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Bank of Uganda’s Mutebile: Time to exit?

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Mr Emmanuel Tumusiime Mutebile, the Bank of Uganda governor.

By Moses Kaketo

He is arguably one of the oldest serving governors. A day off at office is noticed by all and sundry. That is how Bank of Uganda governor, Prof. Emmanuel Tumusiime-Mutebile (“ETM” or “Mutebile”) has established himself at the central bank.

However, recent happenings point to his possible exit. The issue at hand now is the timing? Will he be let go before the elections or after?

The governor’s contract will be expiring in January 2016. There two are options: it is renewed before the end of 2015 or the process of finding a replacement is commenced as soon as possible. If the appointing authority chooses not to renew his contract, who will replace him and when? Will they keep him to handle the 2016 elections and then let him go? For going he must. But when? Keep in mind; this is not an ordinary man.

He has tried to ensure price stability and received several global accolades for balancing the economy and politics. That is not an easy feat. The challenge remains who can fit his shoes?

Mutebile joined BoU in January 2001. He was re-appointed for a second five year term in January of 2006. In November 2010, he was reappointed for the third year term – making him serve 15 years at the helm of Uganda’s banker of all banks. As the president seeks another term in office in 2016, will he reappoint ETM for the fourth term?
It is easy to see the incumbent’s achievements: his policies have been praised by all and sundry as spot on. The central bank’s primary roles is to ensure price and economy stability. For long, he has managed including the rough times of 2006 and 2011 elections, where a lot of money is said to have circulated in the economy.

Thanks to the Governors foresight, there was a removal of some “old” notes from the economy and things went level. 2016 is another test. Will he remain just to have this period through? At Summit Business, we don’t see government bringing another Governor just as 2016 elections pick momentum. If there are to be any changes, will come after the elections and the dust has settled. No one would want to bring a new governor or become a new governor at a time like this. Unless such a governor comes to only manage the 2016 election period and leave after. Here is to ETM’s name:

Growing the financial sector

The ETM is credited for growing the financial sector through effective regulatory regime. Under his tenure, the banking sector has grown to 26 banks, which meet the minimum capital requirement. Late 2010, BoU directed all commercial banks to raise their minimum capital requirement to Ugx. 10 billion ($4.34 m) by March 2011 to Ugx. 25 billion ($11M) by March 2013.

Statistics from Bank of Uganda show total banking assets increased from Ugx. 15.1 trillion (US $ 6.O8bn) in June 2012 to Ugx. 15.7 trillion (US$ 6.32 bn) in June 2013. Then hit Ugx. 18.6 trillion (US$6.695 bn) in June 2014.

That is phenomenal. Compare this to December 2009 statistics when total assets of commercial bank were estimated at just Ugx. 8.73 trillion.

By April 2011, bank branches in Uganda were 400 and total commercial bank assets were valued at Ugx. 11 trillion and employing over 8,500 people. By November 2012, the branches had reached 500. However, the banking sector largely remains in Kampala, with some districts like Lamwo, having no bank.

Reforms in the financial market

Bank of Uganda has focused on ensuring developed financial capital markets as platform for the mobilization of equity for indigenous enterprises to support economy.

In 2008, BoU introduced a five year Financial Markets Development Plan. This has seen some changes in the finance sector. The forex market, at present has four participants: Bank of Uganda, inter-bank market, Forex Bureaus and retail customers or end users of forex services.

On the other hand, domestic financial markets have seen tremendous growth. The market consists of securities market — here government securities are traded. In the treasury bills and treasury bonds market, there are treasury bill primary market, the treasury bills secondary market, treasury bond market and the treasury bond secondary market. Notwith-standing over 16 companies listed on Uganda Securities Exchange.

Inflation management

For a country that imports more than it exports and whose exports are mainly raw agricultural products, Mutebile deserves a pat on his back. In 2011 post the election time, the central bank managed to stabilize the economy following the inflation that followed the frenzy spending by politicians in the hunt for votes.

Inflation in Uganda has averaged 6.93 percent from early 2000. However, in October 2011, it reached an all time high of 30.48 percent. But it was managed, and today it hovers at just 4.9%!

This achievement could not go unnoticed. In 2013, Mutebile was named best Africa’s Central Bank Governor of the Year thanks to his leadership in fostering price stability, a key factor that boosted investor confidence in Uganda’s economy. The award was given to him at an annual International Monetary Fund and World Bank Group meeting in Washington.

