THE STATE OF ICT IN UGANDA - ALISON GILLWALD, ONKOKAME MOTHOBI, ALI NDIWALANA AND TUSU TUSUBIRA - Research ICT Africa
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THE
STATE
OF ICT IN
UGANDA
ALISON GILLWALD, ONKOKAME MOTHOBI,
ALI NDIWALANA AND TUSU TUSUBIRAACKNOWLEDGEMENTS
This research was made possible by the support received from Canada’s International
Development Research Centre (IDRC and SIDA). The nationally representative ICT access and use
survey referenced in this report forms part of a survey of 22 countries in the Global South (10 in
Africa) that canvasses barriers to access from those not connected, as well as the challenges to
optimal Internet usage even where there is coverage or the individual has connectivity (see After
Access 2017). It draws on ongoing policy research and indicator development done in conjunction
with the International Telecommunications Union (ITU). This national survey was undertaken
with the assistance of the Uganda Communications Commission, the National Information and
Technology Authority-Uganda, the Ministry of ICT and National Guidance, and the Uganda Bureau
of Statistics. Research ICT Africa’s Uganda partners: Eng. Dr F. F. “Tusu” Tusubira and Ali Ndiwalana
of Knowledge Consulting (KCL), led the fieldwork for which training was performed by Dr
Onkokame Mothobi and was also supported by Jan Schenk of ikapadata. The report was prepared
by Dr Alison Gillwald and Dr Mothobi with Dr. Tusubira and Ali Ndiwalana.
Policy Paper Series No. 5 After Access: Paper No. 8
The State of ICT in Uganda
https://researchictafrica.net/2019_after-access-the-state-of-ict-in-uganda/
May 2019
SERIES EDITOR: ALISON GILLWALD
Assistant to Editor: Broc Rademan
Proofreading: Lee Smith
Typesetting: Karen Lilje
info@researchictafrica.net
Research ICT Africa
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Woodstock, 7925, Cape Town, South Africa
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Centre de reserches pour le développement international
iiEXECUTIVE SUMMARY
In line with global commitments to improve digital affordability level revised from five percent to two percent
inclusion and to realise the Sustainable Development of average national income, 500MB of data should
Goals for 2030, the Government of Uganda has com- cost less than UGX 5 000 to fall within this affordability
mitted the country to developing a digital vision for measure. The RIA African Mobile Pricing (RAMP) Index
Uganda. It aims to build a digitally-enabled society that indicates that in Uganda in 2018 it would cost UGX 10 000;
is “… secure, sustainable, innovative, transformative … far above the means of a country with a GNI per capita
to create a positive social and economic impact through of only USD 1 820, a per capita income level which the
technology-based empowerment”. majority of the population live below. The 2018 RIA After
The Digital Uganda Vision provides an overarching Access Survey confirms that affordability of devices and
framework that responds to the national Vision 2040 by services is the main constraint on uptake and use.
