In a renewed effort to combat financial crime, financial institutions and telecom service providers recently launched a major initiative aimed at addressing fraud across the country.
Dubbed the Financial Sector Anti-Fraud Consortium (AFC), the initiative unites regulators, financial institutions, payment service providers, operators, law enforcement agencies, professional bodies, and technical and development partners in a coordinated response to financial fraud.
Fraud has been identified as a national threat that undermines economic stability, erodes public trust in institutions, and weakens the foundations of the economy. According to the 2024 Annual Crime Report, police registered 110 cases of bank and other corporate fraud crimes, accounting for 0.8 per cent of all economic crimes reported nationwide.
These crimes manifested in various forms, including money laundering, corporate fraud, terrorism financing, human trafficking, forgery and extortion. In 2024 alone, the Criminal Investigations Directorate (CID) reported that Ugandans lost more than Shs 785 billion to criminal activities.
Of this amount, Shs 474 billion was stolen through false pretences, with only Shs 10 billion recovered. Speaking at the launch event held at Mestil hotel, Dr Tumubweinee Twinemanzi, the executive director of the National Payment Systems at the Bank of Uganda, emphasized that fraud is not just about stolen money, but a national threat.
“Fraud undermines economic stability, erodes public trust in institutions and systems, and shakes the foundations of our economy. As we become increasingly digital, which is positive, the threats also become more sophisticated,” he said.
Dr Twinemanzi noted that the AFC seeks to proactively anticipate, detect, prevent and respond to financial fraud with clarity, consistency and coordination.
“We will ensure strict compliance with national and international anti-fraud frameworks, and provide the necessary support to institutions under our oversight. No institution, whether a bank, fintech, payment service provider (PSP), or payment system operator (PSO) will be exempt from the duty to protect the Ugandan consumer,” he said.
“Financial fraud cannot be left to only financial sector players. Everyone has a role to play — including providing information about fraudsters, their collaborators, the systems they exploit, and supporting their apprehension and prosecution. We must stay ahead of evolving fraud techniques,” he said.
Jane Frances Abodo, the director of Public Prosecutions, echoed these concerns, likening the financial and payment systems of any economy to a human body’s circulatory system.
“Our financial system enables the valuation, storage, exchange, multiplication, and taxation of goods and services. Sadly, bad actors have turned fraud into a full-time occupation, leveraging increasingly complex methods, particularly with the growing use of technology,” she said.
Abodo warned that fraud targeting financial institutions and payment systems not only harms the economy by eroding public confidence but also poses serious security risks, undermining Uganda’s reputation as a safe destination for investors and visitors.
She highlighted the rise in cybercrime, identity theft and mobile fraud, noting that these crimes have evolved from individual risks to tools for broader criminal enterprises, including money laundering and terrorism financing.
“Fraudsters often escape justice due to insufficient evidence, lenient sentences, or weaknesses in the legal framework, allowing them to continue advancing their criminal activities,” she said.
Abodo further pointed to internal control weaknesses within financial institutions, insider collusion and public ignorance as key factors that enable fraudsters to thrive.