The price of trust: How fraudsters are paralysing small businesses in Uganda 

By Richard Sebaggala

 

I was going to spend the weekend writing about artificial intelligence — its rise, its potential and what it means for our future. But then something happened that completely changed my focus. It was a story that reminded me how fragile the lives of ordinary business people in Uganda can be.

On Friday 16 May, while shopping in the town of Mukono, I ran into a friend I hadn’t seen for years. She used to run a wholesale business in Watoni. After a brief greeting and trying to remember where we had last seen each other, she told me what had happened to her.

Her story was painful to hear.

Some time ago, three men entered her shop and pretended to be procurement officers from Mukono High School. They said they were buying food for the secondary school and the sister primary school. The list included rice, sugar, posho and other food items. After selecting the items, they loaded everything on a lorry and asked her to prepare the receipts. They told her she would accompany them to the school, deliver the goods and receive payment directly from the school bursar.

 

Everything seemed legitimate. The school was nearby. She even spoke to someone on the phone who introduced herself as the school's bursar and confirmed that they were expecting the delivery. When they arrived at the school gate, the security guard said the bursar was in a meeting, which matched what she had been told on the phone. This small detail convinced her that the transaction was genuine.

She got out of the lorry and waited inside the school while the men said they would first deliver the goods for the primary school, which were supposedly packed on top. She waited. And waited. But the lorry never came back. Only later did she learn that the school’s real bursar was a man. The woman on the phone had been part of the scam. The men had disappeared with goods worth 35 million shillings — her entire capital. Just like that, everything she had built up was gone.

Her troubles didn’t end there. Not long after the incident, the landlord increased the shop rent from 800,000 to 1.5 million shillings and demanded payment for a whole year in advance. With no stock and no money, she had no choice but to close the shop. She tried to start again in Bweyogerere, hoping for a fresh start, but the business never took off. That was the end of her life as a businesswoman.

 

As she told the story, there was a serenity in her voice that hid what she had been through. She had come to terms with it. But I left the conversation feeling heavy, troubled and angry — not only about what had happened to her, but also about how common stories like this are.

 

Uganda is often referred to as the most entrepreneurial country in the world. Our start-up rates are among the highest in the world. But behind this headline lies a sobering reality. Most Ugandan businesses do not survive beyond the first year. Over 70 per cent collapse within five years. While lack of capital, poor business planning and market saturation are common explanations, we rarely talk about the threat of fraud and con artists.

 

The trick used on my friend was not a matter of bad luck. It was well planned and carefully executed. And unfortunately, such scams are not uncommon. Every day, small business owners fall victim to similar tactics. Years ago, there was a television programme that exposed how these scammers operate across the country. The programme was both fascinating and frightening. The scams were sophisticated, clever and disturbingly effective.

 

If someone took the time to document these tricks in detail and profile them, I believe the results would shock the nation. We are losing billions of shillings, not through the economic downturn, but through manipulation and fraud.

 

The very next day, on Saturday the 17th, my own car was stolen while I was attending a funeral. This story deserves its own space. But it got me thinking about how easily things can be taken from us, no matter how careful or prepared we think we are.

 

There is an urgent need for practical business education that goes beyond accounting and customer service. Entrepreneurs need to be trained to check transactions, recognise manipulation and protect themselves. Fraud awareness should be part of every entrepreneurship course and support programme in this country.

 

At the same time, we need laws that treat economic fraud with the seriousness it deserves. These crimes don't just hurt individuals. They undermine economic confidence and discourage hard work and initiative. We also need awareness-raising campaigns and media platforms that educate the public about these risks clearly and understandably.

Trust should be the foundation of business. But in today's Uganda, trust has become a dangerous gamble.

We can no longer ignore this crisis. We need to talk about it. We need to listen to those who have suffered and learn from their experiences. And we need to build systems that protect the honest and penalise the cheats.

To anyone who has lost a business, not because of bad decisions, but because someone took advantage of their trust, you are not alone. Your story is important. And it needs to be part of the national conversation about what it really means to be an entrepreneur in Uganda.