Uganda- the Pearl of Africa

The next country we are visiting in our “Mobile Market Look” series is the East African country of Uganda. Uganda is a small landlocked country surrounded by the Sudan to the North, the Democratic Republic of Congo to the East, Kenya to the West, and Rwanda and Tanzania to the South. An English speaking country, with many local dialects also spoken, and a population of 37.5 million, Uganda has experienced a period of political stability and economic growth. Under the leadership of President Yoweri Museveni, who came into power in 1986, Uganda has seen steady economic growth and currently has a GDP of $21 Billion USD. GDP grew by 5.8% in 2014 with expected growth of 6.6% for 2014 and the economic prospects for this country are looking up.

Business and Economic Environment

Uganda is well endowed with natural resources and agriculture and fishing are two of the biggest industries in Uganda. Up to 80% of Ugandans are farmers and agribusiness is big. Uganda is among the leading producers of coffee and bananas. It is also a major producer of tea, cotton, tobacco, cereals, oilseeds, fresh and preserved fruit, vegetables and nuts, essential oils, orchids, flowers and silk.Kampala__Uganda

Uganda also has its own issues. With a weak infrastructure, lack of education, lack of training, high unemployment (as high as 62% amongst the youth), Uganda ranks 132nd on the World Bank’s Ease of Doing Business List out of 189 countries. The government is also facing an increasing threat from civil unrest. Protests commonly occur in Kampala and have turned violent although foreign interests are not generally targeted. There are moderate risks in areas of terrorism, health, crime, poor transportation infrastructure and Uganda is prone to flooding. Even with these challenges things are looking bright, especially in the area of mobile technology.

Uganda’s Mobile Landscape

Uganda has a young population, the second youngest in the World according to the World Bank. 70% of the population is under the age of 25 and mobile technology is their technology of choice. Uganda has 16 million mobile subscribers and most Ugandans own multiple phones to save money when calling different networks. Mobile providers do not offer contracts to consumers, so consumers purchase calling cards for a set amount of minutes or airtime. Uganda has a huge agency network of kiosks throughout the country where consumers can top up. Street hawkers also sell calling cards on the road, or side of the road, and Ugandans can purchase calling cards from even the remotest part of the country.MTN-mobile-money-customers

The mobile penetration rate in Uganda in 51%. Internet use is also growing as over 6 million people use the internet in Uganda, and of those 6 million people, 95% access the internet via their mobile device. Smartphones are not yet as prevalent in Uganda but Ugandans are still able to access social media via 2G and 3G technology. Ugandans use their phones to check social media, listen to the radio, and check news. Some of the most visited sites in Uganda are Facebook, Youtube, Twitter, Google, and Yahoo.

Mobile money and mobile banking are areas that have a lot of potential and have experienced major growth. Only 20% of the population is banked and 27 million Ugandans are unbanked due to poverty, bank fees, amount of documentation required to open an account, and travel costs. Mobile money has stepped in to meet the needs of this underserved part of the population. 68% of all mobile subscribers in Uganda are aware of and have used mobile money and mobile money applications. Mobile money transfers have grown from 87.5 million transactions in 2011 to 242 million at the end of 2012. The number of mobile money users has grown from 2.9 million in 2009 to over 17 million in 2014. There was an increase of 46% mobile money users from 2013 to 2014 and from June of 2013 to June of 2014 there were 445 million mobile money transactions valued at 22.2 Trillion Ugandan Shillings ($8.4B USD).

Ugandans prefer mobile money because it is a fast service and its’ accessible. Ugandans use mobile money not only to transfer money, but to pay water bills, school fees, and other utility payments such as Pay TV. Utility providers such as Umeme and National Water and Sewerage Corporation (NWSC) have partnered with mobile money service providers to ease payment systems and concentrate on their core businesses of power and water distribution.

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The list of current money transfer and mobile money providers include Airtel (Airtel Money), Africell, Uganda Telecomm (M-Sente), MCash, Yo!Payments , and WorldRemit. The biggest player in the market is MTN Uganda. MTN’s Mobile Money records 25,000 transactions per month and has a subscriber base of 8.8 million consumers.

Mobile money operators are doing well and to increase the levels of awareness for their services they have started to integrate with the banks. MTN joined a partnership with Crane Bank last year to offer MTN Mobile Money as a cash out ATM service. Other banks such as Centenary Bank and UBA (United Bank of Africa) have also gone into partnerships with MTN and other mobile money providers such as Airtel also have their own bank partnerships with financial institutions such as Equity Bank. Mobile money is continuing to grow and as technology and security becomes better will offer more value for their consumers. There is still room for value added services from the mobile money providers and financial institutions for the consumers, but overall the mobile technology space, especially mobile money and money transfers, is expanding and the future of this sector in Uganda is looking promising.

Please visit our “Mobile Market Look” series for Kenya, Nigeria, and Ghana

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