Financial Crime World

Headline: Ugandan Businesses Facing a Surge in Cyber-Crimes, Money Laundering, and Insider Trading: PwC Report

Overview

According to a new report by professional services network PwC, at least 60% of businesses and organizations in Uganda have suffered from economic crime and fraud in the last two years. This rate is significantly higher than the global average of 46%.

Key Findings from the Report

  • Cyber-crime is the most frequent form of economic crime, with 22% of the incidents reported.
  • Money laundering and insider trading are the second and third most common incidents, respectively.

Concerns Expressed by PwC

Muniu Thoithi, the PwC advisory and forensics leader for eastern Africa, expressed concern over the rising trend of economic crime in eastern Africa, including Uganda. He noted that it’s not just a local issue but prevalent across the region.

Sector-wise Impact of Economic Crime

Financial Industry

The financial industry was the most affected, with 47% of survey respondents reporting economic crime incidents. The increased usage of digital and online financial services has made financial institutions a prime target for cyber-crime. Threats such as phishing emails, ransomware attacks, and data breaches have become common, causing significant disruption and potential financial losses.

Urgent Interventions Required

Organizations in Eastern Africa reported the following economic crime incidents:

  • Customer fraud: 27%
  • Asset misappropriation: 23%
  • Procurement fraud: 17%
  • Bribery: 14%
  • Supply chain fraud: 12%

Although the region reported fewer incidences of human resource fraud (5%), tax fraud (4%), government relief fraud (2%), and environmental, social, and governance reporting fraud (1%), urgent interventions are still needed.

Importance of Cybersecurity Measures

In light of the increasing cyber-crime threats, Wilbrod Owor, the executive director of the Uganda Bankers Association, emphasized the importance of making cyber-crime a risky business. The growing threats to the cashless economy call for a collaborative effort among governments, financial institutions, and technology companies to enhance cybersecurity measures and invest in advanced cybersecurity technologies.

Regional Challenge: High Rates of Cyber-Attacks

The report comes a few weeks after a KPMG report pointed to East Africa as one of the regions with the highest rates of cyber-attacks, primarily due to the rapid shift to cashless payments and remote working arrangements.

Collusion and Government Fraud

Lawrence Semakula, the Accountant General, noted that collusion is the most common method through which government officials perpetuate economic crime and fraud. Despite the increased payroll, the issue of corruption within the government sector remains unchecked.

Julianne Mweheire, the director of industry affairs and content development at Uganda Communications Commission, emphasized the importance of strengthening the legal framework regarding economic crimes and fraud. She stated that the new regulation passed under the Security Docket would take a serious stance against economic crime and fraud to ensure accountability and transparency for all involved parties.