Bank of Uganda faces scrutiny over Shs 140bn Haba Group guarantee

Uganda’s Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has pressured the Bank of Uganda (BoU) to explain its failure to recover Shs 140.487 billion linked to a loan guarantee issued to Haba Group Ltd nearly nine years ago.

The exposure stems from controversial compensation paid to businessman Hassan Bassajjabalaba and his companies following the government's cancellation of leases for several Kampala markets and Constitutional Square. While the funds were drawn from the BoU and backed by guarantees to commercial banks, the recovery process has stalled.

During committee hearings, BoU officials stated that the guarantee was issued following instructions from the Ministry of Finance. The central bank's head of legal, Dorothy Masifa Ochola, noted that the institution has been engaging the ministry and external lawyers to resolve the matter. However, COSASE Chairperson Muwada Nkunyingi criticized the delay, questioning why the bank had not pursued legal action or direct engagement with the Haba Group to rectify the situation.