Museveni looks for new BoU governor

Brief profiles of the candidates to replace Mutebile at BoU

Despite his many weaknesses, BoU Governor Tumusiime Mutebile’s shoes might be too big for many.

Museveni’s decision to seek to replace him comes at a very critical time for Uganda’s economy. Tough decisions need to be made and, insiders say, Museveni needs a governor who can say it straight. Mutebile is a straight talker.

Sebastian Mallaby, in his book ‘The World’s Banker: A story of Failed States, Financial Crises, and the Wealth and Poverty of Nations’, described Mutebile as “ the chief architect of Uganda’s success story and the greatest contributor to Africa’s struggle against poverty in his generation.”

Profiling Mutebile, Mallaby treated Mutebile as a man of equal caliber to the book’s main subject, then World Bank President James Wolfensohn.

Mallaby said because of Mutebile, by the end of 1986, President Museveni had yielded to the IMF and World Bank economic reform policies of structural adjustment, stabilisation, liberalisation and privatisation – leading to one of the most dramatic transformations not only of an ailing economy, but also of the World Bank’s engagement with developing countries.

As the search for new governor heats up, insiders have been mulling over the qualities of those in the running and pointing at what Museveni and his handlers will need to consider. Many say Museveni needs the counsel of some of the biggest brains in central banking. He also must get someone with “guts” and “some management abilities”. That position was pushed by Paul Volcker (former chairman U.S. Federal Reserve).

According to The Economist, sometime in 2008, Volcker, Stan Fischer (Bank of Israel governor), and Jacob Frenkel (Fischer’s successor) discussed the most essential trait of a central bank head at a conference. Fischer and Frankel agreed that having an economics PhD was a plus.

But a 2016 paper titled `How Do Central Bank Governors Matter? Regulation and the Financial Sector’, by Prachi Mishra and Ariell Reshef, concluded that past work experience was critical as it shapes central bankers’ beliefs and preferences, which, in turn, are consequential for policy outcomes. So how do the candidates measure up?

Deputy Governor Louis Kasekende

In the current race, Deputy Governor Louis Kasekende should be paces ahead.

Quite young and agile at 59, Kasekende, has been seen as the natural successor to Mutebile.

The economist rose through the ranks to become the Director of Research, Executive Director of Research, and Policy and finally DG.

From May 2006 to 2009, he served at the offices of the African Development Bank (AfDB) as Chief Economist.