BoU multi-billion currency saga

The contract BoU entered with Oberthur demands that only the currency ordered by the central bank is carried on the chartered plane.

The Independent wrote to both the media teams of Kuehne+Nagel and the currency printer Oberthur Fudiciare. “Why were there other items on the plane that transported BoU cash?” The Independent asked.

But by press time the both had not responded. The Independent could not confirm reports that the courier had since apologised to BoU.

Insiders say it is highly unlikely such companies can enter a deal with private individuals to print extra cash and put their contracts with the national authority and their reputation at stake.

A BoU official also told The Independent there is no way individuals at the bank can carry out such a move and not be detected. It would require coordination across several departments and would leave a paper trail.

For BoU to order cash, the process starts with the Currency Department, which falls under the Operations Function headed by the Executive Director Operations—now Mary Katarikawa.

Such a requisition would have to be based on proper documentation showing the currency that has expired and needs to be replaced and the new currency required as a result of the growth of the economy.

This requisition would then have to be approved by a committee whose members are at Executive Directors’ level at BoU. After all this, the paper work would then go to the procurement department. This would handle the procurement process and order the cash.

Then the accounts department would come in to pay. And lastly, audit would also come in. Several senior BoU officials would have to be involved and this would leave a trail of paper work.

“From the information we have and the preliminary findings of the investigations no extra money was printed,” the official noted.

Two other institutions—Nakalema’s Unit and Uganda Revenue Authority—at the heart of the investigations have also noted that no extra cash was found in the extra five boxes.

Dickson Kateshumbwa, the URA Acting Commissioner General, said in a statement to journalists on Saturday June 15 that when a privately chartered plane arrived in April, and as normal practice for sensitive cargo, customs facilitated clearance of the currency at the tarmac in presence of BOU officials, aviation security, and other security agencies.

He explained that the consignment was then loaded on BOU vehicles and taken to Kampala with heavy security escort.  The extra cargo, which belonged to other individuals, companies and organisations, he added, was cleared after paying taxes.

Apparently, the cargo belonged to over 10 entities including organisations like the United Nations, USAID, and individuals like businessman Charles Mbire, the chairman MTN Uganda, Omar Mandela, the proprietor of City Oil fuel stations and Café Javas.

Nakalema has said that the focus of the investigation is how this extra cargo ended up on a plane that was supposed to carry only BoU cargo. The Independent could not verify reports that her unit had since contacted the courier Kuehne+Nagel to explain the circumstances under which this happened.

Despite these clarifications, however, the story appeared to take another twist with reports emerging that police had raided homes of officials at the centre of the controversy as part of an investigation into the alleged printing of unauthorised excess currency notes.

By press time, official Government Spokesperson, Ofwono Opondo had dismissed the statements attributed to police as “misleading”.

While currency dealings tend to be highly secretive, Uganda is not the first African country to get caught up in currency related controversies.

Last year, reports emerged that newly printed notes worth over $ 100 dollars had disappeared after arriving at the Freeport of Monrovia in Liberia.

Reports indicated that the government was trying to determine what happened to containers of Liberian dollars that were brought into the Liberia between 2016 and 2018 under the administration of Ellen Johnson Sirleaf.

Many countries like Liberia and Uganda, do not have their own currency mints because the business of printing money is too complex and extremely sensitive and expensive. It is only a handful of countries—China, U.S., India, France, UK, Canada, and a few others that print their own cash and have companies that print cash for other countries.

Until recently, the other evidence of risks involved in relying on providers in other countries to print cash was the Libya case of 2011 when at the height of the fight to overthrow the late Col. Muammar Gaddafi, the UK government withheld about £929 million, £140m of which had been printed by De La Rue, causing a banknote shortage in the country.

It is incidents like these that last year proponents of a deal in which government wanted to partner with a German company, Veridos Identity Solutions Group, to print currency in Uganda were citing. The deal’s backers included officials at the Finance Ministry.

However, Governor Mutebile opposed the move citing concerns the company was not a “known banknote/currency printing company” and the likelihood of “lapses in security causing leakages of printing materials or counterfeits”, which would put the economy at risk. Experts say he was right.

And eventually, when the deal was inked, the Investment minister Evelyn Anite, who signed the MoU, clarified that money printing, would not be part of the security printing deal.

This incident could, however, rearm those in favour of printing currency locally. BoU now faces the biggest challenge to prove that its suppliers are reliable and their activities do not endanger the economy.

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