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THE LINK BETWEEN MOBILE MONEY AND FAKE MONEY

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 by Fred Muwema 
The recent  story  about  the URA seizure  of  counterfeit  currency  notes worth Ushs.189M at the Busia  Border  on the 22nd /10/17 was significant  in many  ways. First it gave a clear indication that there is demand for counterfeit money in Uganda which explains why the culprits could risk importing it. Second, the demand for counterfeit money is channeled through the uncontrolled growth of mobile money transaction whose value is now in excess of Ushs. 15 trillion (approx. $  4Bn).

Despite  its strong  economic attributes which includes the promotion  of  financial inclusion ,the mobile money  platform  in Uganda  today  provides  the weakest  link  in our  financial  system .It provides  the easiest  entry  point  for fake  money  and I have no doubt  that the impounded counterfeit  money was intended for the  mobile  money market.

Many  unbanked  Ugandans who cannot take  advantage  of the high  precision  and sophiscated note sorting machines  that banks  use to  protect  customers  against  fake money are  suffering  on a daily basis without recourse. When Ugandans  receive fake money  which  they cannot detect  from  some mobile  money agents who exploit a system  wanting  in rigorous risk and compliance safeguards coupled  with an unreliable consumer protection mechanism, they are  beside themselves with misery. The dearth of a national payment system, inadequacies of the Bank of Uganda mobile money regulations 2013 and the mis-regulated role of Telecoms as financial service providers of mobile money only helps to compound matter.
Apart from counterfeit money , other  scams are thriving  on the  mobile money platform  because of poor  regulation .To appreciate  the endemic  level  of the problem  you  need to check  out  the New Vision  newspaper  stories in the month of October ,2017 alone under the following titles;
·         Government officials conned in new mobile money scam, 19th October, 2017 P.4.
·         Mobile money scam; MTN to assist conned customers, 21st October, 2017.
·         Legislators fault Bank of Uganda over mobile money transactions, 25th October, 2017 P.6.
·         MPs question safety of mobile money transactions 27th October, 2017 P.6.


Counterfeiting of any product is very dangerous but the counterfeiting of money must rank very high. I agree with Oscar  Zach  when he writes in his article titled ‘’The importance  of money’’ published  on the  24th June,2014 that  money indictates  the flow of human  living  in the modern  world. Without money, life is often difficult and painful. We should  be very  concerned  that if money  which  dictates  the flow  of life  can be  counterfeited ,what  else can not be .What  will happen  if currency  note detectors  which  are supposed to detect  fake notes are also  counterfeited?

It is already  very difficult and painful for Ugandans  to find work  and earn  a decent income .That their  meager  income can be  lost  to counterfeit currency  notes  smuggled  across our  porous  borders  must call  for emergent  action. The commendable effort by URA in impounding the counterfeit money must not be stymied by inaction from our financial regulators. Government must show more interest in protecting its legal tender than the counterfeiters are interested in imitating it. The  public can help  government  in this  effort  if it is made aware of the security  features of the  genuine  money so that  it  is easy to identify  the fake  money through concerted awareness campaigns. Unless preventive measures are put in place swiftly, mobile money will continue to grow as the fake money grows.


                                                        Dated: 1st December, 2017.
                           by Fred Muwema  (Director Legal and Corporate Affairs, ACN)
                                                       © 2017. All rights reserved



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