Bank of Uganda denies hiding cash in Germany

BOU denies hiding cash on foreign account in Germany

Kampala, Uganda | JULIUS BUSINGE |  Bank of Uganda (BOU) has dismissed as untrue reports that it has hidden Sh10.7 billion in a bank in Germany, an issue that has been widely spread on social media in the past week.

In a statement dated August 7, the Central Bank says the social media reports misrepresent some of the information that was provided in testimony by BOU Governor Emmanueul T. Mutebile and his staff before the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on August 2.

On August 2, Governor Mutebile and his team appeared before COSASE to respond to issues that had been raised by the Auditor General arising from routine end of financial year audits covering three financial years starting from 2013/14 forward.

“One of the issues that had been raised pertained to a dormant trust account held in Deutsche Bank in Germany that had not been reflected in the books of the Bank of Uganda,” the statement, signed by Chirstine Alupo, the director for communication reads in part.

It adds that in carrying out its role as Banker to government, the central bank opens and executes authorised transactions on government accounts both domestically and internationally.

Alupo explained that the account in reference was opened on December 17, 2003 on the instructions of Ministry of Finance Planning and Economic Development (MoFPED) in the Deutsche Bank in Germany.

The purpose of the account was to receive proceeds from the sale of shares in DFCU Bank by a German company called Deutsche Entwicklungs. She said that the funds had been designated as a grant to the Uganda Government.

Statement: Bank of Uganda did not Hide Funds on a Foreign Account pic.twitter.com/QBqz0zHXlO

— Bank of Uganda (@BOU_Official) August 7, 2017

The statement says that during the process of preparing the annual statements for the financial year 2013/14, Bank of Uganda classified this account as dormant, and accordingly informed the Auditor General in September 2013. From the time the matter of dormancy was raised, it was handled between the BoU and MoFPED in line with procedure related to dormant accounts.

Consequently, the statement says that authorisation to close the account was given by the Auditor General , and in February 2015, the funds (Shs 10.7 billion) were transferred to the Consolidated Fund.

“It is therefore erroneous and misleading to claim that the Bank of Uganda ‘hid’ the funds in a ‘secret’ foreign account,” Alupo said.

This development comes at a time when critics of the Central Bank are blaming it for neglecting its supervisory role following developments that saw the largest commercial bank, Crane Bank lose billions of shillings in dubious transactions. The matter that is currently before court.