The award is given by The African Investor, an Investment and Business Leader Award 2013 to governors and institutions which have turned around their economies. Outstanding performance is not new to ETM, whose works at World Bank were rewarded with a heavy send off and plaque that still hangs in his sitting room.

With these great milestones amid many challenges, a lot is expected from Mutebile’s successor. We need a governor who must ensure the independence of Central Bank. How many professionals are able to withstand pressure from politicians and remain standing?

A new chapter

Prof. Bategeka, formerly with Economic Research Centre believes there are dozens of qualified Ugandans to take over from Mutebile. ‘‘Already there are names flying around. These are qualified but I believe more Ugandans are out there,’’ he says.

Stephen Kaboyo, the Alpha Capital Market Boss, agrees but is quick to add; Mutebile has set high standards for the position of Central bank boss. ‘‘Mutebile’s performance makes him a giant in the region. He has outperformed on key mandate. His shoes are too big. In case the appointing authority does not renew his contract, the successor must be the right person,’’ he says.

A senior official at the Ministry of Finance who preferred to remain anonymous says given where Mutebile has brought this economy, the appointing authority need to be given time to ensure right candidate is appointed for the top job. “The position of Central Bank Governor needs someone who is qualified, high caliber, high integrity individual to match those of Mutebile, whilst, the economy risks going back to the dark days, if the selection process is not given the attention it deserves,’’ he says.

He adds: “the right candidate must be someone who has achieved something over the years. A candidate whose integrity is not questionable, someone whose management skills are beyond the ordinary – with ability to manage such a big institution.”

Analysts say, while there are a host of qualified Ugandans, the best candidate must be someone from within the bank – someone who has worked with the current governor, seen policies formulated reforms. Bringing someone from outside would need such person to go through the learning curve.

Besides, the technical competence, the job of Governor BoU is highly political. There are a number of other things to consider for post of Governor. Someone must have reputation of excellence and own conscience to face up to influence and remain to the bank strategy.

However, an official from Bank of Uganda sounded a caution.

‘‘If we are to realize Vision 2040 and may be become regional economic power house, issues of politics, religion, regional balance should be ignored in the selection of next governor.’’ His comment comes rumour that religion is likely to influence who becomes next governor, especially Catholics Vs Protestants. The president has always down played this and preached national unity. It is also being rumoured that a Muslim could this time take the day. It is said the current governor is said to have a say in selecting his successor. We are sure; he won’t allow someone who will destroy his legacy.

Mutebile’s tenure has had its own challenges. Currently the shilling is weak against the dollar. The worst is yet to come as we head into the likely intense 2016 elections. Remember the election 2011. There was reportedly a lot of printing of money not backed by production, and this left the economy in shambles: interest rates reached all time high 30%, banks suffered high bad loans and saw the foreclosure of many small businesses. If the new governor is to continue, he must be able to balance this period. Otherwise, his legacy risks a sudden death.

Either way, the economy must move on with or without ETM. Unfortunately, the odds are not in his favor. If he presides over the 2016 elections, he will leave before the term ends as the resultant inflation will be too much to bear. He will give an opportunity to the new person as the public will then be yearning for a saviour. If this is to happen, ETM must be willing to dance to the politicians’ music, which we see a risk too much for him to take. Why now? At his age, legacy could be more important than attaining political favor. And that is what makes this leadership change unpredictable.

Just as government did in Ministry of Finance by replacing Hon. Maria Kiwanuka with a politician, arguably to handle the 2016 process, this strategy could be deployed at BoU. A politician could be appointed temporarily and after the elections term or before it ends, he is changed.

This will one is a tough balancing act and let’s see the cards the appointing authority will show us at the end of the game.

About the author:

Moses Kaketo works with Summit Business Review Magazine, holds a Master’s Degree in Business Administration from Uganda Management Institute, A professional diploma in marketing (CIM) and bachelor’s degree in Education. He sees business in everything. He loves writing business news, reviews and analyses.

Twitter: @mkaketo

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Cab driver wins big in MoMo Nyabo promo, to invest in fish business

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Ayebale Ismail who won Ugx 4.2 million in MoMo Nyabo promo is going to invest his cash prize in Fish business.

Ayebale Ismail who won Ugx 4.2 million in MoMo Nyabo promo is going to invest his cash prize in Fish business.

By Our Reporter

Through its promotion dubbed MoMo Nyabo Together, MTN Uganda is giving out up to Ugx 5,000,000 shillings to two winners every weekday in a bid to support Ugandans as they rebuild from the financial devastations caused by the COVID-19 pandemic.

