Finance Minister Admits Huge Capital Flight

866 Views Kampala, Uganda

In short
Speaking at a public policy dialogue on revisiting the tax regime at Uganda Management Institute, Kasaija, a golfer, told the attentive audience that a year ago he visited Uganda Golf Club and was shocked with the poor attendance by members.

Uganda has a huge problem of capital flight which is affecting economic activity and growth, according to the finance minister Matia Kasaija.
 
Speaking at a public policy dialogue on revisiting the tax regime at Uganda Management Institute, Kasaija, a golfer, told the attentive audience that a year ago he visited Uganda Golf Club and was shocked with the poor attendance by members.
 
Kasaija said even the few who went to the golf club spent just a short time, spent less or nothing and hurriedly went home, making him wonder what was up.
 
Concerned, Kasaija said he instituted a private research to find out what was happening with once liquid club members. He declined to divulge his findings to the dialogue participants.
 
But when speaking with journalists outside the auditorium, minister Kasaija revealed that the real cause was that government has been doing a lot of business with foreign firms and individuals.
 
According to Kasaija, whenever they released funds every quarter the bulk would go to these foreign firms and individuals who quickly repatriated them to their home countries or offshore accounts.
 
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Minister Kasaija admitted that government indeed does more business with foreigners than Ugandans.
 
Tasked to get a solution to the problem, Kasaija told the journalists to do so.
 
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Capital flight, in economics, occurs when assets or money rapidly flow out of a country, due to an event of economic consequence.
 
This leads to a disappearance of wealth, and is usually accompanied by a sharp drop in the exchange rate of the affected country like depreciation in a variable exchange rate regime.

Most of the foreign companies operating in Uganda are from China, India, other Asian countries and the European Union.

The true extent or percentage of government cash releases that go to foreigners is not clear but should be huge.
 

 

About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."