THE THIEF WITHIN: Who is Stealing from Ugandan Companies? An Analysis from PwC Reports and the Uganda Police Crime Report 2024— The Rising Cost of Economic Crimes in Uganda.

Uganda is experiencing an economic crime crisis, with businesses and individuals losing over USD 272 million (UGX 1.02 trillion) in 2024 due to fraud, cybercrime, and financial misconduct. This represents a sharp rise from UGX 930.5 billion lost in 2023, highlighting the growing sophistication of financial crimes.

While the total number of reported economic crime cases saw only a 1.6% increase, from 12,924 in 2023 to 13,132 in 2024, the financial damage inflicted has become far more severe. Cybercrime alone saw a staggering 4,700% increase in financial losses, jumping from UGX 1.5 billion in 2023 to UGX 72.1 billion in 2024.

The Uganda Police Annual Crime Report 2024 attributes this surge to digital vulnerabilities, insider fraud, and weak enforcement mechanisms. The most targeted sectors include banking, real estate, telecommunications, and corporate institutions, where fraudsters exploit loopholes in financial transactions, procurement, and documentation.

Findings from the PwC Global Economic Crime and Fraud Surveys for 2020, 2022, and 2024 further illustrate the alarming trajectory of financial crime in Uganda. Economic crime in Uganda is increasing at a faster rate than in Eastern Africa, and globally, yet many fraud incidents remain unreported, allowing criminals to operate with impunity.

The Five-Year Growth of Economic Crime in Uganda

The PwC reports show a consistent increase in economic crime over the past five years.

In 2020, 54% of Ugandan companies reported experiencing fraud, compared to a global average of 47%. By 2022, this number had surged to 63%, far exceeding the regional (59%) and global (46%) averages.

By 2024, Uganda’s fraud rate remained among the highest in the world, with 63% of organisations suffering economic crime, compared to 48% in Eastern Africa and 41% globally.

These statistics indicate a worsening fraud crisis. Uganda is one of the few countries where economic crime is rising rather than declining. This trend suggests weak enforcement, inadequate corporate controls, and sophisticated fraud mechanisms that allow financial criminals to evade detection.

The Internal Thief: A Persistent and Growing Threat

A major factor fueling economic crime in Uganda is internal fraud committed by employees, executives, and managers who exploit their positions to steal from their organisations.

The PwC 2020 survey revealed that senior management was responsible for 43% of economic crimes, while 24% were committed by operations staff. In 2022, internal fraud increased, often involving collusion between employees and external fraudsters.

By 2024, while cybercrime and customer fraud had overtaken internal theft as the most common crimes, insider fraud remained one of the most financially devastating forms of economic crime.

Common Forms of Internal Fraud include:

1. Financial Statement Fraud and Accounting Manipulation: One of the most sophisticated forms of insider fraud occurs when senior executives override internal controls to misrepresent financial reports. This may involve inflating revenue figures, concealing losses, or forging financial statements to siphon company funds.
2. Procurement Fraud and Collusion with Vendors: Many fraud schemes involve employees colluding with suppliers to manipulate procurement contracts. These schemes can involve inflated pricing, bribery, kickbacks, and ghost suppliers, leading to massive financial losses.
3. Theft of Company Assets and Payroll Fraud: Employees frequently steal funds from company accounts through fraudulent payroll schemes, ghost worker payments, and inflated expense claims.
4. Insider-Enabled Cybercrime: Employees with access to sensitive data and IT systems steal customer information, delete transaction records, or collaborate with hackers to commit fraud.

The Uganda Police Crime Report 2024 supports these findings, noting a significant rise in embezzlement and forgery cases, particularly in corporate settings.

Why Are Companies Reluctant to Report Fraud?

Despite the increase in fraud cases, companies remain hesitant to report fraud to authorities, a trend consistently observed across the PwC surveys.

In 2020, only 14% of fraud incidents were reported to regulators or law enforcement. By 2022, businesses preferred handling fraud cases internally, often to avoid reputational damage or legal complications.

By 2024, 41% of organisations stated that Uganda’s enforcement of anti-corruption laws had either stagnated or declined, further discouraging businesses from reporting fraud.

Key Reasons for Underreporting include:

• Fear of Reputation Damage: Companies worry that reporting fraud will damage their credibility and drive away investors or customers.
• Lack of Confidence in Law Enforcement: Many companies believe that corrupt officials will not take action or may even tip off fraudsters before arrests are made.
• Internal Protectionism: If senior management is involved, companies often cover up crimes rather than expose top executives.
• Weak Whistleblower Protection: Employees fear losing their jobs if they report fraud, leading to low internal reporting rates.

The Uganda Police Report 2024 reveals that cybercrime convictions remain rare. Of the 474 reported cases, only 21 resulted in convictions, while 310 cases remain under investigation.

Cybercrime: The Fastest-Growing Economic Crime in Uganda

Following customer fraud, Cybercrime has emerged as the second most prevalent form of economic crime in Uganda.

According to PwC reports, cybercrime ranked 8th in 2020, affecting only 12% of companies. By 2022, however, the number of cybercrime cases doubled to 22%, driven by increased remote work, digital payments, and cyber vulnerabilities.

By 2024, cybercrime had surged to 37%, making Uganda one of the hardest-hit countries in Eastern Africa. 

According to the Uganda Police Report 2024, cybercriminals are using increasingly sophisticated methods, including:

• Phishing and Social Engineering: Fraudsters deceive employees into revealing banking credentials and login details.
• SIM Swaps and Mobile Money Fraud: Criminals hijack mobile accounts and withdraw funds without authorisation.
• Hacking and Data Breaches: Cybercriminals target banks, telecoms, and government agencies to steal sensitive financial data.
• Fake Online Investment Scams: Scammers lure victims into fraudulent cryptocurrency and forex trading schemes, causing them to lose millions of dollars.

Despite efforts to combat cybercrime, the police report reveals that only UGX 420 million was recovered in 2024, a tiny fraction of the UGX 72.1 billion stolen.

Uganda Must Act Now

Over the past five years, Uganda has witnessed a dramatic increase in economic crime, particularly internal fraud and cybercrime. While some companies invest in fraud detection, weak enforcement and low reporting rates continue to enable financial criminals.

To safeguard the economy, Uganda’s corporate sector, law enforcement, and policymakers must take decisive action before economic crime spirals further out of control.