Local lenders are working tirelessly to assess the risks of their banking relationships with Speaker of Parliament Anita Among after she was sanctioned by the United Kingdom (UK) this past week.
Uganda’s local newspaper the monitor has established that the past workweek’s call logs from the banks captured a frantic scramble as they kept the Central Bank and Uganda Bankers Association officials on the line.
Our sources have confirmed that the local lenders’ enquiries had almost a desperate edge to them as they sought clarity on whether they could continue operating the Speaker’s accounts, especially those denominated in foreign currencies.
On Friday, as Speaker Among used a House sitting to emphatically say “if they (London) feel I have property, go and freeze them (sic) and see if I will complain”, some of the lenders were still establishing whether they can continue a banking relationship with the politician.
On April 30, the UK government for the first time “used the Global Anti-Corruption Sanctions regime on individuals involved in corruption in Uganda”, a statement released by the Foreign, Commonwealth and Development Office disclosed.
Speaker Among as well as Ms Mary Goretti Kitutu and Ms Agness Nandutu, who both previously handled the Karamoja Affairs docket in the Cabinet, were sanctioned for their role in diverting iron sheets meant for the residents of the poor and restive Karamoja region.
“The two former ministers…stole thousands of iron sheets used for roofing and infrastructure from a Ugandan government-funded project aimed at housing some of the most vulnerable communities in the region,” Andrew Mitchell, the UK’s Deputy Foreign Secretary, said, adding, “The Speaker of the Parliament, Anita Annet Among, benefited from the proceeds.”
Fighting back
Speaker Among used the plenary sitting on Friday to make clear that “these sanctions are politically motivated” in reference to the passing of the Anti-Homosexuality Act, which has been criticised by human rights activists and Western governments.
She told MPs: “The Bill that you passed in this House, we are carrying a cross, I’m carrying a cross for the 48 million Ugandans…Me I didn’t even vote. I chaired.”
Although the sanctions are against the three individuals, junior Foreign Affairs minister John Mulimba took the unprecedented step of reading a statement on the floor of Parliament in support of Ms Among.
Minister Mulimba said the UK’s sanctions regime is not alive to the fact that Speaker Among “has not been charged by the Director of Public Prosecutions…” The action also “glosses over the fact that the two cases of [Dr Kitutu and Ms Nandutu] had been uncovered by the government’s own investigative agencies and are currently being handled under the Ugandan courts of law.”
This moved Speaker Among to tell the House that “I’m not worried”, but banking sources indicate that the sanctioned officials will face serious inconveniences in their travel and financial affairs.
Still vulnerable?
Banking industry sources interviewed on the matter said they expect banks with Ms Among’s foreign currency accounts to “restrict access to any funds available while they seek clarity on the extent of the sanctions”.
Ms Nandutu and Ms Kitutu are similarly affected but Ms Among, a former banker herself, is believed to have a more expansive banking relationship.
“I am pretty sure that by now the banks would have contacted these individuals and informed them that they can no longer continue banking [with] them,” an official said. He asked not to be named given the sensitivity of the matter.
“The default is to freeze the account and either ask you to take your money elsewhere or until the Central Bank and the Financial Intelligence Authority give a green light for the accounts to be operated normally,” he added. “I would be surprised if this hasn’t already happened.”
While all affected banks will be assessing these risks, pressure will be mostly on international banks and lenders tethered to the international banking system as well as subsidiary and affiliate banks.
Although the extent of the UK sanctions isn’t immediately clear since this is the first time the law has been invoked, local bankers have some experience with the impact of sanctions that the United States government has previously slapped on Ugandans, including former Inspector General of Police Kale Kayihura, former Chief of Military Intelligence Abel Kandiho, and Justice Moses Mukiibi.
In a 2022 interview with this publication, Justice Mukiibi conceded how the sanctions are almost inconceivable in their scope. His money, not just in the bank, but also on the mobile wallet (mobile money) remains inaccessible.
With most international banking transactions settled in New York, many banks would rather close the accounts of sanctioned individuals than risk getting into trouble with the US government.
To compound matters, the two biggest merchant card payment providers — Mastercard and Visa — are also American, and they would not be able to allow sanctioned individuals to use their accounts.
The impact on mobile money transactions is less clear but as they have corresponding banks in the background to keep and manage the money, they are likely to be similarly affected.
What next?
Because the UK is imposing sanctions on individuals in Uganda for the first time, another source divulged, it is unclear how exactly the sting will look like. The only thing for sure is that the bite will be consequential.
“In the coming weeks, days even, the picture could get clearer,” the source offered.
Since the sanctions were slapped against individuals and not the offices they hold, Minister Mulimba’s statement in the House on Friday marked the first time Kampala was throwing its weight behind an individual.
“The Ministry of Foreign Affairs looks forward to engaging with the British High Commission in Uganda and the government of the United Kingdom, with whom we maintain cordial relations, on this matter while mindful that sovereignty remains a cardinal principle in the bilateral relations between two countries,” Minister Mulimba said in an otherwise measured statement.
As for Speaker Among, she appears to be hedging her bets on President Museveni pulling a rabbit out of a hat. She continues to interpret the sanctions as visceral hostility for conducting traffic as the Anti-Homosexuality Bill (now Act) was green-lit in the House.
“We’ve gotten to know what all those sanctions are about, which the minister of Foreign Affairs [has addressed], and at an appropriate time, the Head of State will also respond to it because it is an indictment to [the] Parliament of Uganda,” she concluded.
Sanctions act
Over the 36 months since UK’s adoption of the Sanctions Act, London has under the law punished 42 individuals and entities in order to combat corruption across the world, according to Foreign, Commonwealth and Development Office.
UK Deputy Foreign Minister explains that persons targeted for sanction are those who facilitate, profit from or try to cover up serious corruption, as well as making efforts to prevent authorities from carrying out justice for these actions.
The Monitor originally published this story
