Government plans to print own currency and the SRI Lankan crisis

The Daily Monitor is reporting that Government of Uganda has revived plans to establish a currency printing factory with a view of saving the country from the huge cost of printing the Shilling abroad.

The Minister of State for Presidency, Milly Babalanda reportedly made the revelation while officiating at the groundbreaking ceremony for the establishment of the Uganda security Printing Factory this week.

This comes in the wake of public demonstrations in Sri Lanka that were sparked off by among other factors, the delivery of 102 tons of printed materials suspected to be currency notes to Entebbe Airport on February 23, 2021, by the SriLankan Airlines plane (Airbus A333) chartered from Colombo. SecretsKnown has learnt that the aircraft was chartered by a UK-based flight forwarder.

Interestingly, the statement from the SriLankan Airlines reveals that Uganda government ordered the printing of currency notes (Shillings) from a global security printer that operates several factories worldwide including one based in Sri Lanka. Thus the airline took this as a purely commercial transaction to bring in the much-needed revenue.

The connection between Printing of Uganda Currency Notes and Sri Lanka Demonstrations

The Sri Lankan protestors are vexed by reports that the delivery of printed currency notes to Entebbe was followed by the travel of Sri Lankan Prime Minister – Mahinda Rajapaksa to Tirupati, India on pilgrimage aboard a private jet that came from Entebbe Airport, Uganda. The private jet in question is registered in San Marino, one of the renowned tax-havens.

Information circulating on social media in Sri Lanka is that president Gotabaya Rajapaksa who is a brother to Prime minister Mahinda Rajapaksa, smuggled out millions of dollars to hide in Uganda. The demonstrators in Sri Lanka suspect that Mr. Rajapaksa has been stashing away dollars into Uganda where the ruling family allegedly has investments in real estate, heavy engineering, and concrete manufacturing. It is alleged that these enterprises are supervised and managed through Sri Lankan envoy to Uganda, His Excellency, Velupillai Kananathan. This is the same Kananathan that was at the center of the botched Apparels Tri-Star textile industry in Bugolobi, commonly remembered as AGOA project in Uganda.

SecretsKnown will continue to investigate the facts surrounding these allegations and bring to you an update in the next edition. We now return to government plans of printing money locally.

Is it Feasible for Uganda to print its own currency in the current context?

The notion of Uganda printing its own currency should arouse not-so-pleasant memories. In the run-up to the 2011 general elections, Bank of Uganda (BoU) printed huge sums of money that were injected into the economy which ended up financing election campaigns. This according to the revelation made in November 2014 by the departed Governor Emmanuel Tumusiime Mutebile, caused the economic chaos that saw inflation rise to 30 per cent, triggering the so-called walk-to-work protests.

Eight years later, in 2019 to be specific, there was another development where six top officials from Bank of Uganda were questioned by Police and the State House Anti-Corruption Unit over issues related to transfer of currency from France through Belgium. This followed anomalies found in transportation of a consignment of UGX 350 billion packed in 20 pallets that were flown to Entebbe from Liege Airport in Belgium on April 27, 2019 aboard Ms Kuene Nagel cargo plane.

There were other reports that had indicated that they had been arrested overprinting of excess money to the tune of UGX 90 billion ($95,900), but SecretsKnown could not independently verify this. The recognized printing company for Uganda currency is De La Rue – a British company with many factories around the world.

Online news agency PML-Daily, reported that the money in question was transferred from BoU headquarters in Kampala to the Central Bank currency center in Masaka on the same day the investigation into the currency saga started. Investigators later revealed that when the money reached the Masaka Currency Centre, it was stored in a room without CCTV cameras. Was this coincidental or intended?

Bank of Uganda is on record to have advised government that printing the Shilling locally is not context-appropriate and thus a bad idea.