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BoU-COSASE PROBE: Parliament did its work, Executive should act on our recommendations- Kadaga

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Kadaga, says there is need for the executive arm to both expedite the supply of the relevant laws to parliament and act on parliament's recommendations

The Speaker of Parliament, Rt Hon. Rebecca Alitwala Kadaga has implored the executive arm of government to expedite bills to reform several aspects governing the banking industry and the running of Bank of Uganda, as recommended by Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (COSASE).

In an exclusive interview with CEO East Africa Magazine, Rt Hon Kadaga said that Parliament had done its job of investigation and making recommendations and it was now up to the executive to introduce the necessary amendments to the existing laws.

“Most of the recommendations/resolutions passed are advisory, so the Executive has the obligation to implement them. For instance the probe on Bank of Uganda, most of the recommendations require amendments to the current Act (s). The Executive has to expedite this process for most of these recommendations to be put into action,” Kadaga told this reporter.

LEFT -RIGHT: AG John Muwanga, BoU Deputy Governor Louis Kasekenda and Speaker Rebecca Kadaga. The Speaker has said that following a satisfactory job on probing BoU, it was now up to the Executive to introduce the relevant bills to Parliament to bring alive the recommendations.

Kadaga’s comments come on the heels of a recent statement by the Inspector General of Government (IGG), Mrs Irene Mulyagonja Kakooza, that her office would not investigate the named officials in the COSASE probe, as Parliament had not explicitly asked her office to do so. 

Kadaga, also expressed dissatisfaction and frustration at the executive’s speed in responding to Parliament’s recommendations especially in dealing with accountability issues.

“I think there is a gap because if we investigate and make recommendations, we cannot direct them (IGG); it is the government to say we are going to do A,B,C and D, that is why I was saying that they (executive) are supposed to come back in six months to say that on recommendation this, we have sacked so and so and on this recommendation, we are prosecuting so and so; on this one we have got a conviction and they have not done that,” she said.

“Parliament cannot be prosecutors and also the judge, so that is where the limitation is; it is very frustrating for us,” she said.

Amend Financial Institutions and Bank of Uganda Acts

The COSASE probe into the irregular closures of seven (7) defunct banks made a number of significant recommendations covering the management of troubled financial institutions as well as governance at Bank of Uganda.

Over and above recommending that the named BoU officials be held liable for their respective negligent acts, COSASE also recommended that article 161 (4), that provides that the Governor and deputy Governor shall be Chairperson and Vice Chairperson of the BoU Board respectively, be amended.

“Good corporate governance principles would require that the position of Chairperson and vice Chairperson of the Board is separated from the position of Chief Executive Officer and his Deputy,” said the COSASE MPs, arguing that this was necessary to “protect objectivity of the Board and its independence from management.”

“Separation of these two positions is generally regarded as good practice, as it can help to achieve an appropriate balance of power, increase accountability and improve the Board’s capacity for decision making independent of management. It is the recommendation of this committee therefore, that article 161 (4) be reviewed to separate the offices of the leadership of the Board and top management of BoU,” read the COSASE report.

The MPs also recommended for a specific amendment of the Financial Institutions Act, 2004 to “make a specific provision for the timelines of undertaking all the activities related to and connected with resolution of financial institutions.”

Relatedly, they also said that the BoU board, “in consultation with the Minister of Finance, Planning and Economic Development should by statutory instrument, in not more than six months issue procedures and guidelines under FIA, 2004 on the resolution of financial institutions in distress.”

They also recommended that the role of resolving of financial institutions in distress be moved from the BoU supervision department, to another department.

“It is recommended that the mandate of resolving financial institutions in distress be independent of the bank supervision function. This would mitigate the risk of conflict of interest,” observed and recommended the MPs.

“We are waiting for action from the executive,” Kadaga said.

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Finance

EXCLUSIVE: Oberthur, the French money printer named in BoU currency scandal is serving a 30-months World Bank ban over corruption

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SCANDAL AFTER SCANDAL: Bank of Uganda Governor, Professor Emmanuel Tumusiime Mutebile and his Deputy, Dr. Louis Kasekende have increasingly come under public scrutiny with scandal after scandal in the last 3 years- the latest being the mismanagement of currency printing with a possibility of several billions missing.