Among the recent lucky winners is 34-year-old Ismail Ayebale, an airport taxi driver walked away with Ugx 4,200,000 shillings. The airport cab driver who has been out of business since the closure of the airport was overjoyed to learn that he had been chosen as a lucky winner in the on-going MTN MoMoNyabo Together promotion.

Due to his Covid 19-induced unemployment, Ayebale became a fish vendor to support his family. The young man that lives next to Lake Victoria in Entebbe buys fish from various fishermen and later on dresses and sells it to people in Kampala at a profit, to make ends meet for his family.

“Life has not been the same, the money I earn now is nothing compared to what I would make before the COVID pandemic,” Ayebale said as he narrated how tough the times have been for the past five months.

The MTN Marketing Coordinator for Central Region, Jimmy Ssempuuma congratulated Ayebale while handing over his cheque of Ugx 4,200,000 shillings. He empahises MTN’s commitment to supporting its customers though such promotions.

Ayebale chose to share the money he won with his mother Margret Nyakaisiki. An excited Nyakaisiki over a phone conversation ululated as she vehemently thanked MTN Uganda for giving back to her son who in turn shared with her.

Ayebale noted that he had always heard about the MoMoNyabo campaign but always thought it was a hoax since he had never won. He however confirmed in the presence of his family that having been named a lucky winner, he is now a strong believer of the MoMoNyabo Together promotion.

To take part in the promotion that was launched last month, MTN customers simply use the MyMTN app or dial *165# to buy data or airtime as well as paying for many other services using Mobile Money.

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MTN MoMo: Your One-stop Payment Point

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By Our Reporter 

In March 2009, MTN became the first telecom operator in Uganda to launch a mobile financial service that would revolutionize the country’s financial fabric. More than a decade later, the service has evolved into a one-stop financial transaction point that is championing financial inclusion across the spectrum as it transforms the country into a cashless economy.

From the most basic feature of sending and receiving money, to performing simple tasks such as buying airtime and data in the comfort of your home or paying bills and school fees, you can now transact across the borders as well as pay taxes to the Uganda Revenue Authority, make Kampala City Council Authority Payments and make donations and so many other payments on your phone using MTN MoMo.

According to Stephen Mutana, the General Manager Mobile Financial Services at MTN Uganda, paying for goods and services is easy, safe and convenient when you keep some money on MTN MoMo.

He added that, “the experience of using MTN MoMo has been made even better with the MyMTN app.”

The MyMTN app is available and can be downloaded from both android and iOS app stores.

To ease the payment for goods and services, MTN Uganda launched MoMoPay, a digital payment platform that allows customers to pay for goods and services directly from their Mobile Money accounts, free of charge without having to withdraw it first.

Caroline Nakato, an ardent user of the MoMoPay service says that the payment method has simplified her life.

“I don’t have to stress with going to the bank to withdraw cash and carrying it around for shopping or paying for certain services. All I have to do is transfer it to my MoMo account and off I go. It saves me time yet it is safe secure and always available. Even when I lost my phone, my PIN number keeps my money safe,” says Nakato.

MTN MoMoPay is available in several supermarkets, shops, pharmacies, hospitals and all MTN Service Centers in towns across the country, meaning that even when one travels upcountry, they can still access the service.

Online Shopping with MTN MoMo

Another exciting innovation for people who love online shopping is perhaps, the MTN MoMocard. MTN in partnership with Mastercard offers customers the ability to make online payments using a virtual card known as the MTN MoMocard. The payments are made from the customer’s MTN MoMo account.

To enjoy this service, simply dial *165*70# and select option 1 (Create MTN
MoMocard). You will be prompted to enter your MTN MoMo PIN. The MTN MoMocard details are sent to the customer via SMS message. It costs UGX 1,000 shillings only to create the MTN MoMocard for a transaction.

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Airtel Uganda opens online shop

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Airtel Uganda Managing Director Mr. V.G. Somasekhar addresses guests during a business breakfast held recently

Airtel Uganda Managing Director Mr. V.G. Somasekhar

By Our Reporter

Airtel Uganda has launched an online shop on its website that will enable customers conveniently, quickly and safely order for devices.

The platform that is now live, provides customers a wide range of devices to include; the 4G Pocket WIFI/MIFI, WIFI Indoor Router, a pair of Broadband Outdoor and Indoor Unit and My First 4G Smartphone.