providing a unified ICT policy direction. It further pro-
vides the Government’s integrated policy and strategic SOCIAL NETWORK TAXES
framework to show how information and communica- A number of contradictory policy and fiscal interven-
tion technologies (ICT) can empower Ugandan citizens tions have compounded this problem undermining
and achieve the goals of universal inclusion, sustainable efforts to realise the Digital Uganda Vision. In 2018, the
development, economic progress and poverty eradica- Ugandan Government introduced retrogressive social
tion through digital innovation. media and mobile money taxes. Mobile money users are
charged 0.5 percent on the value of withdrawal trans-
POOR INTERNET PENETRATION actions, in addition to excise tax levied on withdrawal
The Vision aspires to deliver a variety of government and fees. The social media tax of UGX 200 (USD 0.05) per day
private services electronically in various fields – educa- was introduced on the use of 60 mobile apps, including
tion, health, agriculture, social security, banking, justice Facebook, Instagram, Twitter and WhatsApp. The 2018
and communication. The current draft of the Vision is con- After Access Surveys and data demonstrate that social
strained however by the fact that Uganda has one of the media sites are the main drivers of Internet uptake
lowest (14%) Internet penetration rates of the 10 African in Uganda and across the continent. They are also a
countries surveyed by Research ICT Africa (RIA) as part of significant substitute for costly voice and text services
the Global South After Access Survey conducted between – a central strategy for citizens trying to make commu-
2017 and 2018. Only Mozambique (10%) and Rwanda nications more affordable. The social media tax has
(9%) have lower penetration rates. The other countries impacted negatively on social networking use, which
in the Survey – Ghana, Kenya, Lesotho, Nigeria, Senegal, has impacted negatively on mobile operator revenues
South Africa, and even Tanzania, another least developed at a time when they are making the hard transition
country – have higher Internet penetration rates. Internet from voice to data services. The impact on this is not
penetration is not the only area in which Uganda lags. only that the poor take the brunt of the tax (instead of
Less than half of the population own a mobile phone, the global platforms that are not impacted at all), but
whereas this market is close to mobile phone saturation the Government does not actually generate the antici-
in countries such as South Africa (83%) and Kenya (87%). pated revenue from the social networking and mobile
Although data prices in Uganda appear competitive money taxes as people curtail their use or find ways to
and relatively low compared to other African countries, circumvent the taxes through virtual private networks.
data use remains constrained, even for those who have Moreover, it has a negative effect on productive taxes
managed to overcome the price barrier of an Internet- and operator profits that subsequently decrease as a
enabled device. With the Broadband Commission’s result of reduced data usage.
EXECUTIVE SUMMARY iiiThese kinds of effects impact negatively on the Digital per capita of USD 5 311 and USD 6 026 respectively.
Uganda Vision in terms of digital and financial inclusion. Uganda has a huge urban–rural gap in Internet use of
The taxes are likely to reduce Internet penetration, but 70 percent, where only nine percent of Ugandans living
also the intensity of use, which is built into models in rural areas have access to the Internet and about a
that indicate that a critical mass of at least 20 percent third (30%) of urban area dwellers using it. Only two
is required for a country to enjoy the network effects countries – Rwanda (77%) and Mozambique (87%) –
associated with economic growth and development. have greater urban-rural Internet access gaps. South
Early evidence released by the Uganda Communications Africa has the lowest Internet urban–rural gap among
Commission (UCC) on Twitter, national revenue services African countries surveyed, at 36 percent, higher than
reports, and operator revenue reports, indicates there Argentina (-6%), Colombia (23%), Nepal (22%), as well as
was a significant drop in both data use and operator Guatemala and Pakistan 13 percent. The gender gap in
revenues between when the tax was introduced and Uganda’s Internet use is moderate, at 25 percent, larger
November 2018 (when operators published their than the gender gap in Argentina (1%), Colombia (-6%),
revenue reports). South Africa (12%), Lesotho (14%) and Senegal (21%).
Both taxes come on top of already high excise duties
(12%) and VAT charges (18%) that constitute about 30 INHIBITORS OF INTERNET USE
percent of retail prices, and which have already con- The lack of electricity and underdeveloped ICT infra-
strained uptake and use. Additionally, operator prices structure are the primary causes of huge discrepancies
also reflect a universal service levy of 2 percent over and in urban–rural Internet use and mobile phone penetra-
above relatively high company taxes. tion rates in Uganda. Only 18 percent of households in
Uganda have an electricity connection, with an urban–
DIGITAL GAPS rural electricity gap of 85 percent. Half of those who do
The 2018 After Access Survey shows that Internet not use the Internet (86% of the total population) have
use, mobile phone penetration, and the Internet use no Internet-enabled devices such as computers and
divisions between genders as well as urban and rural smartphones. Uganda has the second-lowest smart-
dwellers are correlated with GNI per capita. Uganda is phone device ownership in the countries surveyed at 16
classified as one of the least developed countries – a list percent of the total number of mobile phone users, with
of developing countries that, according to the United only Rwanda’s nine percent performing worse. Other
Nations, possess the lowest indicators of socioeconomic than poor supply-side factors, human development
development and the lowest Human Development Index factors are also a cause of concern in Uganda. Just over
ratings among all countries in the world. With a GNI per one-third (36%) of non-Internet users are digitally illiter-
capita of USD 1 820, it is comparable to Rwanda (USD 1 ate, 23 percent stating that they do not know how to use
811) and Mozambique (USD 1 093). Among the surveyed the Internet and 13 percent gave a negative assessment
African countries, Uganda is the third least-connected about their need of the Internet.