Oberthur Technologies SA (Oberthur), the French digital security company at the centre of what is now unfolding to be a currency printing scandal is serving a 2.5 year ban by the World Bank and its partner agencies over corruption related scandals.

According to a report by The Independent Magazine, in Kampala, it is Oberthur who chartered the Kuehne & Nagel cargo plane but failed to guarantee the contractual exclusivity owed to Bank of Uganda. Additional reports and police sources however, indicate investigations have now been widened to include printing of “non-official but genuine currency notes” which could only have been done, by Oberthur.

This further raises questions whether BoU did enough due diligence about Oberthur before awarding them the deal to print the country’s currency notes or if indeed BoU deliberately awarded the deal to Oberthur, well aware of their reputational gaps, which it sought to take advantage of.

Government spokesperson, Ofwono Opondo addresses media on June 14th regarding the BoU currency notes scandal. His version of events, has now come under question following a Uganda Police press conference today

According to investigations by CEO East Africa Magazine, under a deal reached in November 2017, with World Bank Group, Oberthur cannot participate in any World Bank funded project until May 2020, over what World Bank calls “corrupt and collusive practices under the Identification System for Enhancing Access to Services Project (IDEA), a project designed to establish a secure, accurate and reliable national ID system in the People’s Republic of Bangladesh.”

The sanction according to a November 30th 2017 statement from World Bank, was “part of a Negotiated Resolution Agreement (NRA) following the company’s acknowledgment of improper payments to a sub-contractor and collusive misconduct to obtain and modify bid specifications to narrow competition and secure the award of the contract.

Oberthur voluntarily acknowledged the misconduct and promised to “carry out corrective action, including an internal investigation, while holding individuals connected with the misconduct accountable,” according to the World Bank statement.

Under the terms of the NRA, Oberthur will not be eligible for any World Bank-financed contracts for the length of the sanction.  

The banning of Oberthur also disqualifies it from also participating in other projects funded by several Multilateral Development Banks (MDBs) party to the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010. 

Yann Delabrière the Idemia CEO. Idemia is the mother company of Oberthur, which is serving a 30 months ban from participating in World Bank funded projects over corruption.

The MDBs are: the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group and World Bank Group. The above MDBs are also members to the International Financial Institutions Anti-Corruption Task Force and the Uniform Framework for Preventing and Combating Fraud and Corruption.

Did Oberthur collude with BoU officials to print extra currency notes?

This discovery now raises serious reputation issues with the French firm, especially amidst, a Uganda Police statement, that police is now looking into allegations that there was unauthorised printing of currency notes.

The statement by Uganda Police spokesperson, Fred Enanga, sharply contrasts that made by the government spokesperson and Executive Director of the government’s Uganda Media Centre, Ofwono Opondo on June 14th 2019. Although Opondo confirmed there was a currency related investigation going on, he refuted media reports from an anonymous whistle-blower that UGX90 billion had been ordered, printed and imported into the country via the now infamous ‘money plane,’ and diverted by Bank of Uganda officials.

Lt. Col. Edith Nakalema, the head of the Statehouse Anti-Corruption Unit (ACU)

In a media interview yesterday, June 17th 2019 with Daily Monitor,  Lt. Col. Edith Nakalema, the head of the Statehouse Anti-Corruption Unit (ACU) also denied there was any money missing, only for Enanga to drop a bombshell- minutes later at a press conference. 

Enanga, told media that the case regarding what he called “irregularities surrounding a consignment of monies that were printed and the related supply chain” will now be “effectively supervised by the Director of Criminal investigations, i.e. AIGP Akullo Grace” who is “proceeding with lines of questioning on how the banking process supported the printing of the bank notes, whether there was any wrong doing on the part of the bank or not.”

He did not say why, Lt. Col. Edith Nakalema who was the initial lead person on the case has been removed from supervising the case.

Enanga said that several statements have been taken from “directors, managers and employees, with knowledge on the whole documentation process” with a view to “knowing how the need for the printing of the notes arose, who initiated the request, whether there was approval from the board, the amounts involved, serial numbers of the notes that were printed and how the none official but genuine notes could have arose.”

He hwoever did not mention much about the said “none-official but genuine notes.”

