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Oberthur Fiduciaire the French money printer speaks out; denies any wrongdoing, blames money plane operator and offers to compensate BoU



BoU Governor, Emmanuel Tumusiime Mutebile called in government to investigate the anomalies identified in currency note logistics. French money printer, Oberthyr Fiduciaire has denied any wrong doing and strongly rejected any suggestions that extra illegitimate money was printed and carried on the plane

Oberthur Fiduciaire, the French currency printer contracted by BoU to print and deliver an unspecified amount of Uganda Shilling banknotes to Uganda, has denied any wrong in the ongoing scandal in which unauthorised cargo found its way on what should have been a top-security exclusive flight.

Allen & Overy LLP, who are Oberthur Fiduciaire’s lawyers, in an email to CEO East Africa Magazine blamed the operator of the plane, chartered by them, who carried unauthorised cargo and didn’t bother to notify them beforehand.

Oberthur Fiduciare strongly rejected any claims and allegations that there was any extra and or unauthorised money on-board and or printed by them, saying: “Oberthur Fiduciaire confirms that the exact number of banknotes ordered by the BoU has been printed and delivered.”

The French firm also clarified that they are not associated with Oberthur Technologies SA, which is facing a 2.5 years ban from World Bank and partner agencies over a corruption scandal in Bangladesh.   

CEO East Africa Magazine understands that Kuehne + Nagel International AG, a global transport and logistics company based in Schindellegi, Switzerland is the transporter hired by Oberthur Fiduciaire to transport the money to Uganda.

“Oberthur Fiduciaire further denies having committed any wrongdoing in relation to its business relationship with the BoU and the provision of banknotes,” wrote Allen & Overy LLP.

“For the sake of clarity, the MD-11 (The McDonnell Douglas MD-11) aircraft that was initially supposed to be used to ship banknotes to the BoU had been grounded in Kampala for technical reasons and replaced by a larger B747 (Boeing 747). The operator of the B747 has, without notifying Oberthur Fiduciaire, used the same flight to ship one pallet of replacement parts for the MD-11 and four pallets of regular cargo,” the law firm further clarified on behalf of Oberthur Fiduciare.

“Oberthur Fiduciaire eventually offered financial compensation to BoU in the form of a rebate on future transport costs as this was contrary to the contractual arrangements between BoU and Oberthur Fiduciaire,” concluded Allen & Overy LLP.

CEO East Africa Magazine has written to Uganda’s Civil Aviation Authority who manages Entebbe International Airport to corroborate this and will update this story in due course.

On June 14th Matooke Republic, a Kampala based news site reported that The official amount printed was a “70 million pieces of UGX5,000 notes” to totalling to UGX350 billion. The money was supposed to be flown in a privately chartered MD-11F aboard a M/s Kuenel + Nagel flight no. AJK4042/LGG-EBB on 26th April 2019.

However, there was a change of plan to another plane B747-400BCF at the last minute.

Kuenel + Nagel was reportedly paid USD196,931 as freight and insurance fees. 

Matooke Republic also reported that Oberthur the company contracted to print the money went ahead to offer a remedy of $15,000 (about Shs57m) or a 10% discount on the next consignment.

An unconvinced BoU Governor, Prof Emmanuel Tumusiime Mutebile, then called in State House’s Anti-Corruption Unit to investigate the matter.

A statement by Uganda Revenue Authority has since said that the 5 extra cargo pallets 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,” read a statement by Dickson Kateshumbwa, the URA Customs Commissioner.

Some of the organisations/entities said to have had cargo on the said plane, include businessman Charles Mbiire and Omar Mandela’s Mandela Millers Ltd. A number of UN agencies as well as USAID, Ministry of Health and other private businesses have also been named by authorities as having had cargo on the said plane. 

Muhereza Kyamutetera is the Executive Editor of CEO East Africa Magazine; strategic communications consultant, social-economic analyst and travel enthusiast based in Kampala.


Ugandan travellers to China to enjoy better services with Orient Bank’s partnership with China’s UnionPay



Mr. Tashin Morjaria (L), Orient Bank Head of Business Development and Mr. Michael Nsereko (R ) Orient Bank Head of e-banking join Mr. Shuan Ghaidan (C), UnionPay International Company Leader and Director of Products at the partnership launch at UnionPay Headquarters in Shanghai.

Orient Bank Uganda Limited and UnionPay International have announced a partnership in which all UnionPay Cards are now accepted at all ATMs and POS terminals of Orient Bank, one of the leading and fastest growing banks in Uganda.

Annoucing the partnership in Kampala today, Darshana Bhatia, Orient Bank Excutive Director said, “This is yet another demonstration of our commitment to anticipate and meet our customer needs through technology, innovation  and partnership. Uganda  and China enjoy a robust trading relationship which relies greatly on each country’s intergration into the global financial system if ease of doing business is to be attained.”

UnionPay International is accelerating the promotion of digitized payments in East Africa. Today, UnionPay has over 80% acceptance on ATMs in Uganda and over 85% acceptance on POS terminals.