country after Rwanda and Mozambique. Yet, it has
higher Internet use than other countries with high GNI MARKET STRUCTURE AND COMPETITION
per capita compared in the Global South After Access While the Ugandan market is regarded as one of the
Survey. In Bangladesh, a country with a GNI per capita most dynamic markets in Africa in terms of the number
almost double that of Uganda’s (USD 3 677,) but a popu- of operators, it remains highly concentrated, rendering
lation three times the size, only 13 percent of the popu- competition suboptimal. Airtel and MTN together
lation have internet access; Uganda’s Internet is also not control about 82 percent of the Ugandan market,
far behind other populous nations Pakistan (17%) and with the former’s share standing at 45 percent and
India (19%), despite these countries having a high GNI the latter controlling about 37 percent of total mobile
EXECUTIVE SUMMARY ivsubscriptions1. Uganda Telecom, which provides both Union’s IDI; 121 out of 139 countries in the Network
fixed and mobile services but has only eight percent Readiness Index; and 64 out of 75 countries in the latest
mobile market share and Africell has only five percent. Economist Intelligence Unit (EIU) Inclusive Internet
The failure of the regulator to deal with the dominance Index (3i), is the poor information infrastructure and low
of MTN and Airtel, despite market reviews indicating levels of Internet penetration in the country. Although
market dominance, has resulted in some operators over half the population has access to mobile services,
remaining marginal and others being forced to exit the only a sixth has access to the Internet. With very low
market. Vodacom and K2 exited during 2018 for different intensity of use, the country cannot enjoy the network
reasons, having failed to make significant inroads into effects associated with increased information flows and
the market. productivity gains that are reflected in economic growth
While voice services remain a significant segment of and in opportunities for social upliftment. With most
the market in Uganda, yet smartphone and Internet indices now accounting for the importance of human
penetration remain relatively low. The more marginal development in harnessing the Internet for national
operators, such as Uganda Telecom and Africell, use development, large human capital deficits contribute
a low-data price strategy to attract customers to their to the negative score for Uganda on the E-Government
networks. As such, the players in the mobile data market Development Index, which places Uganda at 128 out of
in Uganda face intense pricing pressure with operators 193 countries.
undercutting each other as they shift their business With only 60 of 121 districts in the country connected
models to data revenues. Yet, despite the low data by early 2018, and 3G coverage of only half of the
prices in the data market, subscribers who can afford population, clearly the liberalisation of the market on
to, choose to pay a premium for quality which is more its own has not delivered on national policy objectives
of a factor in data services that it was with voice. This of ubiquitous broadband. It is arguable to what degree
has made it difficult for smaller operators to compete this is a result of an absence of incentive regulation to
with larger operators and gain market share. The larger drive network extension, or competition regulation that
players are profitable enough to reinvest in their net- enables service providers cost-based access to domi-
works and to extend their coverage and improve quality nant operator’s facilities and networks. But managing
of service, which in turn allows them to attract more the tension between providing incentives for operators
customers seeking a higher quality of service. to invest, such as forbearance on regulation, particularly
The price wars have led to Uganda sitting in the top 20 in greenfield network roll out, while ensuring network
out of 49 African countries on the 1GB RIA African Mobile access for market entrants to enhance competition, pro-
Pricing Index. Without the latest social media tax, vides an example of the complexity of challenges facing
Uganda would be ranked in the top 10. Being amongst regulators in low-income countries where network
the least developed countries, with a very low GDP extension still needs to be promoted.
per capita, the affordability of services, even at these Nevertheless, perceived market failure stimulated the
relatively low prices, is a major inhibitor of optimal use decision by the Government of Uganda to fund a state-
of the Internet. owned and -operated national broadband infrastructure
initiative in 2007, with a USD 160 million loan from the
UGANDA’S PERFORMANCE Chinese Government.
