Uganda safe for investment after removal from Finance Grey List

by Christopher Kiiza
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Investors’ confidence increased following Uganda’s removal from the grey list of the Financial Action Task Force (FATF), a global body responsible for combatting financial crimes and terrorism financing.

Finance Minister Matia Kasaija says that this move will potentially lower the cost of conducting business in the country. 

“The removal of Uganda from the “Grey List” represents a significant achievement for our country. It demonstrates the integrity of our financial system, reaffirms our commitment to effective regulation and enhances our standing within the international community,” said Kasaija on Wednesday.

“The message from FATF is clear: Uganda is a safe place to invest,” he added.

The Financial Action Task Force had placed Uganda on its Grey list in 2020 due to deficiencies in anti-money laundering and counter-terrorism financing measures.

FATF removed Uganda from the grey list last week after it determined that Uganda had successfully completed the reforms for combating money laundering, countering terrorism financing and proliferation financing in line with international standards. 

Kasaija highlighted that this development not only enhances investor trust but also strengthens Uganda’s international standing.

“Our removal from the “Grey List” unlocks a host of benefits for Uganda’s economy. It will build investor confidence, reduce the cost of doing business and reinforce our global reputation. We will now have unrestricted access to international markets and credit, providing a vital boost to government’s socio-economic transformation efforts,” he said.

By aligning its Anti-Money Laundering and Countering Terrorist Financing measures with international standards, Uganda can now engage seamlessly with the global financial system.

This will facilitate trade, enhance competitiveness, and provide more opportunities for economic diversification and integration into global value chains.

Black List & Its Implications

Had Uganda failed to fulfill the actions to strengthen its financial system against financial crimes and terrorism financing, the country would be put on black list.

This would have adversely affected the ability of Uganda’s financial institutions to conduct international financial transactions and international business in general.

Furthermore, Uganda would be hit with sanctions, and this would prohibit other foreign financial institutions from dealing with their Ugandan counterparts, potentially crippling Uganda’s financial sector.

Similarly, due to sanctions, Uganda’s foreign investments would be adversely affected since foreign investors would shy away from investing in a country that has been blacklisted by FATF.

Countries that are blacklisted by the FATF and under sanctions include; North Korea, Iran and Myanmar.

The State Minister for Finance in charge of General Duties, Henry Musasizi said Government of Uganda is committed to sustaining the excellent progress it has made. 

This will be achieved through the implementation of a comprehensive post–grey list strategy, including continuous review of Uganda’s legal framework, sustained capacity of all the relevant institutions to effectively combat Money Laundering, Financing of Terrorism and Proliferation and ongoing engagement with the private sector.

“What can we do in order not to go back: we have a taskforce; the anti-money laundering taskforce. It has been working, but we want to strengthen it to ensure that it is efficient, fast tracks and monitors all possibilities of backsliding and ensure that it does not happen again,” said Musasizi.

The Financial Intelligence Authority Executive Director, Samuel Were Wandera said, “what Uganda has achieved is an assurance that our systems internally in Uganda meet FATF standards whereby criminals can no longer use our financial system without detection. It means that the criminals who attempt to use our financial system, we the Financial Intelligence Authority and other law enforcement agencies, and the accountable persons who we call reporting entities are able to detect such funds, and we are able to apprehend these criminals.”

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