Uganda loses Shs2 trillion in illicit financial flows

Uganda loses about Shs 2 trillion every year to illicit financial flow and the figure is likely to be higher given the global disparities, the Monitor has learnt. Globally, over 50 billion dollars are lost every year,

Civil society activists and economic observers say there is a lack of clarity in figures coming out of Uganda’s exports, singling out commodities such as; tea and gold. They claim that there is little or no exposure to the proper value of exports despite the country registering millions of dollars in returns.

“Between Uganda and Kenya, there’s a mismatch of tea export and import records. There’s a discrepancy of over 60 million kilograms. While Uganda says it exports 69 million kilograms, Kenya says it imports 7 million kilograms,” Ms Lakshmi Kumar, the policy director at Global Financial Integrity,  said.

Ms Sara Opendi, the State Minister of Mineral Development, said that gold is the largest export commodity for Uganda, but does not contribute much to the national export earnings.

“As a country we are priding ourselves in gold being the largest export commodity from the country but, how much are we receiving from it, nothing almost,” she noted.

Uganda continues to face revenue leakages due to failure by various government sectors to work together to enforce the already existing laws in order to realize an increase in the Gross Domestic Product (GDP).

“We have some legislative gaps, we need to reconcile the existing laws for example the beneficial ownership legislation which requires the amendment of the companies act to have a uniform definition of beneficial ownership and also have the sanctions and requirements for companies that are registering in Uganda,” Mr Onesmus Mugyenyi,  the deputy executive director of ACODE,” noted.

The Organisation for Economic Co-operation and Development data shows, that Uganda lost half of its 2020/21 health budget in illicit financial flows.