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Tension from plan to extend Museveni's rule in Uganda hurts local currency- c.bank
October 25, 2017 / 1:20 PM / a month ago

Tension from plan to extend Museveni's rule in Uganda hurts local currency- c.bank

KAMPALA, Oct 25 (Reuters) - Political tension spurred by a plan to extend Ugandan leader Yoweri Museveni’s rule is fuelling depreciation pressure on the local currency, the shilling , a central bank official told Reuters on Wednesday.

After months of relative stability, the shilling has been posting losses in recent days. On Wednesday it traded around 3,655 against the dollar, compared to an opening level of 3,600 on Oct. 3 when the legislative proposal was brought to parliament.

Adam Mugume, the central Bank of Uganda’s executive director for research and a member of the bank’s monetary policy committee, told Reuters in an interview the violence spurred by the plan was creating anxiety among investors.

“We can’t deny ... if you are an outsider and you see members of parliament throwing chairs at each other, does that give you an incentive to hold your money here?” Mugume said, referring to a fight in parliament over the planned legislation.

“That creates a lot of anxiety.”

Museveni, 73, is barred from standing again at the next polls in 2021 because the existing constitution places an age ceiling of 75 years for presidential candidates.

He’s already one of Africa’s longest-serving presidents after ruling the East African country for 31 years.

Museveni is backing a bill introduced in parliament by a private member that seeks to scrap the age cap - a move which critics say effectively clears the way for him to be president for life.

But the measure has met with broad resistance from opposition and rights activists, some members of the ruling party, religious leaders and other sections of the public.

Protests against the move have erupted in different parts of the country, drawing a crackdown by security personnel who have used teargas and live bullets on demonstrators.

At least two people have been killed while dozens have been arrested.

A brawl involving chair-throwing and an exchange of blows broke out in the parliamentary chamber on two consecutive days as MPs opposed to the measure fought against those supporting it and security personnel.

Mugume said the tensions generated by the proposed legislation was “bad news that also adds to the speculative behaviour and then you have a sharp (shilling) movement.”

Reporting by Elias Biryabarema; Editing by Richard Balmforth

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