David Bahati, the State Minister for Finance has revealed that Bank of Uganda has been making losses amounting to Shs 2 trillion over the past 13 years.
Bahati made the revelation while appearing before Parliament after he was asked by Kenneth Lubogo the Bulamogi MP to divulge the profits and losses made by BoU over the last 15 years.
Bahati said that BoU last made profits of Shs40 billion that were registered in 2007. He added that the money was remitted to the Consolidated Fund Account as required by the Bank of Uganda Act.
Richard Othieno, the West Budama North MP tasked Bahati to explain how BoU made losses yet it trades in securities.
“The bank truly trades in securities but it invests in monetary policies that involve making losses; these are the facts on the ground; we cannot do anything about it because a loss is a loss,” Bahati responded.
Central banks worldwide invest in securities hoping to make profits to offset national revenue needs by beefing up the Consolidated Fund Account, but unpredictability and volatility of the securities market puts central banks at risk of always making losses.
