Unmasking the Hidden Costs: Uganda and the Challenge of Trade-Based Money Laundering

July 19, 2023

Overview

This article exposes the vulnerabilities and consequences of Trade-Based Money Laundering (TBML) within Ugandan economy—a pervasive financial crime that drains valuable resources. A new joint publication by the Advocates Coalition for Development and Development (ACODE) and Global Financial Integrity (GFI) offers an insightful analysis.

The Study: “Trade-Based Money Laundering in Uganda”

Authored by Jane Namubiru of ACODE and Dennis Kabia of GFI, the publication provides an in-depth understanding of TBML susceptible sectors in Uganda:

1. Import and export operations
2. The extractive industry
3. Agriculture

Identified Risks and Challenges

1. Corruption
2. Lack of coordination among stakeholders
3. Insufficient oversight in Free Trade Zones
4. Inadequate understanding of TBML techniques

These factors provide entry points for criminals to engage in illicit financial activities, threatening the Ugandan economy.

Key Recommendations

The report suggests the following measures to counter TBML:

1. Enhance awareness and educate on TBML.
2. Enforce beneficial ownership laws.
3. Encourage data sharing and collaboration.
4. Provide better support and funding for frontline enforcement agencies.

Implications for Development

Illicit Financial Flows (IFFs) pose a major challenge for global development. Uganda, for instance, is estimated to lose more than UGX.2 trillion yearly to IFFs. TBML serves as a prevalent method of money laundering, complicating the detection of these illicit flows and draining resources meant for development.

Conclusion

Combating TBML in Uganda is crucial, as it poses a significant threat to the financial system and economy at large. ACODE and GFI urge a united and proactive approach by governments, financial institutions, and NGOs to counteract this formidable challenge.

Contact

For more information, kindly contact:

1. Jane Namubiru (ACODE): namulorri@gmal.com or jane.namubiru@acode-u.org
2. Dennis Kabia (GFI): dkabia@gfintegrity.org

About ACODE

An independent public policy research and advocacy think tank in Uganda, renowned for its work on public policy matters: https://www.acode-u.org/

About Global Financial Integrity (GFI)

A Washington DC-based research and advocacy group addressing issues surrounding illicit financial flows, corruption, illicit trade, and money laundering: https://gfintegrity.org/