The government has tapped a familiar foreign currency-printing firm to establish a secure mint for producing physical banknotes, reinforcing Uganda’s sovereignty in a contentious multi-billion-dollar deal that has resurrected the ghosts of past endeavours.
The home-based currency-printing project returns precisely four years and seven months after the passing of former Central Bank Governor Emmanuel Tumusiime-Mutebile, who valiantly opposed the government’s plan for a money-printing facility in Uganda, citing security concerns.
On Wednesday, the President’s Office witnessed the signing of a multi-billion deal between Uganda Security Printing Company (USPC) and Germany-based global currency-printing giant KandB Banknote Solutions.
The deal sets in motion what Presidency Minister Milly Babalanda called ‘the project to establish a sovereign currency printing facility in Uganda.’
She welcomed KandB Solutions to Uganda and expressed gratitude for the start of Uganda’s journey in collaboration for the establishment of a currency printing facility in the country.
‘As we begin on this journey, we expect the MoU to provide a framework for the technical, security, feasibility and commercial work that will guide Uganda towards the final establishment of the printing plant,’ Ms Babalanda said in a statement released on the same day.
President’s vision
The minister confirmed that the project directly supports the long-standing vision of President Yoweri Museveni, based on three important principles: national sovereignty, value addition and capacity building. She also made it clear to the critics that ‘we are not simply installing machines; we are building a national capability.’
Explaining the President’s vision of an independent nation, the minister maintained that
‘Uganda should have the ability to produce important instruments of the State locally, including currency, passports, national identity cards, and academic certificates.’
Article 161 of the 1995 Constitution and Section 20 of the Bank of Uganda Act establish the Bank of Uganda as the central bank with the exclusive authority to issue national currency. It is unclear whether BoU Governor Michael Atingi-Ego and Finance Minister Henry Musaasizi were consulted prior to the government’s finalisation of the MoU with KandB Banknote Solutions.
Governor’s take
In response to inquiries about the deal that seeks to print money locally and its effects on Uganda’s economy, Mr. Musaasizi told this publication yesterday that the issue falls under the Presidency and did not provide further details on the matter.
Responding to the same queries yesterday, the BoU governor told this publication that he had no knowledge of the new proposal for a money-printing factory in Uganda and refrained from commenting on the matter.
Ms Ishta Atukunda, the media section lead at the BoU, confirmed via email yesterday that they received this publication’s inquiry regarding the economic implications of the MoU with KandB Banknotes Solutions and assured that a response will be forthcoming.
Mutebile’s objection
The government’s initiative to set up a money-printing facility in Uganda encountered considerable resistance in the 10th Parliament.
After almost three years of discussions, a security printing agreement was finally reached with the German firm, Veridos Identity Solutions Group. However, persistent disagreements between BoU and the Ministry of Finance officials ultimately forced the government to exclude any plans for money printing.
During most closed-door meetings at the State House and Parliament, Mutebile was unswerving and raised concerns that printing money in Uganda might jeopardise the security of the nation’s currency as a result of ‘incidents of leakages of printing material or knowledge to counterfeiters.’
Although the President, Mr Kasaija, and the then Attorney General William Byaruhanga wanted the currency printed in Uganda to cut costs, Mr Mutebile warned that establishing a currency printing factory in Uganda would plunge the country into problems and that such a factory would be ‘questionable’ and cited lack of capacity.
While the late BoU governor rejected the proposal, Mr Kasaija, in a letter dated October 20, 2017, had made it clear to him that ‘His Excellency, the President guided that Veridos Identity Solutions (GMBH) should also be tasked to print currency in the country’ and that the company had confirmed that it would be in a position to print currency in the country.
Currency production
However, Mr Mutebile insisted that the current suppliers of the country’s banknotes [ De La Rue plc] had extensive experience and capacity and were economically sound and reputable. He also warned those peddling the money printing deal that ‘banknote printing is a very specialised activity that is complex, with high quality and security sensitivity, which a handful of reputable currency printers undertake in the world.’
For more than 50 years, Uganda’s currency has traditionally been produced by the British company De La Rue, in collaboration with various international firms, including Giesecke+Devrient (G+D), a global security technology company headquartered in Munich, Germany, and France’s Oberthur Fiduciaire.
Sources close to the initial deal told this publicationthat undisclosed government officials in the Ministry of Finance had convinced the President that establishing a currency factory in Uganda would cost the taxpayers in excess of $80m (about Shs296.5 billion ). However, officials from the Bank of Uganda and some technocrats from the Finance Ministry put the cost at less than $20m (about Shs74.1 billion).
Economists’ views
Mr Fred Muhumuza (PhD), a notable economist and policy advisor with over 20 years of experience in economic development and governance, spoke of a complex deal trapped in protracted discussions.
‘It has been a long discussion. My worry is, it might be abused [ and when that happens] it can be inflationary.’
The Leader of Opposition in Parliament, Mr Joel Ssenyonyi, opposed the plan and warned the government against ‘putting the cart before the horse’.
He explained that any attempts to bet on establishing a sensitive money-printing factory before ‘draining the swamp’ would be akin to ‘making a hyena the custodian of the meat store.’
‘It’s extremely dangerous to print money in Uganda where corruption is all over the place,’ Mr Ssenyonyi told this publication in an interview yesterday.
‘We have people digging fake graves and planting fake houses in project-areas to siphon money from the government; we have thieves in public and private offices. They are all over the place and the same thieves will eventually break into the currency factory and disorganise the economy.’
Other knowledgeable bureaucrats in the Ministry of Finance and BoU, who didn’t want to be named to speak freely, explained that an economy with increased circulation of stolen money leads to inflation, lower interest rates, and heightened economic growth, while inflation erodes money’s purchasing power, raising the cost of goods and services over time.
Govt defends the deal
The minister, however, clarified that as the government moves towards the final agreement with KandB Banknote Solutions, ‘we expect skills transfer to be a central part of the partnership. Our Ugandan engineers and technicians must be involved from the beginning. They should work alongside specialists during the planning, installation, testing and commissioning and gain the practical skills needed to operate and maintain the facility.’
She revealed that the Office of the President and USPC will establish a multi-sectoral technical committee that brings together key stakeholders, including the BoU, the Ministry of Finance, Planning and Economic Development, the Attorney General’s Chambers, and the relevant security agencies, to establish a formal monitoring arrangement to ensure that progress is regularly measured against the agreed roadmap milestones.
USPC is a Joint Venture company where the Uganda Printing and Publishing Corporation (UPPC) holds a 51 percent stake, making the government the majority shareholder alongside the German Consortium of Veridos GmbH and G+D GmbH, which collectively own 49 percent.
Discounting the fears, the minister maintained that the deal is aligned with the NRM Manifesto 2026-2031, which emphasises the importance of industrialisation, production, and economic transformation.
‘By focusing on local security printing, we are engaging in a high-tech, skills-intensive manufacturing process that supports these goals,’ he said.
That it also consistent with Uganda Vision 2040 and reflects the objectives of the Fourth National Development Plan (NDP IV), specifically in terms of sustainable industrialisation, job creation, wealth generation, and advancements in science, technology, and innovation.