BoU multi-billion currency saga

What went wrong?

Kampala, Uganda | HAGGAI MATSIKO | “This is a serious issue,” muttered Bank of Uganda Governor Tumusiime Mutebile when he heard about at it.

A plane chartered to transport new currency notes to Uganda from France had on April 27 landed at Entebbe Airport with cargo not tallying with the expected central bank order.

Mutebile was in a meeting in his office on May 03 but details remain scanty as officials at BoU are tight-lipped given the sensitivity of the matter.

Mutebile immediately decided to act. Sources say he called Edith Nakalema, the head of the State House Anti-Corruption Unit (ACU).  He wanted her team to investigate the events of April 27. Mutebile followed up later with a letter on May 08.

“The Governor wanted to be sure what was contained in the other boxes was not currency and the circumstances under which it had ended up on a plane that was chattered to carry only BoU cargo,” a source close to the investigations told The Independent.

In turn, Nakalema informed President Yoweri Museveni who gave her a green light to get to the bottom of the issue. “I don’t want to hear anything in the media,” President Museveni reportedly sternly added.

A lot was at stake as the saga involved Bank of Uganda, hundreds of billions of shillings, and two of the world’s biggest companies in the business of security and currency printing, and logistics.

Because money wears out and the economy grows, BoU regularly orders fresh bank notes from its various suppliers. Some of these include; De La Rue, which is based in the United Kingdom; Giesecke & Devrient based in Lipzig Germany; and Oberthur Fudiciaire from France. The trio is amongst the best in the small and highly sensitive industry of security and currency printing.

Sometime last year, BoU requested Oberthur Fudiciare, which prints only two of Uganda’s bank notes, to print an undisclosed amount of notes. As part of its long running contract with BoU, Oberthur was to deliver these at Entebbe on April 27.

BoU had sent a team as normally happens to witness the loading of this cash in France. This team was comprised of the head of currency Mbale and the head of currency Kabale BoU branches. They arrived before the cargo and both headed to their workstations.

Previously, The Independent understands that this team used to travel on the same plane as the cash. However, the central bank changed policy. The BoU staff that inspects the cash travels on passenger planes. The cash travels on a cargo plane.

As part of its long running contract with Oberthur to print and deliver cash, BoU locked in the world’s best logistics company—Kuehne+Nagel. Founded in 1890, Kuehne+Nagel has some 1,300 offices in over 100 countries, with around 82,000 employees, according to its website.

So, when Kuene + Nagel cargo plane landed at Entebbe on April 27, many expected all to be well. It was supposed to be carrying only exactly 20 pallets of freshly printed cash from Oberthur Fudiciare. These contained the cash BoU had ordered and expected to be invoiced for. (Indeed, while dispelling claims extra cash was delivered at Entebbe, a BoU official said that the central bank has been invoiced for exactly what they ordered).

However, problems started emerging when a BoU team led by a one Milton Baruku, which came to the airport to receive the cash, discovered that there were five extra boxes also, which looked similar as the 20 they were supposed to receive. They signed for only the 20 and said that is all they expected.

But it appears once they returned to the central bank, no one mentioned a thing because it was not until May 03 that the Governor got to know.

Mary Katarikawe, the Executive Director Operations at BoU, while appearing on Radio One’s prime talk show, Spectrum, on June 17 said that the Acting Director Currency discovered the anomaly and there were internal preliminary investigations before the BoU management asked Nakalema to come in. By now, a week had elapsed. And stakes were high.

Could the five other boxes have contained extra cash? If they did, who had ordered that cash and where was it? These were some the biggest questions.

A memo seen by The Independent about the matter detailed what exactly BoU had ordered for. The Independent has withheld these details because it could not ascertain their veracity and also because of the sensitivity of the matter.

A senior official at BoU, who only accepted to comment on conditions of anonymity said from the preliminary findings of their investigations, the issue boils down to neglect of responsibility by the courier and BoU staff who failed to report the “anomaly” when they discovered it in France and later at Entebbe.

These were two separate teams—the one that went to France and the one that went to Entebbe. How could they both make the same mistake?

A desire to answer these questions seems to have resulted into the arrest of eight BoU officials from the central bank premises on June.12, a day before the reading of the national budget. Up until this time, both BoU and the Nakalema team had managed to keep the investigation under wraps for a cool one and a half months.

Away from the BoU team, the other question was; how could two international companies stake their reputations over only a few million dollars? Two figures have been reported in press reports as the likely extra cash that was printed—Shs90 billion ($24 million) and Shs200 billion ($54 million).