Financial Crime World

Uganda’s Financial Crime Threat: Corruption, Organized Crime, and Environmental Crimes

Uganda, a landlocked country in Eastern Africa known for its diverse landscape, faces significant financial crime threats ranging from corruption and organized crime to environmental crimes.

Executive Summary: Uganda’s Financial Crime Threats

According to the Financial Action Task Force (FATF) and the European Union, Uganda has been placed on their “Grey” lists due to concerns regarding its anti-money laundering (AML) and counter-terrorism financing (CTF) efforts. The most common domestic offenses generating proceeds include corruption, fraud, tax crimes, and counterfeiting (Ugandan National Risk Assessment, 2017). Externally, smuggling, wildlife offenses, drug trafficking, and human trafficking pose the greatest threats.

Transnational Threats and Criminal Actors

The 2019 Organized Crime (OC) Index shows that Uganda displays a high level of criminality (6.05/10) and a low level of resilience against these threats. The main criminal markets include:

  • Illegal timber (7/10)
  • Illegal mining (7/10)
  • Wildlife crime (6.5/10)
  • Drugs (7/10 for cannabis)

The main criminal actors are:

  1. Foreign Actors (7.5/10)
  2. State Embedded Actors (7.5/10)
  3. Criminal Networks (6.5/10)
  4. Mafia Style Groups (5.5/10)

Corruption in Uganda

Corruption is a significant problem in Uganda. The country ranks 137th out of 198 countries on the Transparency International Corruption Perceptions Index (CPI) with a score of 28 out of 100 in 2019. The Global Report on Trace Bribery Matters assessed Uganda as a “Fragile State” with a “medium” briery risk (Global Report on Trace Bribery Matters, 2018). More than half of Ugandans (51%) have a mobile money account. According to the 2019 Afrobarometer survey, 78% of Ugandans felt that their government was doing a bad job of tackling corruption:

  • 👉 Illicit Flows: Corruption-related illicit flows hinder economic development and the rule of law in Uganda.
  • 👉 Mobile Money: Corruption in the mobile money sector can create vulnerabilities and hamper financial inclusion efforts.

Environmental Crimes in Uganda

Uganda’s forests and wildlife face significant challenges due to illegal logging, wildlife trafficking, and charcoal production, which contribute to widespread deforestation and the loss of biodiversity. According to the National Forest Authority:

  • 👉 Forest Loss: 63% of Uganda’s forest cover has been lost in the past 25 years, and 80,000 hectares of forests are cleared annually to produce charcoal.
  • 👉 Illegal Gold Mining: Illegal gold mining is a significant threat to Uganda’s environment, costing the country approximately $175 million per year.

Organized Crime and Human Trafficking in Uganda

Organized crime, particularly human trafficking and drug trafficking, is a significant concern in Uganda. The Global Report on Trace Bribery Matters identified “foreign actors,” “state embedded actors,” “criminal networks,” and “mafiastyle groups” as major criminal actors. The country’s strategic location and porous borders make it a hub for illicit trade in various commodities (UNODC Global Report on Organized Crime, 2012):

  • 👉 Human Trafficking: Uganda is both a source and destination country for human trafficking, with thousands reportedly trafficked each year.
  • 👉 Drug Trafficking: Uganda’s porous borders make it a transit country for drugs, particularly cannabis.

Countering Financial Crime in Uganda

Despite the challenges, Uganda has taken steps to combat financial crime. The country is a member of the Financial Action Task Force and has signed various international conventions, such as the United Nations Convention against Transnational Organized Crime. The Ugandan government has also established various institutions to address these issues, including:

  1. Directorate of Criminal Investigations
  2. Financial Intelligence Authority
  3. National Bureau of Standards

Conclusion

While Uganda’s natural beauty is a source of pride for its people, the country faces significant threats from financial crimes, including corruption, organized crime, and environmental crimes. These threats hinder economic development and undermine the rule of law. To effectively address these challenges, it is essential that Uganda continues to strengthen its AML/CTF framework and collaborate with regional and international partners to counter these threats and protect the well-being of its citizens.