The Bank of Uganda (BoU) yesterday issued a public notice indicating it had revoked the licence of Mercantile Credit Bank Limited effective June 18, 2024, again sending shock waves in the local banking industry.  This is after BoU closed EFC Uganda Limited also recently.

Like previous banks which were closed by BoU, the central bank claimed the closure of Mercantile Credit Bank, and EFC Uganda was a result of undercapitalisation and poor corporate governance and needed to save depositors’ savings. However, the public has yet to hear from the latest closed financial institutions their side of the story.

The BoU, during the period 1993 to October 2016 closed seven commercial banks including Teefe Trust Bank, International Credit Bank, Cooperative Bank, Greenland Bank, Global Trust Bank, National Bank of Commerce, and Crane Bank Limited (CBL), claiming that all these were undercapitalised and had exhibited poor corporate governance.

After the closure of these banks, numerous complaints from the shareholders would force Parliament, through its Committee on Commission and State Enterprises (COSASE) during the speakership Rebecca Kadaga, to ask the Auditor General to undertake a special audit on the closure of the seven banks by BoU.

The Auditor General John Stephen Muwanga would carry out his work as assigned by Parliament, and in his Special Audit Report of the Auditor General on Defunct Banks, BoU was exposed for having flouted guidelines and processes established to close any bank. In particular, issues of corruption, abuse of the laws, abuse of office, carelessness, poor record keeping were unearthed by the Auditor General, putting the central bank’s image to shame.

From the Auditor General’s findings, what BoU will never forget is the closure and sale of Crance Bank Limited (CBL) on January 25, 2017 to its rival DFC, in a Shs200 billion deal, or scam, given that they invited DFCU to buy CBL, which was against the law? Here BoU officials were so careless that they would hand over properties of a different company, from which CBL was renting to operate its branches, to DFCU. Moreso, BoU in the process of selling CBL, claimed it spent over Shs478 billion of taxpayers’ money as liquidity support to CBL which was in receivership but could not account for most of the money, according to the Auditor General.

CBL still fighting

Despite not accounting for the above funds BoU would drag shareholders of CBL, including Sudhir Ruparelia, Chairman of Ruparelia Group of Companies, demanding for Shs397 billion it claimed was siphoned from CBL by the defendants. The case has never succeeded, as Sudhir keeps on fighting to have his bank back.  For instance, CBL has dragged DFCU to UK High Court has been battling to recover more than $220 million from what it says was an illegal sale and transfer of its assets and liabilities to DFCU.

Invesitgations by the Auditor General revealed the CBL, National Bank of Commerce, and Global Trust Bank Uganda, were closed unfairly as the shareholders were ready to recapitalise them, with CBL needing only Shs50 billion, yet when DFCU acquired it through fraud, DFCU made huge profits of Shs114 billion in the first half of 2017, attributing the profits to the acquisition of CBL whose assets were not even evaluated by BoU but by DFCU.

The mess of closing and winding up the sale of CBL, has been a thorn in the BoU, as its officials mismanaged Shs478 billion, with more money being paid to private lawyers in the fight against CBL. However, BoU abused public money here, as they failed to account for it, and in the next financial year national budget, government is to give BoU over Shs600 billion in the guise of its recapitalisation.

National Bank of Commerce still fighting

The National Bank of Commerce shareholders up to date maintain that their bank was unfairly closed and sold in one day (September 27, 2012) without any inventory report and want to be compensated. The Shs603 billion for recapitalisation in the next budget could help BoU clean its mess created by the haphazard closure and liquidation of the banks while those who stole billions of shillings enjoy life in their bungalows. Remember the same BoU officials also closed Global Trust Bank and sold it one day!

Who remembers former BoU bosses in bank closure debacle?

Who remembers former Deputy BoU Governor Dr Louis Kasekende, former Executive Director of Bank Supervision Justine Bagyenda, and Director of Banking Ben Sekabira. According to the late BoU Governor Emmanuel Tumusiime Mutebile, the trio did close and sale some of the banks without his knowledge, or never updated him on transactions.

Do you remember that Bank of Uganda officials failed to explain to COSASE during the probe how they came to sell loans of three defunct banks at 93 percent discount to Nile River Acquisition Company (NRAC) registered in Mauritius, a tax haven? David Opio Okello who once served at BoU as Executive Director Supervision and Acting deputy governor could not explain the role of M/S J.N. Kirkland & Associates which was contracted to identify a buyer of loans of Greenland Bank, Cooperative Bank and International Credit Bank.

COSASE advise to weak BoU management

The Abdu Katuntu COSASE in its report on closed banks advised that resolving financial institutions in distress should be independent of the supervision of BoU to avoid conflict of interest.

The COSASE report stated: “Whereas the resolution of financial institutions in distress has been under the BoU supervision department, it 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. Hope this is possible with the closure of Mercantile Credit Bank Limited, which in one way or another may haunt BoU, like the former banks, CBL, and others that were closed carelessly.

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MTN Foundation, the MTN Uganda’s corporate social responsibility body, has unveiled the second phase of the MTN ACE program, a youth empowerment initiative aimed at equipping 8,000 youths with digital skills and creating 150 startups over the next three years.

The program, worth Shs4.5 billion, is collaboration between MTN Uganda, the Ministry of ICT & National Guidance, the National ICT Innovation Hub, Centenary Technology Services, MUBS Entrepreneurship Innovation and Incubation Centre, and Engage Consult.

