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ICT: a global investment pull

Article - August 4, 2014
The nation’s information and communication technology (ICT) sector has registered astronomical growth over the years, and is ranked amongst the fastest growing in Africa. Uganda and its friendly business environment bring a wide range of hi-tech opportunities in areas such as data, mobile banking and fiber-optics.
INVESTORS ARE BEING SOUGHT TO ROLL OUT FIBER-OPTIC CABLE AROUND THE COUNTRY, TO ENABLE 4G TECHNOLOGY TO BE DEPLOYED. AT PRESENT, ONLY AROUND 8,000 KILOMETERS OF FIBER-OPTIC CABLE HAVE BEEN LAID IN THE 240,000KM2 COUNTRY.
For years, Uganda has regarded its ICT sector as a driver of economic growth. With more than 80% of the population living outside cities, the government created the Rural Communications Development Fund (RCDF) in 2003 to deploy telephone, Internet and postal services in rural areas. The aim was to promote social equity and cohesion.

Omnipresence – universal access in rural areas

The RCDF has, in just over a decade, helped to provide every public secondary school in Uganda with computer labs, ICT Minister Nyombi Thembo says, adding that, “We are also connecting them to the internet.”

Providing rural schools with hardware, getting them online and tweaking the curriculum has helped children in remote communities to compete academically with their urban counterparts, who have traditionally outshone the country youngsters, Mr. Thembo says.

ICT has also positively impacted the agricultural sector, in which eight in 10 Ugandans make a living. Developers have come up with a smartphone app that identifies plant diseases and recommends a cure, for instance. And a group of young Ugandans won last year’s Women’s Empowerment Award at Microsoft’s global student software competition, the Imagine Cup, in Russia. The Ugandan youngsters developed an app that allows anyone with a smartphone and a custom piece of software to see if they have malaria, without drawing blood or waiting days for lab results. That project is looking for investors.

Mobile financial services


Mobile money services have helped to give the unbanked – many of whom live in rural areas – access to financial services. The number of mobile money subscribers rose from 8.87 million in December 2012 to 14.2 million a year later.

“We are actively encouraging value-added services deployments and innovative technology adoption. The sky is the limit.”

Godfrey Mutabazi,
Executive Director of the UCC

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“ICT is actually transforming our country. It is truly the prime mover of the economy, and we are happy to be part of that revolution.”

Nyombi Thembo,
Minister of State of ICT
Uganda’s burgeoning telecommunications sector is regulated by the Uganda Communications Commission (UCC), whose mandate covers broadcasting, telecommunications and postal/courier services. Godfrey Mutabazi, Executive Director at the UCC, says, “UCC’s technology-neutral and firm regulatory oversight has led to significant decreases in retail prices of communications services in Uganda, among others, invariably enabling Ugandans to enjoy affordable and easily accessible communications services.”

The regulator is also proactively promoting state-of-the-art telecom services nationwide, working with universities and regularly participating in local event projects. “We are sponsoring mobile-telephone distribution, and soon we shall cover the entire country. We are one of the few countries that have achieved 100% GSM coverage and a penetration of over 95%,” says Mr. Mutabazi.

E-Government

While Uganda’s burgeoning telecommunications sector is having a visible positive impact on people’s lives, it is also benefiting them in ways that they do not immediately see. ICT makes it easier to communicate with members of the government, because each ministry is required to have a working, up-to-date website.

Investment attraction

The government’s role in ICT development is to ensure that policies are investor-friendly “so that we get more capital coming into the sector,” Mr. Thembo says.

“We can see that communications is actually transforming our country. Tax contribution is close to about 400 billion Ugandan shillings (around $150 billion). The industry employs more than a million people (directly and indirectly). It is truly the prime mover of the economy, and we are happy to be part of that revolution,” he adds.

Currently, Uganda has seven cell phone service providers and around 19 million phone lines for a population of around 36 million. Internet penetration is only around 22%.

“When you consider the size and demographic of the population of the country – more than 65% below the age of 15 – this creates a huge potential for future demand,” says Mr. Thembo. So, too, does the fact that economists are forecasting that Uganda will be a middle-income country in just over a decade.

Uganda is also looking for investors to roll out fiber-optic cable around the country to enable 4G technology to be deployed. At present, only around 8,000 kilometers of fiber-optic cable have been laid in the country of 240,000 square kilometers.
U.S. ICT companies are already present in Uganda, supplying the East African country with hardware, software and infrastructure, but there is room for even more outside investment in Ugandan ICT.

“With an increasing population, improving standards of living, expanded infrastructure deployments and investment, high literacy and quality education and a young tech-savvy population, the sky is the limit,” says Mr. Mutabazi.
“We are actively encouraging value-added services deployments and innovative technology adoption, and we foresee a bright future for Uganda.”

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