Mr. Luping Zhang, General Manager of UnionPay International Africa Branch said, “This partnership will offer holders of UnionPay cards a seamless payment experiece. Based on this collaboration, the two sides will explore future cooperation in rolling out UnionPay’s innovative products, including UnionPay QR Code payment and B2B online payment.”

Orient Bank has continued its quest to provide fast, convenient and safe payment systems to serve its niche customers in SME and High Networth Banking Segments.

This partnership will further boost trade between Uganda and China as visitors from China will be able to process payments at Orient bank ATMs and Point of Sale terminals across various merchants .

In partnership with more than 2,000 institutions worldwide, UnionPay has enabled card acceptance in 176 countries and regions, and realised card issuance in 58 countries and regions. UnionPay provides high quality, cost effective and secure cross-border payment services to the world’s largest cardholder base and ensures convenient local services to a growing number of global UnionPay cardholders and millions of merchants.

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FINANCIAL DILEMMA: BoU needs fresh UGX 671bn in capital- Auditor General



Bank of Uganda (BoU) is undercapitalised to a tune of UGX671.712Billion According to the Auditor General, John Muwanga this poses a risk to the Central Bank’s operations.

Auditor General, John Muwanga says this financial position poses a risk to the Central Bank’s operations

The details of the Central Bank’s woes are contained in the 2018/2019 audit report of Bank of Uganda which carries queries that were raised by the Auditor General’s team.

The audit report highlighted that as per the Bank of Uganda Act, Section 14 (3), the issued and paid up capital of the Bank shall be a minimum of UGX 2 Trillion but as of June 30, 2019, the core capital of the Bank was below the minimum required capital by UGX671.712Billion while in the same period in 2018, the Central Bank was undercapitalized to a tune of UGX482.730Billion.

The audit report further explains that the operating losses of the Bank during the year ended June 30, 2019 were mainly attributable to interest expense paid to financial institutions on deposit auctions and vertical repos issued by the Bank in the management of monetary policy as per the Bank’s mandate and currency costs of UGX 198.274Bn which is equivalent to 89 % of the interest income) yet in 2018 the loss was recorded at UGX 155Bn representing 79% of the interest income.

The Central Bank management has explained that the costs of implementation of monetary policy that have caused erosion of the Bank’s core capital are currently fully borne by the Bank.

“I considered this to be a key audit matter because inadequate capital poses a business risk to the Bank and its operations. I performed the following audit procedures in this area, among others,”Muwanga cautioned.

The Central Bank also reported that during the period between July 2018 to June 2019, the Non-Executive Directors were each paid UGX.5Million net of tax per month as retainer fees and UGX2.5million net of tax per meeting as their sitting allowance.

The Central Bank’s board comprises of Prof. Emmanuel Tumusiime-Mutebile who doubles as Board Chairman and Governor, Dr. Louis Kasekende, James Kahoza, William Kalema, Judy Obitre Gama, Keith Muhakanizi and Josephine Okui Ossiya.

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Stanbic September report bullish about economy; demand grows backed by credit growth



The Stanbic Purchase Manager’s Index (PMI) for September shows that the private sector activity remained in the growth territory at the end of the third quarter of 2019.

The survey, sponsored by Stanbic Bank and produced by IHS Markit, indicates that ability of firms to secure additional customers resulted in higher new orders and a subsequent expansion of business activity. Meanwhile, both input costs and output prices continued to increase.

Benoni Okwenji, Stanbic Bank’s Fixed Income Manager

The headline PMI was 55.7 in September, down from 57.5 in August, but still above the 50.0 no-change mark.

Stanbic Bank Fixed Income manager Benoni Okwenje, stated that the Private sector activity remained solid at the end of the third quarter of 2019. Despite the PMI declining to 55.7 in September from 57.5 in August, overall activity remains robust.

“Domestic demand continues to improve, partially driven by private sector credit growth over the last year. Despite higher input costs, the rise in new orders has supported overall output. It has now been 32 months in a row of improving business conditions and we suspect this trend will carry through for the rest of the year,” said Okwenje.

The report shows that new orders increased in September, with a number of panelists indicating that they had been able to secure new customers during the month.

The survey, which has been conducted since June 2016 and covers the agriculture, industry, construction, wholesale & retail and service sectors, contains the latest analysis of data collected from the monthly survey of business conditions in the Ugandan private sector.

According to the PMI report for September, the expansion in demand, alongside successful marketing, led to a thirty-second successive monthly rise in business activity. All five broad sectors saw growth of output.

 “Purchasing activity continued to rise, extending the current sequence of expansion to 19 months. Faster suppliers’ delivery times meant that the increase in input buying fed through to an accumulation of inventories. Overall input prices increased, with panelists reporting higher costs for electricity and purchased items including cement, food products and stationery,” Okwenje added.

Companies responded to higher input costs by raising their output prices accordingly. Selling prices have increased throughout the 40-month survey so far.

The PMI report further states that the likelihood of continued new order growth and business expansion plans led to optimism among firms that output will rise over the coming year. “Over 74% of panelists were confident regarding the outlook,” the report showed in part.

About PMI

The PMI is a composite index, calculated as a weighted average of five individual sub-components: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stocks of Purchases (10%). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI™) which provides an early indication of operating conditions in Uganda.

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