back there ex within 48hours i was just thinking if that was real,And decided to call a lady who made a testimony and also dropped her number,So i called her and ask her about Dr voodoo she said Dr voodoo is a trustworthy man and he his ready to bring back my lover for me,i was just so happy and a little bit relief that my lover will be back to me soon,Then i decided in contacting Dr voodoo which i did,And before i could share him my problem he has already told me what i came for,And he said everything will be okay within 48hours that my lover will be back to my arms,So he said he would be casting the spell and that within 48hours my lover would call me,So i hoped so truly before the 48hours i got a call from a man who has left me for the past 6years saying he is sorry and he wants me back,i was happy and i said i also want him back,Then i traveled to Canada to meet him up,And he apologized for what he has done to me now he proposed to marry me and we are both preparing for our wedding soon,All thanks to the great and World best spell caster, Dr voodoo His private mail voodoospelltemple66@gmail.com you can also add Dr.voodoo on whatsApp +2348140120719

john danilla said...

I am John Danilla from UK( northern ireland), i want to share a
testimony on how a powerful spell caster cured my HIV disease, i was
diagnosed of this disease, in the year 2009, last week i saw a testimony on
Dr.Abia on how he cured an HIV patient, so i contacted him through phone
and he asked me to email him, which idid, so he told me that all my
problems is over and then he decided to do an healing spell spell for me so
after he finished it, he told me to wait for just 24 hours and then i
should go for a test, so i really did as he had said, so my greatest
surprised when i went to the hospital to go for an HIV test, the Medical
doctor diagnosed that, i am now HIV negetative at first i was amazed and
now i have come to realise that this spell caster Dr. abia is a very
powerful one and a real spell caster. So viewers of this should please join
me in my celebration for i am the happiest man on earth today and if you
want to contact him, you can do this via his email
drabiaspellhome@gmail.com or call him or whatsapp him
+2348105257464

Florence charlott said...

Never give up in life they all say no cure to HSV 2 which is a big lie I have pass through many process also i never believe there is really cure to HERPES until I meet Dr.Ehiaguna the doctor that have been helping many people for many years, I come across this doctor online when I was searching for cure online I found out about this man, and to my greatest surprise this man have the herbal medicine which I have been looking for years I explain my problem to him through the email I found on someone who testify about him also, Dr.Ehiaguna write me a reply and explain how the process work so after ordering for the medicine I got it within 4 days and I took it according to the way Dr.Ehiaguna instructed, I was so happy after two week I took the medicine there was very big change in my health when I was done with the process I go for test, I found out I am negative that was the day I have the tears of joy you can also get in contact with my doctor through his email now drehiaguna@gmail.com or you can also WhatsApp him +2348073908953. And He also have herbs medicine to cured the following diseases; eczema,urethra wart,chronic problems.Herpes, Cancer, Als,Hepatitis, Diabetes, HPV,Infections,ulcer  ETC

Unknown said...

Been heart broken isn't a thing of joy you know. My wife got me divorced after she caught me cheating on her with my ex lover. Was so ashamed and felt so disappointed at myself. I couldn't bear the fact that I no longer have a life partner so I decided to try get my wife back with everything I could possibly do but nothing worked out. Not till I was referred to Dr,Tony who made what I thought was impossible to be possible by bringing back my wife within 48 hours after I made contact with him. I can boldly and joyfully say that my marriage is working just fine and more beautiful than before and I'm so happy to have got in contact with Dr,Tony for he's really a genius. Thanks to May Albert too for connecting me to Dr,Tony, If you have any issues regardless of how big it is, Dr,Tony will sort it out for you. His Email address; Tonylovespell@aol.com Or call his whatsapp on; +1(903) 847 0267 for urgent response.

Ann miller said...

I need my ex lover back Contact: Drsikama@gmail.com and his result is 100% sure and guaranteed!.
I got a divorce from my husband when I was six months pregnant with my second child. We had been arguing and quarreling nonstop since the day our first child was conceived, no love nor trust from him anymore so he divorced me. And all these whiles, I have been trying all different means to get him back, I also tried some different spell casters here in the United States, but none of them could bring Richard back to me. It was only Dr. sikama who guaranteed me an urgent 28 hours spell casting, and he assure me that my husband will be with me again. I am writing to offer my thanks and deep gratitude to you for keeping your promises, and for using your gifted and great powers to bring him back home. I was thrilled to know that you are specialized in reuniting Lovers. Thank you Sir, for helping me through the worst times of my life, for being such a great spell caster, and for giving me a love spell that has brought me so much joy in my marriage. My husband is back and promise never to leave me again. If you doubt his ability, trust me. You should take a chance. It pays off in ways you could never even imagine. If you are their right now and you need a powerful and urgent love spell to bring back your ex kindly contact Dr. sikama right now he is the only answer to restore your broken relationship or marriage. Here’s his contact: Email him at:drsikama@gmail.com ,Call/WhatsApp:+2348130725051

Florence charlott said...

I want to write a little testimony about the good work of doctor ehiaguna who cured me from Hsv 1 and 2 for just 2 week with his herbal medicine, I never believe I can be normal again and have a good life like others I always regretted the day I got diagnose with the virus, I was lost of hope when my doctor told me there is no cure for it but I keep thinking and thinking about my future, if I can have kids of my own well I am so grateful for my helper who get me cured with his herbal medicine, I go online in search of anything that can help me because I can’t deal with it forever so I found this doc ehiaguna email on a blog of someone who was cured by him I quickly contact him for help and explain all my pain to him, he told me not to worry about it there is cure for real, I never believe until he send me the herbal medicine when I order for it and I have it within 4 days that is how I took the medicine for 2 week and the following week I go for test just to confirm I was 100% cured from this sickness what a miracle in my life I am so happy right now, you can also get in contact with him if you have such sickness through drehiaguna@gmail.com and also WhatsApp him +2348073908953... And He also have herbs medicine to cured the following diseases; eczema,urethra wart,chronic problems.Herpes, Cancer, Als,Hepatitis, Diabetes, HPV,Infections,ulcer  ETC

Sharon Wayne said...

I want to thank Dr Emu a very powerful spell caster who help me to bring my husband back to me, few month ago i have a serious problem with my husband, to the extend that he left the house, and he started dating another woman and he stayed with the woman, i tried all i can to bring him back, but all my effort was useless until the day my friend came to my house and i told her every thing that had happened between me and my husband, then she told me of a powerful spell caster who help her when she was in the same problem I then contact Dr Emu and told him every thing and he told me not to worry my self again that my husband will come back to me after he has cast a spell on him, i thought it was a joke, after he had finish casting the spell, he told me that he had just finish casting the spell, to my greatest surprise within 48 hours, my husband really came back begging me to forgive him, if you need his help you can contact him with via email: Emutemple@gmail.com or add him up on his whatsapp +2347012841542 is willing to help any body that need his help.
Website: http://emutemple.website2.me/