Financial Crime World

Headline

Ugandan Organizations Suffer From Surge in Economic Crime and Fraud: PwC Report

Subheading

  • Cyber-attacks, money laundering, insider trading top the list of economic crimes impacting businesses in Uganda

PwC Report 2022: Eastern Africa seeing a significant surge in economic crime and fraud

Amidst the increasing digitalization of financial transactions, eastern Africa, including Uganda, has experienced a significant surge in economic crime and fraud, according to a new report from PwC 1. An alarming 63% of eastern African businesses reported experiencing fraud within their organizations 2, significantly above the 46% global average.

Top Incidents of Economic Crime

  1. Cyber-crime

    • The most frequent crime incident, accounting for 22% of all reported cases 2
    • The escalating usage of digital and online financial services might be contributing to the increase in cyber-attacks

  2. Money laundering

    • At 8%, money laundering represents the second most reported economic crime incident
    • Proceeds from such activities can lead to financial instability and negatively impact public trust

  3. Insider Trading

    • At 6%, insider trading is a serious concern for businesses, particularly those in the financial sector
    • Compromises fair business practices and leads to an unlevel playing field

Industries Most Impacted

  1. Financial Industry
    • The most affected industry (47%) 2
    • Financial institutions remain prime targets for cyber-attacks, causing significant disruption to their operations

Specific Economic Crime Cases in Uganda

  1. Customer Fraud

    • Organizations in eastern Africa, including Uganda, experienced higher instances of customer fraud (18%)

  2. Asset Misappropriation

    • At 16%, asset misappropriation ranks as the most frequently reported incidence in eastern Africa and Uganda
    • Putting companies’ financial stability at risk

  3. Procurement Fraud

    • Procurement fraud (15%) has become increasingly common, leading to significant financial loss and negatively impacting reputation

To Combat Economic Crime and Fraud

Experts recommend addressing cybersecurity vulnerabilities, increasing awareness of fraud risks, and strengthening the governance and risk management frameworks 3.

  • Cyber criminals are becoming more sophisticated, committing fewer but more money-spinning attacks
  • Criminals exploit vulnerabilities in digital financial services and seek to cash in on the shift towards the digital economy

Acknowledgement of Increased Risks Associated with Cyber-crime

  • The Ugandan Bankers Association (UBA) acknowledges the increased risks associated with cyber-crime
  • It is crucial to make cyber-crime a risky business

Government Officials and Economic Crime

  • The Accountant General, Lawrence Semakula, points to collusion as the primary mode through which government officials perpetrate economic crime and fraud
  • Increased pay has not been effective in deterring theft in government

New Regulation to Deal with Economic Crime and Fraud

  • Ms. Julianne Mweheire, the Uganda Communications Commission director of industry affairs and content development, states that the PwC report aligns with their findings
  • A new regulation passed under the Security Docket is expected to deal with economic crime and fraud with increased severity

  1. “Economic Crime and Fraud Report 2022” - PwC ↩︎

  2. “Eastern Africa businesses have an alarming fraud rate of 63%” - The East African Business Week ↩︎ ↩︎ ↩︎

  3. “Combating Economic Crime and Fraud” - PwC ↩︎