Oil money raises money-laundering fears in Bunyoro

The oil boom is transforming Bunyoro into one of Uganda’s fastest-growing economic zones, but the Financial Intelligence Authority (FIA) is warning that the surge in money and investment could also create fresh avenues for criminals to launder illicit proceeds.

The authority has identified land transactions, money lending, corruption in local governments, cross-border trade and smuggling as potential vulnerabilities as oil and gas investments accelerate economic activity in the sub-region.

Ms Monica Ndyamuhimbise, the FIA Principal Compliance and Outreach Officer, said the growing volume of money circulating in Bunyoro requires closer scrutiny of financial transactions and the sources of funds.

The discovery of oil has attracted investors, businesses and workers to the region, increasing demand for land and other commercial activities.

But the same economic growth, she said, could be exploited by individuals seeking to conceal or move proceeds of crime.

“Everyone knows … there is oil,” Ms Ndyamuhimbise said, warning that the growing economic activity requires greater vigilance.

Land transactions are particularly vulnerable because large sums of money can change hands, making it important for financial institutions and businesses to establish the source of funds before completing transactions.

The region’s proximity to the Democratic Republic of Congo also presents additional risks because of cross-border trade and the movement of minerals and other goods.

The FIA did not, however, cite a specific large-scale money-laundering case in Bunyoro during the media engagement. The concerns were presented as potential risks arising from the region’s expanding economy, oil-related investments and cross-border commercial activity.

Badru Mugabi, the Hoima Resident City Commissioner, said local crime reports have identified land grabbing, money laundering and corruption in local governments among financial crimes of concern.

He said the rapid development triggered by the oil and gas industry had increased the amount of money circulating in the region, potentially creating opportunities for criminals.

“I trust that … fighting money laundering,” Mr Mugabi said, calling for greater cooperation among government agencies involved in combating illicit financing.

He urged journalists to pay greater attention to financial crimes, saying illicit financial activities can have consequences beyond individual victims and affect the wider economy and national security.

The official also cautioned members of the public and businesses against accepting large sums of money without establishing their source.

Individuals who knowingly or unknowingly facilitate the movement of proceeds of crime can face legal consequences, he warned.

“Uganda has since … politely adduce evidence,” Mr Mugabi said, urging journalists to rely on evidence when reporting suspected financial crimes.

Jossy Muhangi, the FIA Principal Communications Officer, said cases involving suspected money laundering and other financial crimes are referred to relevant government agencies for further investigation.

These include the Uganda Revenue Authority, the Inspectorate of Government and the Criminal Investigations Directorate.

Mr Muhangi urged journalists investigating financial crimes to rely on financial records, official documents and other verifiable evidence, while giving all parties an opportunity to respond to allegations before publication.

The FIA’s concerns come as Bunyoro undergoes rapid economic change driven by oil and gas development, infrastructure investment, construction and expanding commercial activity.

The region is at the centre of Uganda’s emerging petroleum industry, with major investments expected to increase economic activity around Hoima and the wider Albertine region.

For financial crime investigators, the challenge is to ensure that the growing flow of legitimate money does not provide cover for proceeds generated through corruption, smuggling, fraud or other criminal activities.

The FIA’s warning therefore places financial scrutiny alongside the broader economic opportunities created by the oil boom, as authorities seek to prevent Bunyoro’s transformation from becoming an avenue for illicit funds to enter the formal economy.