Mutebile to MPs: Use Inflation Rates to Judge BOU Performance

Speaker Rebecca Kadaga and Governor Bank of Uganda Prf Emmnauel Tumusiime Mutebile (Seated 2nd and 3rd Left) in a group photo at the sensitization workshop for Members of Parliament on the role of The Bank of Uganda in macroeconomic management at Imperial Royale Hotel (Photo by Paul Mugume)

The governor of the Bank of Uganda Prof. Emmanuel Mutebile has urged parliamentarians to base on the annual Inflation rates when judging the performance of the Central Bank.

Mutebile was speaking Friday at a sensitization workshop for Members of Parliament on the role of The Bank of Uganda in macroeconomic management, mind held at Imperial Royale Hotel in Kampala.

“In the 1980’s, tadalafil inflation rates were in double digit, ed almost reaching 100 percent. Since 1990, the Bank of Uganda has been targeting to hit an annual inflation rate of 5 percent and below,” he said.

“Over the past three years, core inflation rate has been at 4.9 percent which is under the target. Future inflation will also be held in the same level,” he added.

The governor noted that the Central Bank is unique among other public institutions and that unless it’s uniqueness is upheld, inflation cannot be controlled.

He said that the Bank of Uganda was among the first banks to get operational independence, something which is becoming widespread across the continent.

“Independence of the central bank prevents political interference or political pressure to keep interest rates lower, a situation that would increase inflation.”

“We are constitutionally mandated to maintain the value of the National currency and to control inflation rate. If the central bank can’t do the job, controlling inflation will remain a dream.”

The governor however clarified that operational independence of BOU doesn’t mean that the institution is not accountable.

“We are accountable to the public and subject to official audit. The Bank of Uganda submits reports to the Ministry of Finance which in turn submits them to Parliament for review.”

Speaker Rebecca Kadaga speaking at the event

Speaker Rebecca Kadaga speaking at the event

“Appointment of the governor and other officials of the central bank are also subject to approval by the Parliament.”

In her remarks, Speaker of Parliament Rebecca Kadaga lauded the BOU for thinking about engaging the legislators urging that the same should be done often to enable MPs better understand how the institution operates.

“MPs are about to start discussing the budget cycle and they are doing it in a period when interest rates are too high and businesses are falling. They will need to understand this well, so as to be able to explain it to the people they represent and to make informed decisions,” she said.

“We shall continue to do our role of legislation and we shall have time to discuss reports by the bank of Uganda.”



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