ON GLOBAL INDICES The entry of the National Backbone Infrastructure
Uganda scores poorly on different global ICT indices. (NBI) into the market has enjoyed mixed success. In
The primary reason for being ranked 152 out of 176 the context of expanding privately-owned broadband
countries in the International Telecommunications networks into underserviced areas, the entry of the NBI
1 GSMA Intelligence (2018). Data available upon request.
EXECUTIVE SUMMARY vcertainly drove down prices, from around USD 2 000 to the Ministry to develop appropriate policy and regula-
less than USD 200 in what was previously an extremely tory frameworks and a platform for operators to share
concentrated fibre market with very limited coverage. broadband infrastructure plans, while the regulator is
The connection of over 60 public offices, primarily in expected to issue guidelines to avert duplication and
Kampala and Entebbe, but also further afield, has led to enforce the new policy. Operators with national licences
a saving for the state of over UGX 9 billion annually (NBI, are now required to offer communication services across
2017). Extending the reach into unserved areas has been the whole country without discrimination and not to
much less successful, as commercial operators have also build new infrastructure where it already exists.
followed the same stronger economic routes identified
or stimulated by the NBI. As a result, large sections of KEY RECOMMENDATIONS
the country were not reached in the first three phases of It is evident that Uganda will need to do some things
the project. differently to ensure improved outcomes.
Like many state-owned national broadband Addressing inconsistencies in policy that affect the
backbones, the NBI has also been undercapitalised sector is critical. Each policy that impacts the sector,
until recently when the World Bank-funded Regional regardless of the Ministry that develops it, should be
Communications Infrastructure Programme (RCIP) came evaluated before implementation within the overall
in to support broadband enhancement and expansion. context of the Digital Uganda Vision so that adverse
There remain many unconnected areas in the country, effects can be mitigated.
especially in the underserviced northern areas of the Supply-side interventions on their own are insuf-
country. Rollout to some of these areas is planned for ficient. Demand stimulation is essential to driving
the fourth phase of the NBI rollout. Internet uptake. Affordability of devices is the primary
Getting all the district capitals connected will be crit- challenge for policymakers, with even relatively low-
ical, not only to the successful integration of the public cost devices being beyond the financial means of large
sector to more efficiently deliver public services, for the numbers of citizens. Further, the price of data, even
broader Digital Uganda Vision project’s success. It will though relatively low, is simply beyond the means
also create opportunities for nascent access networks of many people for meaningful use. Shifting people
and Internet service providers in those regions, stimulat- from passive consumption of services to productive
ing greater economic activity. use represents a far greater challenge, however. This
requires not only improving digital literacy in order to
COVERAGE AND REACH bring people online, but developing wider skillsets for
Broadband coverage in Uganda is minimal, even the production of local content to stimulate demand,
compared to many other least developed African improving entrepreneurial application to create
countries, with 65 percent of the population covered jobs and increasing the consumptive capacity of the
by 3G and only 17 percent covered by LTE/4G. Although economy more broadly to drive growth.
Section 5(1)(y) of the Uganda Communications Act Uganda has the lowest percentage of people who have
(2013) encourages infrastructure sharing, this has not bank accounts among all the surveyed countries, at two
been embraced with the exception of network towers. percent, so the country benefits from mobile money.
