Kampala, (UG):- The Central Bank of Uganda has clarified its role in the recent fraudulent transaction through which UGX 60 billion in taxpayers’ money was lost to fraudsters, saying it did not initiate the payment but was following external instructions.
Speaking on Friday about the incident, BoU’s Deputy Governor, also acting Governor, Mr Michael Atingi-Ego explained that the Central Bank acted on directives it received, emphasizing that the fraud occurred outside the Bank’s IT systems.
“These fraud incidents were initiated externally to divert funds. The Bank of Uganda is a paying entity. We receive instructions to make payments, and we execute them as directed,” he said. “To be clear, the fraud did not originate within our IT systems. The Bank was instructed to pay, but the funds were redirected to the wrong beneficiaries. Investigations are ongoing to uncover where the diversion happened, how it occurred, and who was involved.”
While Atingi-Ego did not specify who issued the payment instructions, it is widely understood that such directives typically come from the Ministry of Finance, the oversight supervisor of the Central Bank.
How the Fraud Unfolded
The Deputy Governor detailed the sequence of events leading to the fraud, revealing that two transactions intended for international creditors were misdirected:
On September 12, 2024, a payment of USD 6.134 million meant for the World Bank was instead sent to a company called Roadway Company Limited via MUFG Bank in Japan.
On September 28, 2024, a payment of USD 8.596 million intended for the African Development Fund was diverted to MJS International in London, UK.
Upon realizing that the payments had not reached their intended recipients, the Bank of Uganda launched internal investigations and alerted relevant authorities, including the Criminal Investigations Directorate (CID) and the Financial Intelligence Authority (FIA). The Bank’s primary objective was to recover the misappropriated funds.
Recovery Efforts
Atingi-Ego outlined the recovery process, noting that the Bank immediately instructed its correspondent, Citi Bank, as well as the recipient banks, to freeze the accounts involved in the fraud.
“Our top priority was to recover the funds as quickly as possible. So far, we have successfully recovered USD 8.205 million, which has been credited back to the Uganda government’s consolidated fund account at the Bank of Uganda,” he reported.
However, the recovery effort is ongoing. The Bank is still pursuing the remaining balance of USD 391,000 from the UK-based transaction and has yet to recover the funds sent to Roadway Company through MUFG Bank in Japan. According to Atingi-Ego, the Japanese bank’s lack of cooperation has hindered progress.
“Unlike the UK bank, the Japanese bank has not been forthcoming, but we’re working closely with domestic and international partners, including the Financial Intelligence Authority, to recover these funds. The ongoing investigations and the Auditor General’s independent probe will also aid in this effort,” he said.
Responding to reports that the Bank of Uganda’s systems were hacked, Atingi-Ego firmly denied the claims. “There is no evidence whatsoever of unauthorized access to the Bank’s IT systems. Hacking involves breaching computer systems, and this did not happen. The fraud originated outside our systems,” he clarified.
When asked if any Bank of Uganda staff were implicated in the incident, Atingi-Ego stated, “So far, no staff member has been found culpable.” He reassured the public that the Bank is committed to resolving the matter and ensuring accountability while continuing efforts to recover the outstanding funds.
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