A story is told of a former Governor of Bank of Uganda who was killed after defying orders from President Idi Amin to print money. It is reported that Joseph Mubiru, was summoned by Amin and asked to release money urgently. The governor told Amin that the treasury did not have money.
A story is told of a former Governor of Bank of Uganda who was killed after defying orders from President Idi Amin to print money. It is reported that Joseph Mubiru, was summoned by Amin and asked to release money urgently. The governor told Amin that the treasury did not have money. The incensed Amin said if there was no money he should print it.
But the governor advised the president that printing more money would make it useless and its value would be as low as that of toilet paper. Mubiru further argued that printing more money would only worsen the inflation problem in the country.
It is said that Mubiruâ€™s statement angered Amin and he ordered for his killing. Mubiruâ€™s death forced many Bank of Uganda workers to flee into exile including the former president general of the Democratic Party, John Ssebaana Kizito.
During the post independence period until 1987, the change of bank notes or currency reforms was mainly dictated by political reasons. As a result, Uganda has seen currencies change as many times as the change of governments since independence.
The unveiling of new bank notes recently has resurrected the old debate of politics and currency reforms. Bank of Uganda (BoU), for the first time in the history of the countryâ€™s currency reforms, announced that the new notes did not constitute a currency reform, nor were they dictated by politics.
Politics dictates design Emmanuel Tumusiime Mutebile, BoU chief, says over the years, the bank has issued new currency notes mainly for political reasons, usually after a change in government.
â€œThis is the first time that BoU has introduced new notes on its own,â€ he says. BoU says the re-design was driven by the need to comply with international practices and to beat counterfeiters. The journey of Ugandaâ€™s currency can be traced back to the first Ugandan shilling (UGS) which replaced the East African shilling in 1966.
Following high inflation, a new shilling (UGX) was introduced in 1987 worth 100 old shillings. The shilling is now a stable currency When former president Milton Obote assumed power in 1966 after abrogating the constitution, his government printed new bank notes. But the notes largely bore features that praised the Uganda Peoples Congress Party (UPC). A palm, the popular political symbol of UPC was put on every note. The notes were in denominations of five, 10, 20 and 100.
But when Idi Amin deposed Obote in a military coup in 1971, he started a culture that would change the face of bank notes in the country. Amin placed his well decorated portrait in army fatigue on every denomination, becoming the first head of Uganda to put the presidentâ€™s face on money donning military fatigue. He did this on all the denominations of five,10, 20 and 50.
When Idi Amin was over thrown in 1979, the bank notes were changed and his face removed from the new notes. In 1983, Obote took over power again after general elections were held. These elections were marred by rigging and mal-practises, forcing a protracted guerilla war led by President Museveni.
Obote made a currency reform again, putting his picture on every denomination. The portrait of Obote donning the famous Obote hair cut was the face of all bank notes. Although previous bank notes had pictures of presidents, they also had other features which showed Ugandaâ€™s heritage.
The natural resources like wildlife, culture, cash crops like coffee and cotton, the crested crane and the court of arms were common on the notes. Until 1986 when the NRM government took over power, you could track a sequence of political influence in the way features of bank notes were made and currency reforms carried out.
Who designs bank notes?
Wozei Muloni, an economist and graduate of Havard University, says economists deal with the intrinsic value of money; its real essence as a tool of economic activity.
On the other hand, designers work on its shape and design. However, Wozei says the design includes features that should make it hard for the notes to be duplicated to avoid making it easy for people to make counterfeit notes.
The redesign BoU hired professional artists and designers led by Gen. Elly Tumwine, to design the new notes which were released. The development is a major redesign of the currency since 1987. While most of the notes are in the familiar denominations of sh50,000, sh20,000, sh10,000, sh5,000 and sh1,000, the bank also introduced a sh2,000 note.
In 2005, BoU considered replacing the low value notes such as the sh1,000 with coins. The lower denomination notes take a battering in daily use. In the 1987 currency reform, two zeros were slashed off the old notes. But there was also a change in the way the features of the denominations would appear.
The new notes mostly bore features of the countryâ€™s natural resources. Later all notes below sh1,0000 were phased out and replaced with coins.
44 years of money in Uganda