By Odoobo C. Bichachi, Patrick Kagenda & John Njoroge
A whopping Shs 900 million in cash under the pillow, in the mattress cover or somewhere in a wardrobe in the master bedroom! Wherever National Forestry Authority (NFA) executive director, Damian Akankwasa, kept his money, the revelation last week that his wife Juliet Katusiime could have stolen it has raised more questions than sympathy for him at the colossal loss.’
Why would anyone keep such big amount of money in the house? Where did he get it from? What does he do to earn such money?
Akankawasa was hitherto not known to be one of the rich people in Uganda. He joined the NFA two and a half years ago after working at the Uganda Wildlife Authority (UWA) where he was the director of tourism. While at UWA, Akankwasa was earning Shs 2 million as gross salary.
At the NFA he bags Shs 14 million gross salary in addition to Shs 1 million entertainment allowance per year. He is also entitled to US $2,000 in house rent per month. He however moved out of the official NFA rented house and had the board approve for him a two-year rent advance in cash that totalled to $48,000 (Shs 91.2 million at the exchange rate of 1900).
With a net official salary of about Shs 8 million, it would take Akankwasa at least 10 years to accumulate the Shs 900 million that he lost, and that assumes he does not touch a single cent of it. Clearly, it is not possible that Akankwasa had saved this money because he has to eat and fend for his family, and he has not completed three years at NFA, having joined in June 2007. This money could therefore only have been accumulated through business transactions, or corruptly using his position as head of NFA.’
Yet this is not the first time a senior public officer has lost big money from their home. In the early 2000s, a house attendant of a senior army officer (names withheld) stole a huge stash of money from his master’s bedroom and hid it in the garbage collection container. Unfortunately, the house-help too lost the money when an unscheduled garbage collection truck came to the scene, and its turn-men and residents nearby scrambled over the money that was exposed when garbage was being loaded onto the truck. The army officer never registered an official complaint, let alone publicly admitting it was his money, possibly because he could not explain the source of the money.
Again in 2005, a senior official (names withheld) at the Electoral Commission lost US$200,000 (about Shs 380 million at the current exchange rate of Shs 1,900) to his houseboy who found it lying somewhere in the house ‘ most probably in the bedroom. He too never publicly complained. The houseboy fled the country with the money.
For both cases, it was inconceivable that the lost money was their personal saving from legitimate earnings given their known salary scales. Considering the incidents of unexplained wealth in the country, especially among senior public servants, it is possible many similar cases have happened without coming to public attention.
Why under the pillow?
The question therefore is; with so much risk of theft, why do some people still keep such big sums of money in their houses?
‘People are getting funny money and fear keeping it in the banks. It defies logic why people would keep cash. You ask yourself what is in the person’s mind and where did the money come from? It is people wanting to hide because of doing things underground,’ opined Patrick Mutumba, the investment manager at Stanbic Bank. He adds ‘there is no law limiting people on what amount of cash to keep. Previously they kept dollars but events have shown that local currency is safe because dollars are now losing value. Dollars bought in September when it was above Shs 2,000 have now lost close to 25% value.’
The dollar is now at Shs 1,900.
Kenneth Kitariko, the general manager of African Alliance stock brokerage investment banking, says, ‘keeping money in homes is a result of people being uncomfortable with keeping money in banks.’ They fear being probed about the source of the money. In the US when you bank $10,000 cash, you have to explain its source. Here, commercial banks have to report to Bank of Uganda the unexplained huge deposits.”
This was confirmed by Joy Kahwa, the deputy communications director at Bank of Uganda, who said: ‘There is no law limiting what amount one should bank or have in cash. It’s only that banks sometimes are concerned about how you got that money. It’s the anti-laundering law that will look at how huge amounts of money are got.’
But what does keeping such huge amounts of cash at home mean for the economy?
Impact on economy
Statistics from the Bank of Uganda indicate that as at July 2009, the amount of money in the economy was about Shs 6.2 trillion (Shs 6,165.55 billion) of which Shs 4.9 trillion (Shs 4,895.02 billion) is held in the various commercial banks. The real cash in circulation is therefore about Shs 1.3 trillion (Shs 1,270.53 billion).
It is out of this that Akankwasa alone had Shs 900 million stacked at his home which was later allegedly taken away by his wife.
Bank of Uganda says the ratio of currency in circulation to non-banking public and non-government deposits is 20.6%. This ratio has declined from 22.9% in July 2007 to 21.9% in July 2008. However these deposits have grown by 19.26%, 30.33%, and 22.65% on an annual basis in July 2007, 2008, and 2009 respectively.
Banks fund economic activity through extension of credit from funds deposited with them. Notwithstanding other factors, the more deposits in the banking system the more funds are available for credit and therefore economic growth.’
‘Its effect on the economy is that it does not accrue wealth,’ says Kitariko.