Deputy Governor Michael Atingi-Ego is said to have failed to stamp his authority on the institution, which had been headed by the late Prof. Emmanuel Tumusiime Mutebile, an economist with a no-holds-barred attitude to addressing the Central Bank's duties and administrative operations.
According to industry insiders, Dr. Atingi-Ego lacks the essential talents, such as personal fortitude and leadership skills, to lead the country's economic recovery from a succession of economic downturns, including the COVID-19 catastrophe.
The Bank of Uganda (BoU) has since hiked the Central Bank Rate (CBR) by another percentage point to 8.5 percent.
This prompted commercial banks to hike interest rates for borrowers, a move that has perplexed financial analysts in the past.
Dr. Atingi-Ego has defended his policies, claiming that the hike was required to stabilise inflation, but industry experts and borrowers have subsequently slammed the Central Bank, accusing it of jeopardising the already catastrophic climate, particularly for small enterprises.
"Remember that when local firms are afraid to borrow from banks due to rising interest rates, output would be low, resulting in less tax income collected by the Uganda Revenue Authority (URA) at the end of the day." And some banks are losing business as a result of the BoU's claim to be managing inflation," a leading economist stated, adding:
"We also know that BoU is a supporter of the concept that the government should not subsidise commodities such as petrol, saying that it is not long-term viable." Atingi has expressed this viewpoint in recent forums in which he has participated. "Who should safeguard Ugandan residents from the excessive costs of petrol and other critical commodities?" asks Atingi. We know that other governments in the EAC, to which Ugandans belong, have subsidised gasoline, knowing how crucial it is to the economy.
"Does Atingi and other anti-subsidization activists realise that some people have parked their cars at home because they can't afford petrol, for example?"
Other economists have criticised the acting governor, reminding him that the Finance Ministry had already sent less money to government ministries, departments, and agencies for the first quarter of Fiscal Year 2022/23, and that his containment measures, such as raising the CBR, were "absolutely unnecessary."
"This implies that the average man will be unable to have the government acquire all of his products and services, since government agencies will be careful about spending due to the limited funds available."
The Ministry of Finance cut cash flows to institutions and local governments by more than Shs4 trillion last week, a decision described by Finance Permanent Secretary Ramathan Ggoobi as a response to increased commodity prices.
The first quarter was scheduled to see the discharge of UGX8 trillion.
On Wednesday, July 27, 2022, another industry insider informed this website that the interim BoU governor had since failed to devise new techniques of overseeing commercial banks and was still reliant on Prof. Mutebile's template.
"We know that the BoU's regulatory function under Mutebile was ineffective since some banks failed while others were arbitrarily closed—Crane Bank Limited, National Bank of Commercial, and Global Trust Bank Uganda are all now extinct," a leading economist remarked.
Prof. Mutebile confessed in 2019 that his tactics were ineffective and had resulted in bank bankruptcy or collapse.
Financial analysts in the nation recently said that Afriland's withdrawal from the Ugandan market demonstrated BoU's vulnerability.
According to them, BoU is intended to guarantee that banks continue to operate in the nation since they contribute to tax income, direct and indirect job creation, and lending to people and governments, yet Dr. Atingi showed no sorrow when Afriland Bank recently quit Uganda.
"What additional safeguards has he (Atingi) put in place to guarantee that Uganda does not lose any more banks?" queried a retired financial expert who used to work for the government.
Similarly, some economists are perplexed as to why Dr. Atingi intends to manage certain SACCOs while commercial banks continue to have supervisory concerns.
They claim that Dr. Atingi and other government officials now seek to extinguish the spirit of SACCO members who have been surviving by doing things their own way.
Big SACCOS such as Wazalendo, EXODUS SACCO, and others are upset that BoU wants to control them because they were previously under the Uganda Microfinance Regulatory Authority (UMRA), which, according to some sources, is about to be scrapped by the government despite its importance in dealing with SACCOs.
"What does BoU need of us?" We've been living without their help for years, and we're becoming stronger. "Let them focus on banks," remarked an official of one of western Uganda's largest SACCOs.
He said that BoU's desire to regulate SACCOs would result in bad business since borrowing terms and circumstances are likely to alter, forcing poor people into poverty. "As SACCOs, we have a manner of doing business. "We are concerned that BoU would destroy our systems," he stated.
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