The Inspector General of Government Irene Mulyagonja erred by insisting on investigating the operations of the Bank of Uganda, top lawyers in Uganda have revealed.
Mulyagonja on Thursday said she would continue with her investigations into the appointments of top staff at the central bank following a petition to her office, a move lawyers say will backfire.
“I think the Governor Bank of Uganda was badly advised,” said Mulyagonja.
“Tell him that I am not investigating issues of monetary policy. I am interested in administrative matters and the Central Bank cannot be excluded from such investigations taking into account section 8 of the Inspectorate of Government Act. Therefore, the investigations will go on and those appointed cannot take office for now,” she emphasised.
However, Mr Edgar Tabaro, one of Uganda’s finest constitutional lawyers, says Mulyagonja’s directive and insistence on probing the central bank, an independent financial institution, is ill-advised.
“The directive of the Inspectorate of Government had the impact of injunctive reliefs which are the preserve of the courts of judicature,” said Tabaro, who has taught constitutional law at several Ugandan universities.
“Moreover in the instant, an injection that reinstates or instates is what in law we call a positive injunction – a rare relief granted in exceptional circumstances,” he emphasised.
The Governor Bank of Uganda, Tumusiime Mutebile this week warned Mulyagonja against interfering in the running of the Central Bank, saying the institution cannot be subjected to any orders from anyone.
“We reiterate our previous position in our letter dated 6 March 2018, regarding the validity of the appointments but we must add that the Inspectorate does not have the mandate to give direction to the Bank of Uganda,” said Mutebile in a letter to Mulyagonja dated March 20.
Article 162 (2) of the Constitution provides that: “In performing its functions, the Bank of Uganda shall conform to this Constitution but shall not be subject to the direction or control of any person or authority”.
On the other hand, Mulyagonja asserts that the independence of the Bank of Uganda as established under Article 162 of the Constitution is “only guaranteed where the Bank is deemed to be acting in good faith and in accordance with the law, relevant provisions and policies and the principles of natural justice”.
Mutebile insists this is “incorrect as it purports to read the new provisions in a clear constitutional provision.”
Tabaro told ChimpReports that Mulyagonja’s actions are “are purely reliefs sought from court or select quasi judicial bodies such as Adjudication or Arbitration panels involving commercial contracts like construction. The directive to BOU clearly has the import of fettering its independence.”
Another prominent lawyer, who preferred anonymity to speak freely, said while the IGG can investigate alleged corruption and make recommendation and/or prosecute offenders, she must respect the independence of the central bank.
“Ultimately, yes, the Bank is answerable to the executive and legislature and they do effect that oversight by appointments of the Governor and his Deputy and representation on the Board but after that, it must be independent from institutions like the IGG in executing its goals and operations,” said the lawyer.
Observers say the fight between the Central Bank governor and IGG will be a good jurisprudential moot point as to the extent of independence envisaged under the Constitution.
“Does it exclude the bank from the oversight of the IGG or not? The courts may have to have the last word on this,” said a lawyer.
Mutebile warned Mulyagonja that the central bank’s independence is meant to ensure it remained “credible, decisive and ensure macro-economic stability and confidence in the market. This can only be achieved if the BoU is free from external influence, direction or control.”
He further reminded the IGG that this principle has been widely respected and has been followed by all institutions of government in the recent past.
“Neither His Excellency, the President nor the Parliament of Uganda have ever so brazenly directed the Board of Directors or the Governor in the manner set out in your letter,” said Mutebile, adding, “Even the Judiciary has been very careful to protect the independence of BoU.”