In recent years, Uganda has been experiencing a digital transformation, with significant potential for economic growth highlighted by the GSMA (Global System for Mobile Communications Association). According to a new report titled “Driving Digital Transformation of the Economy in Uganda – Opportunities, Policy Reforms and the Role of Mobile,” released at the GSMA Digital Africa Summit in Kampala, the country could see an economic boost of $4 billion by 2030 through enhanced digital technologies.
The Role of Digital Technology in Economic Growth
The report outlines how Uganda stands to gain economically through digital transformation, which is set to add approximately 14.6 billion Ugandan shillings (around USD 4 billion) to the national economy, create approximately 1.79 million jobs, and connect 4 million more citizens to the internet. Given that mobile connectivity already contributes nearly 9% to Uganda’s Gross Domestic Product (GDP), further advances in this sector can catalyze growth across a variety of productive sectors, including agriculture, trade, manufacturing, and services.
Connectivity Landscape
Despite Uganda achieving impressive 4G coverage—around 96% of the population—and hosting 11.46 million unique mobile internet users, a staggering 75% of individuals under mobile coverage don’t actively use the internet. This low adoption rate is concerning and is attributed to multiple barriers:
- Cost of Smartphones: The high price of entry-level smartphones remains a significant impediment for many Ugandans.
- Energy Access: Inconsistent electricity supply impacts individuals’ ability to use digital devices effectively.
- Sector-Specific Taxes: Various taxes on digital services further complicate access for the average user.
- Lack of Digital Skills: Many citizens lack the necessary skills to navigate the digital landscape effectively.
Policy Recommendations for Digital Inclusion
To tackle these issues and stimulate inclusive growth, the GSMA report advocates for substantial reforms in public policy. Among these reforms are:
Regulatory Stability: Creating a more predictable regulatory environment can enhance public trust and encourage investment.
Tax Reforms: Restructuring the current tax system to better suit the digital economy could ease the burden on consumers and providers alike.
Recognition of Telecom Infrastructure: Officially recognizing telecom infrastructure as critical national infrastructure can provide the necessary support for its development.
Collaboration Across Sectors: Enhanced communication and cooperation between the energy and ICT sectors are essential to overcoming infrastructural challenges.
Smartphone Accessibility: Making smartphones affordable will help dismantle one of the most critical barriers to internet accessibility.
- Legislative Updates: Modernizing laws related to artificial intelligence, cloud computing, and data protection will boost competitiveness and security in the digital economy.
If these recommendations are implemented effectively, the GSMA estimates that Uganda could see 4G coverage expanded to 99% of the population. This could facilitate internet connectivity for roughly 19 million Ugandans, representing about 32% of the overall population and 61% of adults.
The Path Forward
Realigning public policies to better support digital transformation is vital for fostering a more inclusive economy. According to Angela Wamola, the GSMA’s Africa lead, "Uganda’s digital transformation is first and foremost about citizens, entrepreneurs, and communities." Ensuring that access to digital resources is affordable will play an integral role in designing a landscape where progress benefits all.
Conclusion
In conclusion, Uganda’s potential to add $4 billion to its economy by 2030 through digital technologies is monumental. However, unlocking this potential will require concerted efforts from the government, private sector, and development partners. Through public policy reforms aimed at enhancing digital inclusivity and connectivity, Uganda can bridge the digital divide, and in turn, facilitate a robust digital economy that contributes to shared prosperity. By focusing on these initiatives, Uganda can pave the way for unprecedented economic growth, elevate the standard of living for millions, and position itself as a competitive player in the global digital landscape.