Some of the BoU officials from whom statements have been taken, according to Enanga, include the director for banking, director legal and auditors. Also additional statements were taken from ENHAS, Uganda Revenue Authority (URA) customs officials and that “further arrangements to get statements from lawyers of UN and the business persons mentioned in the story” were ongoing.

Uganda Police Spokesperson, Fred Enanga

Daily Monitor, a leading independent daily has now reported that that a police raid on the home of six senior officials of Bank of Uganda has “recovered documents which suggest printing of unauthorised notes.”

Mixed statements from government agencies: who is fooling who?

Since the scandal broke, there has been multiple statements from several arms of government involved in the scandal- either as suspects or investigators.

Lt. Col. Edith Nakalema’s State House Anti-Corruption Unit which made the first statement called it a “special investigation on a matter pertaining to the Bank’s procurement and supply chain activities” while a statement by Bank of Uganda Governor, issued hours after Nakalema’s called it “an anomaly in the inventory of the expected consignment.”

A few hours later, Ofwono Opondo, the government spokesperson, was on record saying there was no money missing as alleged by the initial whistle-blower, but rather, there as a case of unauthorised cargo on the supposed-to-be exclusive chartered currency plane.

The next day, Uganda Revenue Authority which had been severally mentioned in previous statements, issued a sharply worded statement of their own, saying that: “It is not the responsibility of URA customs to concern itself in logistical arrangements of importers or exporters” and urged Bank of Uganda not to drag URA into logistical contractual failures or mistakes of BOU and their service provider.”

Meanwhile, it was reported today on NBSTV that Bank of Uganda has rejected an apology from the owners of the plane that suspiciously carried unidentified cargo on a chartered flight by the Central Bank pending investigations into what went wrong.

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WHO Director General visits Uganda to assess Ebola response

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Uganda Minister of Health, Hon. Dr. Jane Ruth Aceng receives the World Health Organization (WHO) Director General, Dr. Tedros Adhanom Ghebreyesus, with a trademark no-handshake greeting. Looking on is Dr Yonas Tegyn the WHO Country Representative to Uganda.

World Health Organization (WHO) Director General, Dr. Tedros Adhanom Ghebreyesus, is in the country to assess Uganda’s response to the current Ebola outbreak in Kasese District, Western Uganda. 

Kasese is one of 127 Ugandan districts, located in western Uganda and 400km away from the capital, Kampala.

Dr. Tedros made a stopover in Uganda while on his way from the Democratic Republic of Congo (DRC) where he visited the Ebola hotspots, Butembo and Katwa. This is his third visit to Uganda since the Ebola outbreak was declared in August 2018 in DRC.

He was received by the Minister of Health, Hon. Dr. Jane Ruth Aceng and her technical teams, Mrs Rosa Malango the UN Resident Representative, Dr Yonas Tegyn the WHO Country Representative to Uganda and Dr Lisa Nelson, the Centers for Disease Control and Prevention (CDC) Director in Uganda, yesterday at Protea Hotel in Entebbe at 7:00PM.

In his remarks, Dr. Tedros pledged continued support to Uganda to contain this outbreak. “From our side, I would like to pledge that we will continue mobilizing global and regional support to control this outbreak as soon as possible. It is not clean until the outbreak in DRC is finished”

Dr Tedros commented on the seemingly declining trends in Butembo and Katwa. He said, “There appears to be a decline in Butembo and Katwa areas. However, in my discussions with my colleagues, we agreed to be very careful with optimism but very cautious optimism because the Ebola situation in DRC has been very unpredictable with up and down trends.

He further said that Mabalako where the Ebola outbreak was first confirmed in August 2018 has once again become a hot bed of new infections.

“Mabalako is now the hottest place where cases actually came from to Uganda” Dr Tedros noted. 

Dr. Tedros explained that “I have accepted the assessment of the WHO Emergency Committee that although the Ebola outbreak in DRC is an emergency in the country and the region, it does not currently constitute a Public Health Emergency of International Concern (PHEIC).”

He also revealed that in December 2018, WHO requested international pharmaceuticals giant, MERCK to produce more doses of the ‘Ebola-rVSV’ vaccine, to continue supporting the outbreak.

