Uganda Ink on Local Currency Production Plans

The Ugandan government is embarking on a significant initiative to establish a domestic facility for printing its physical banknotes. A multi-billion-shilling deal has been inked between the Uganda Security Printing Company (USPC) and Germany’s K&B Banknote Solutions, marking a renewed push for national sovereignty in currency production.

This endeavor aligns with President Yoweri Museveni’s long-standing vision of self-reliance, aiming to bolster national sovereignty, add value locally, and build capacity within Uganda. Presidency Minister Milly Babalanda emphasized that the project is about developing national capability rather than merely installing machinery, envisioning a future where Uganda can locally produce critical state instruments like currency, passports, and identity cards.

The plan, however, echoes a similar proposal that faced strong opposition from the late Central Bank Governor Emmanuel Tumusiime-Mutebile. He had voiced significant security concerns, warning that printing money locally could jeopardize the nation’s currency through potential leakages of printing materials or knowledge to counterfeiters. Mutebile also cited a lack of capacity as a potential pitfall.

It remains unclear if the current Bank of Uganda Governor, Michael Atingi-Ego, and Finance Minister Henry Musaasizi were consulted on this latest MoU. While Minister Musaasizi deferred questions to the Presidency, Governor Atingi-Ego stated he had no knowledge of the proposal.

Economists express a mix of caution and concern. Dr. Fred Muhumuza noted the protracted discussions surrounding the deal and warned of potential inflationary risks if the project is mismanaged. The Leader of Opposition, Joel Ssenyonyi, strongly opposed the plan, likening it to putting a hyena in charge of a meat store and deeming it “extremely dangerous” in a context of pervasive corruption.

Despite these concerns, the government maintains that the project will involve substantial skills transfer, with Ugandan engineers and technicians working alongside international specialists. A multi-sectoral technical committee, including representatives from the Bank of Uganda and the Ministry of Finance, will be established to monitor progress. The USPC is a joint venture where the government holds a majority stake.

This initiative is presented as consistent with the NRM Manifesto and Uganda Vision 2040, emphasizing industrialization, job creation, and technological advancement.

Source: Daily Monitor (Uganda)