Speaking at the launch event, MTN Uganda CEO Sylvia Mulinge emphasized the company’s commitment to empowering youth to become innovators, entrepreneurs, and leaders in the digital age.

“At MTN Uganda, we believe that everyone deserves the benefits of a modern connected world, and access to digital skills is a critical avenue to achieving that aspiration. As the second phase of the MTN ACE program takes shape, MTN Uganda is more committed than ever to empowering the country’s youth to become innovators, entrepreneurs, and leaders in the digital age,” she said.

Mulinge further noted that the program seamlessly aligns with MTN’s Ambition 2025 of leading digital solutions for Uganda’s progress and supporting the government’s development goals in the National Development Plan III and Vision 2040, especially in addressing the high youth unemployment rate—a challenge projected to grow as the population expands.

The first phase of the MTN ACE program, which has been running since December 2022, saw 185 youths graduate across three distinct programs: 51 from MTN ACE Tech, 47 from the MTN ACE Career program, and 87 from the MTN ACE Skills program. Additionally, 20 enterprises were selected for ACE Tech acceleration, and 15 enterprises for incubation, demonstrating the program’s significant impact on nurturing youth skills and enterprises. MTN invested Shs1.5 billion in the first phase of the program.

Minister of State for Information and Communication Technology (ICT) and National Guidance, Joyce Nabbosa Ssebugwawo, also spoke at the launch, “As we embark on Phase Two, we are more committed than ever to empowering our youth to become innovators, entrepreneurs, and leaders in the digital age. We deeply appreciate the efforts of our partners whose marvelous effort in developing a digitally experienced and empowered generation is invaluable. Together, we are encouraging innovation and productivity across people, organizations, businesses, and government.”

The MTN ACE program focuses on three key areas: MTN ACE Tech, which upskills youth interested in tech-related innovations; MTN ACE Career, which empowers fresh graduates with workplace skills and internship placements; and MTN ACE Skills, which equips youths in or out of school with entrepreneurial skills to start businesses.

Beyond the MTN ACE program, MTN Foundation is involved in several other youth empowerment initiatives, including the MTN Skills Academy and MTN Internet Bus, which provide young people with essential digital skills, enhancing their employability and entrepreneurial capabilities in Uganda and beyond.

MTN Uganda remains dedicated to fostering digital literacy and innovation as a means to drive economic growth and development. The second phase of the MTN ACE program is a testament to MTN’s commitment to empowering the youth and transforming Uganda’s digital and subsequently, economic landscape.

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FlexiPay, Stanbic Bank’s digital payment platform, has partnered with International Fund for Agricultural Development (IFAD) and Upesi Money Transfer, a regional payments company, to enable FlexiPay users to send, receive money from abroad with ease.

Josephine Nakato Kasacca, Lead Customer Experience & Operations for FlexiPay said the new partnership reflects the Bank’s commitment to support and enable customers to complete borderless financial transactions in a convenient, secure, quick, and affordable manner.

She said effective June 14, 2024 customers can use FlexiPay to send money to over 20 countries. However, plans are to increase this number to 70 by the end of the year.

“In line with our purpose; Uganda is our home, we drive her growth, we believe that by helping as many people as possible meet their financial needs with innovative services, goes a long way in driving economic growth. FlexiPay is ideal platform for both sending and receiving payments and let me emphasize again, very affordable! I want to take this opportunity to call upon all of you to use it because there are dozens of unmatched benefits one cannot find on other similar platforms,” she said.

Some of the foreign countries Ugandans can receive money from include; Kenya, United Arab Emirates, United Kingdom, Qatar, Oman, United States, South Africa, France, Canada, Israel, South Korea, India, Germany, Ireland, Netherlands, Kuwait, Bahrain, ARE, Australia, Poland among others.

She disclosed that FlexiPay is very safe to use, because it uses mobile applications and systems based on advanced encryption and other security measures to protect the sensitive financial information and transactions of all users.

Julius Okwana, the Upesi Money Transfer Country Manager expressed excitement about the possibilities that the partnership will realize. He said their company is committed to providing innovative solutions that simplify financial transactions.

He said coupled with FlexiPay’s rapidly increasing uptake in Uganda and Upesi’s extensive regional and global network, the partnership promises to make cross-border money transfers faster and more convenient without making unnecessary visits to banking halls.

“With the increasing demand for cross-border transactions in Uganda, this partnership between FlexiPay and Upesi is poised to revolutionize the way people send and receive money internationally. It is expected to drive financial inclusion and promote economic growth in the region.” Okwana said.

He assured users that all transactions are secured and protected from potential cyber threats.

As of 2023, there are estimated to be around two million Ugandans living, and working abroad. There are also a good number of Ugandans here, who are doing plenty of business with foreign companies. 

The recent World Bank report indicates that the total amount of money remittances received in Uganda on an annual basis is approximately $1.43 billion, about 5.32 trillion Ugandan Shillings.

According to David Berno, the International Fund for Agricultural Development (IFAD) Head Remittance and Inclusive, remittances play a crucial role in reducing poverty and enhancing food security in developing countries.

He said, “We are excited to be affiliated to this campaign because money remittances enable families to meet their basic needs, such as food, shelter, and education, and can also contribute to local economic growth through increased consumption and investment. Therefore, by supporting money remittances, IFAD aims to promote financial inclusion, empower smallholder farmers and rural entrepreneurs, and ultimately contribute to sustainable development and poverty reduction.”

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