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Analyst: How Illegal Money Entering Country Can Crash The Economy

Economists and analysts have revealed that if extra illegal money is brought into an economy, it could have far reaching consequences.

This comes following allegations that Bank of Uganda (BoU) officials illegally printed extra Shs90bn for their own use.

Speaking exclusively to Business Focus, Dr. Fred Muhumuza, an analyst and Economics Lecturer says he doesn’t see a scandal at BoU “because I don’t think any extra money was printed knowing how tight the process is monitored both within and outside our borders.”

He added: “My assessment is a logistical intrusion that a chartered plane supposed to bring the money got a problem and the company switched to another, which already had other private cargo.”

Asked on the implication of illegal extra money being introduced in an economy, Muhumuza (in featured photo) said it can have serious global and local implication given the high alert on counterterrorism financing that would discredit Uganda as the weak link in the global chain.

“Countries can blacklist Uganda and stop receiving payments from here and affect traders and other people who deal in businesses that require international payments,” Muhumuza said.

Asked on what can be done to fix BoU that has attracted negative publicity in recent years, the revered analyst said: “ A number of reforms are already ongoing but it will take some time. It might involve strengthening the Board, Internal Audit, Communication and information management, possible merger of some departments, etc.”

Speaking about Prof. Emmanuel Tumusiime-Mutebile (current BoU Governor) successor, Muhumuza said a Governor is often both political and technical and can come from both within and outside the Bank.

“If you look at the history of the Museveni era, you might notice that many (if not all) have come from outside. I would rather not speculate on the President’s mind,” he said.

Meanwhile, Ramathan Ggoobi, another analyst and Economics Lecturer at Makerere University Business School seems to suggest Mutebile should be out of BoU sooner than later.

“I gather the Governor BOU earlier today issued the June 2019 Monetary Policy Statement. In well-governed societies he should’ve issued his resignation schedule in the place of inflation targets, CBR, and overall monetary policy stance of a bank he has failed to keep from scandals,” Ggoobi twitted on his official Twitter handle.

Muhumuza concluded by emphasizing the importance of the Central Bank in the economy.

“The importance of the Central Bank in the economy needs to be preserved at whatever cost. Unfortunately, it is an open digital world where even fake news gets to spread too fast and is often believed,” he said, adding:

“Just imagine the ongoing investigation that cannot even be left to happen quietly and we get the results; not even by the very investigating teams who are even conflicting on what they are saying. [It’s a] pity to Uganda that we can get this low in our value system.”

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