In her remarks, the Minister of Health, Hon. Dr. Jane Ruth Aceng said that, the transition from a preparedness mode to a response mode was not difficult given that Ministry of Health and partners had invested heavily in ten months of preparations to handle any eventualities. However, she said, “The challenge is that we now have to again mobilize resources for the response phase.”

She appreciated the WHO for the support with the Ebola vaccines during the preparedness phase, where over 4,200 frontline health workers and other workers were vaccinated in Uganda.

“During this response phase, we have received a total of 3,400 doses of the vaccine. A donation of 400 doses from the DRC as a quick initial measure to kick start vaccination of contacts, frontline health workers and other workers who were not vaccinated, and an additional 3,000 doses sent in by WHO. All these arrived very timely and vaccinations commenced last Saturday, 15 June 2019 where over 20 contacts were vaccinated. Today, we expected to vaccinate over 70 people and the process will continue,” she said.   

Dr Tedros is expected to meet the President of Republic of Uganda H. E. Yoweri Museveni on Monday, 17th June 2019 for a bilateral on the current Ebola outbreak that has spilled over to Uganda.

Dr Aceng appreciated the efforts and contributions of all partners in Uganda towards the containment of the Ebola outbreak.

The UN resident Coordinator, Rosa Malango appreciated the political commitment of Government in responding to emergencies. “I have discussed with Dr. Yonas, and agreed to meet on Monday 17th June 2019, to once again analyze the gaps and identify where support is needed in terms of financial resources” she said.  

As of now, Uganda has no confirmed case of Ebola. Two suspect cases were under isolation in Bwera Ebola Treatment Unit as of Sunday 16th June. One of the suspect cases tested negative for Ebola and has been discharged, while results of the other suspect cases is pending.

The European Commission on 13th June 2019 announced an emergency funding of €3.5 million, of which €2.5 million is for Uganda and €1 million for South Sudan to strengthen rapid detection and reaction to Ebola cases. This is over and above the €17 million in EU funding for Ebola response since 2018 in the Democratic Republic of Congo and prevention and preparedness actions in Uganda, South Sudan, Rwanda and Burundi.

UNICEF, the UN Child Agency has provided over 5500 hand washing facilities to critical areas such as hospitals, schools and border entry points in 17 districts across Western Uganda. 

The Government of Ireland has also stepped in with a donation of two all-terrain 4*4s to improve the mobility and logistics by Ministry of Health workers.

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Finance

BoU Currency Scandal- URA tells BOU: “Don’t drag us into your mess”

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Amidst the raging scandal in which the Statehouse anti-corruption unit is investigating how illegitimate cargo, found itself on a chartered plane carrying new BoU banknotes, the Ugadna Revenue Authority (URA) whose customs officials cleared the cargo have said they did nothing wrong and instead asked BoU to own up their mess.

Full statement by Dickson Kateshumbwa, the URA Commissioner Customs, in verbatim:

In April this year, URA Entebbe Customs was informed by BOU of an impending import of Currency and requested to facilitate quick clearance. A private chartered plane arrived and as normal practice for sensitive cargo Customs facilitated clearance of the currency at the tarmac in presence of BOU Officials, BOU Security, Aviation Security, Police and other security agencies.

The consignment was offloaded, inspected and loaded on BOU vehicles and taken to Kampala under heavy security escort.

The same plane contained other cargo which belonged to various individuals / companies / organizations. As per normal customs clearance procedure, this cargo was offloaded into the licensed bonds at the airport and subsequently the owners made customs declarations, paid applicable taxes and Customs physically verified each consignment to ascertain accuracy and consistency with the declaration and released the goods to the owners.

Each consignment had its individual airway bill. Customs was not party to the airline charter arrangements between BOU, the airline and the other owners of the goods. It is not the responsibility of Customs to concern itself in logistical arrangements of importers or exporters. Our duty is to ensure that imported cargo through the airport is received and tallied with the cargo manifest, verified and is cleared in line with the Customs Laws as established under the East African Customs Management Act (EACCMA).

In this particular consignment like all others, our Customs staff followed the procedures to the dot and we can account for the cargo cleared fully. URA has provided the details of the information required by the investigators and we are available to offer any clarification if required.  

URA should not be dragged into logistical contractual failures or mistakes of BOU and their service provider.

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