Emmanuel Tumusiime – Mutebile says Uganda’s economy is Sound and Resilient

By Paul Ndiho
December 7, 2011
Uganda’s inflation rate has soared from single digits to more than 30 percent over the last few months, its highest level in years. Voice of America’s Paul Ndiho recently spoke with the central bank governor of Uganda, and asked him how the government is coping with the problem.
The International Monetary Fund had predicted solid economic growth for Sub-Saharan Africa this year. The IMF said Africa’s prospects were high, but a slowing global economy poses some risks. Analysts say that if the economic situation in high income countries continues to deteriorate significantly, sub-Saharan countries might be at risk. The Governor Central Bank of Uganda, Emmanuel Tumusiime-Mutebile, attributes his country’s soaring inflation to external events but says there is little he can do to tackle inflation.
“Inflation for the last seven months has been unusually high. We have not had this kind of inflation for fifteen years but it’s largely attributed to external shocks, in particular the sudden steep rise in world oil prices, as well as world food prices. These prices have caused inflation to rise to almost 20% which has not happened before. Because this inflation is external, so-called due to “supply shock,” central bank instruments cannot do anything about it.
Mutebile is regarded as an official who gives foreign investors confidence in Uganda. Appointed in 2001, he spearheaded reforms in Uganda’s troubled banking sector. He was recognized at this year’s “African Banker Awards” for being the architect of Uganda’s economic revival.

“They told me that I was Central Governor of the year, because of what I have done as the governor, for what I have done for the banking sector in general. It is the best news that has happened to Uganda’s banking system for a long time, in this award and I’m sure it will create a lot of confidence in the system.”

Tumusiime Mutebile has lived an eventful life in Uganda. In 1972, he was forced to flee the country after he gave a speech, publicly criticizing the expulsion of Asians from the country. His childhood friend and former schoolmate, Shaka Ssali, host of VOA’s flagship live TV Talk Show, Straight Talk Africa, describes Governor Mutebile as disciplined and hard working.
“What I can say frankly is that, if I can walk back in memory lane and see us sit in Kigezi High School Primary in Kabale. I’m not surprised when I look back, and I see him now as the Governor of the Ugandan Central Bank, the reason being very simple. Because, clearly even at that time, he was one of those kids that you would have said, he was most likely to succeed.”
Mr. Ssali says that he expected that Mr. Mutebile would become a top civil servant in Uganda.
“The only thing that surprises me about Mutebile frankly is that I should have expected him perhaps to be the President of the Republic of Uganda. Short of that, to be a Politician, Minister of Finance, Minister of Foreign Affairs and ending up really serving people rather than being a civil servant.”
Emmanuel Tumusiime-Mutebil is serving his third term as the Governor of Bank of Uganda. In June 2011, he was quoted by the Financial Times News paper in a rare critic of President Museveni, saying Mr. Museveni continued embrace of “elements of Marxism” was undermining the economy. He says that the Ugandan government’s spending remains a serious problem.
“The biggest challenge is government spending. It’s not easy to keep the government’s spending in check, especially when you have every ministry wanting to spend left, right and center.”
Mutebile is cautiously optimistic about the discovery of oil in western Uganda, and says the resource could bring a relief to the struggling economy.
“When revenues start flowing, it will be a welcomed break from this period of no money. However, I must warn you that I don’t see this coming soon. The first oil in large quantities will not start flowing until about three years from now so we have three years to wait.

Mr. Mutebile has his critics in Uganda, some of whom are demanding his resignation following revelations that he authorized President Museveni to withdraw 744 million dollars to buy fighter jets and other hardware from Russia. Opposition lawmakers say the procurement required parliamentary approval.

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