Printing of Uganda currency notes locally will kick off next year following the construction of a printing factory in Entebbe, the New Vision has learnt. 

On June 11, 2016, a joint venture agreement was penned between Uganda Printing and Publishing Corporation (UPPCL), the Ministry of Finance, Planning and Economic Development, the Office of the President and the consortium of Veridos GmbH and Giesecke and Devrient GmbH, to produce security documents like Bank notes, passports, national IDs and cheques. 

The penning of the agreement meant that the UPPCL and Veridos Identity Solutions Group would join forces to print security documents locally.

Whereas national IDs and cheques are currently being printed at the UPPCL factory near Uganda Railways headquarters in Kampala, the printing of currency notes is awaiting completion of the firm’s factory in Entebbe. 

“Our Entebbe factory is 70% done and its completion will be followed by installation of specialized machines which we will use in the production of currency notes,” said a UPPCL official on condition of anonymity. 

He however disclosed that all the raw materials they use for production of the documents are imported from Europe, which makes the process expensive. 

The Auditor General had however earlier warned about the monopoly that was likely to arise from the joint venture. 

“Clause 20.2 states that the joint venture firm will be the exclusive supplier to the company of raw materials and semi-finished products manufactured by the consortium," reads part of the recently issued Auditor General’s report to Parliament for the Financial Year ended 30th June 2022. 

It further revealed that the joint company was also made the preferred supplier of materials not manufactured by the company and that the consortium, for the duration of the agreement, shall be the exclusive supplier to the company of machinery manufactured or not manufactured by the consortium. 

“In light of the above, the Consortium shall be the sole supplier for 15 years – which exposes the country to the risk of contract locking and manipulation arising from monopoly,” further reads the report, issued by John Muwanga, the Auditor General. 

He defined vendor lock-in, also called proprietary lock-in or customer lock-in, as a technique used by some technology vendors to make their customers dependent on them for products and services by making it hard to switch to a competitor without substantial costs or difficulty. 

“This is done by developing solutions that are platform-dependent and that only run with limited, third-party partners. The dependency is usually created using standards that are controlled by the vendor and which grant them a level of monopoly power that becomes increasingly profitable because of the dependencies they have created,” said Muwanga. 

He added that under such circumstances, the vendor product will be incompatible with other hardware, operating systems, or file formats, which forces the customers to continually purchase more products from the vendor and their small group of partners. 

During the time of the signing, President Yoweri Museveni was quoted as saying that there was hemorrhage of resources that was unjustified through the printing of local currency abroad. He said about $25m was being spent each year to print Ugandan currency.