Commenting on the launch, the Airtel Uganda Managing Director V.G. Somasekhar said; “We are excited to launch this platform that will provide Airtel customers with an easy, quick and safe way to purchase our products. We strongly believe in putting our customer at the centre of everything we do. With this objective in mind, we continue to introduce digital innovations and make improvements to our processes that have put our customers in greater control of their overall telecoms experience.”

With the Airtel Online Shop, all the customer needs is internet. Through this platform, customers will be able to connect with the Airtel Broadband team which will follow up on their orders and then supply the devices they have ordered for.

“During such crucial times, it is vital for us to continuously think about our customers’ health and safety. As part of our post Covid-19 strategy, all the products will be delivered with all safety precautions like sanitation of packages and cashless payment,” the General Manager-Broadband, Brenden Kachenje said.

To make a purchase, customers will have to visit the Airtel Uganda website and navigate to the Broadband tab from where they will choose their preferred device and click the Order Now button. They will then have to fill in contact details to complete their order.

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How the MTN MoMo Nyabo promo is changing lives amidst the COVID-19 pandemic

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Betty Nanfuka and her husband jubilate after receiving their money won in MTN MoMo Nyabo promo.

Betty Nanfuka and her husband jubilate after receiving their money won in MTN MoMo Nyabo promo.

By Our Reporter 

The economic and financial constraints caused by COVID-19 have been felt by many people in Uganda. However, telecom giant, MTN Uganda through its MTN MoMo Nyabo Together Promotion, is restoring lives in ways unimaginable.

Betty Nanfuka, 54, from Buwama in Masaka district, won herself 5,000,000 Uganda shillings. Nanfuka refused to believe that she had won till she received the actual MTN team at her residence in Buwama.

The mother of twelve and grandmother of ten danced and jubilated while welcoming the MTN team to her residence in Buwama.

Nanfuka said she would use the money she has won to finally build a permanent structure; “I intend to immediately buy iron sheets so that I can build my dream home. With the rest of the money I will be able to invest in farming as I already had a nursery bed for my tomatoes.”

A security conscious Nanfuka narrated how she later on had to inquire from the area chairman of Sango sub county if indeed MTN had an ongoing promotion since she does not have a television set and barely uses her radio. After confirming the truth, an overly excited Nanfuka even failed to sleep as she resorted to praying the rosary since it all felt like a dream to her.

Nanfuka has been a loyal client to the MTN brand especially its mobile money service that she uses to pay for Ready Pay solar.

Nanfuka chose her husband Leonard Kawuma as her beneficiary; “He knows how far we have come,” she said, in reference to her husband as they danced together.

Kawuma received 2,000,000 Uganda shillings as his wife received 3,000,000 Uganda shillings.

Amidst the global COVID-19 pandemic, one’s worst nightmare would be falling sick of either COVID-19 itself or any other ailment. As many struggle to afford feeding and accommodation bills, the last bill one would want to incur is a medical bill.

Despite all the financial challenges that came with the pandemic, Nalongo Kevin Namagembe a resident of Kikoni had accumulated medical bills that had stripped her of all her finances yet she still had more medical bills to meet. Namagembe who is a Manager at Intertrade Global Eastern region stationed in Malaba has not been able to resume work because of her health complications.

Nalongo Kevin Namagembe from Makerere-Kikoni won Ugx 4.2 million from the MTN MoMo Nyabo Promotion

Nalongo Kevin Namagembe won Ugx 4.2 million from the MTN MoMo Nyabo Promotion

Fortunately, she won Ugx 4,200,000 shillings in the on-going MTN MoMo Nyabo Promotion and with this money, she will be able to treat her hand that was paralyzed by the illness.

During the lockdown Namagembe used up all she had whilst footing her medical bills: “Transport alone was expensive as I was normally charged 25,000 to get to Mulago from Makerere-Kikoni,” she said. Namagembe thanked God for not forsaking her and using MTN to bless her at a time she needed it the most.

Namagembe further said that her health was her major priority and she would use the money she had won to pay for her therapy as well as purchase the different medications she had been advised to buy.

“I can now breathe. I am now able to afford the natural remedies my nutritionist had recommended as well all the medicine I need.” Said a happy Namagembe. She shared the money with her father, Matthew Mukasa Ssentamu.

Apart from the 2 daily winners of up to UGX 5,000,000, 250 people win 50,000 shillings directly every day. All you have to do is pay using MTN MoMo and stand a chance to win.

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