This is reflected in the in high costs of rolling out and While these services allow large numbers of people to be
maintaining infrastructure, the underutilisation of financially included, the Government’s decision to intro-
capacity and high Internet prices. However, the Ministry duce a mobile money tax has undermined the impact
of ICT and National Guidance has recently developed of mobile money on financial inclusion in Uganda. The
a national broadband policy where cross-sector ICT tax has not only led to a decline in the amount of value
infrastructure sharing among operators is a guiding transacted (between 50% and 60%) but it seems also
principle and major policy objective. The policy, which not to have met the intended fiscal objectives of the
aims to eliminate infrastructure duplication, calls on Government either. This needs to be re-evaluated.
EXECUTIVE SUMMARY viAs the country deliberates on the capitalisation of the It is clear that even if they were effectively regulated,
fourth phase of the national backbone, it should evaluate current national licensing and GSM business models
alternative, cost-effective strategies to reach unserved are not affordable for the majority of Ugandans. A
areas. Consideration should be given to transferring the regulatory transactional cost regime that enables
risk associated with long-term debt arrangements from lower-cost dynamic or secondary spectrum use in rural
the public to the private sector. Cross-continental and areas, where it is underutilised by national licens-
local commercial fibre companies could provide more ees and self-provisioned by community networks,
competitive prices than incumbents. This competitive micro-cells and wireless internet providers, needs to
fibre rollout is happening elsewhere on the continent be investigated to make the Digital Uganda Vision a
through fibre companies raising their own capital to open reality. Extensive free public Wi-Fi should be deployed
up new routes. The business model is inherently open through the RCDF at all public buildings to improve
access as fibre companies require as much traffic on their digital equality amongst citizens and enable those who
networks as possible to get a return on their investments have acquired smart devices to utilise Internet-based
as quickly as they can in order to capitalise further services more affordably.
network extension to enhance the size and value of thier
networks.
EXECUTIVE SUMMARY viiCONTENTS EXECUTIVE SUMMARY III Digital gaps iv Inhibitors of Internet use iv Market structure and competition iv Uganda’s performance on global indices v Coverage and reach vi Key recommendations vi LIST OF ABBREVIATIONS X STATUS OF THE ICT SECTOR 1 1.1 Overview 1 1.2 Vision 2040 1 1.3 National Development Plans 2 1.4 Policy and legal environment 3 1.5 Institutional arrangements 3 1.6 Sector challenges 6 DIGITAL DIVIDE IN UGANDA AND THE GLOBAL SOUTH 8 2.1 Inhibitors of Internet Use 11 2.2 Regressive policies increasing digital gap 11 2.3 Financial inclusion and mobile money 14 INFRASTRUCTURE COVERAGE AND REACH 16 UGANDA TELECOMMUNICATIONS MARKET STRUCTURE 18 4.1 Competition 19 4.2 Performance in RAMP Index and affordability of services 22 4.3 Perceived freedom of online expression 24 CONCLUSION AND RECOMMENDATIONS 25
LIST OF TABLES Table 1: Countries that participated in the multi-partner survey 1 Table 2: Access to electricity in surveyed African countries 9 Table 3: Population coverage for 2G, 3G and 4G across Uganda 16 Table 4: Number of different types of licensees in Uganda 18 Table 5: Proposed glide path in MTR 20 Table 6: Comparison of Internet use across different income groups 23 LIST OF FIGURES Figure 1: Functional levels of the ICT sector in Uganda 4 Figure 2: Mobile phone and Internet penetration against GNI per capita 8 Figure 3: Urban–rural disparity in Internet use in the Global South countries surveyed 9 Figure 4: Rate of Urbanisation among survey countries 10 Figure 5: Gender disparity in Internet use in Africa and the Global South 10 Figure 6: Reason for not using the Internet in Uganda 11 Figure 7: Mobile phone users with smartphone devices 12 Figure 8: Social media use among Internet users 12 Figure 9: Quarterly taxes from the telecommunications sector 13 Figure 10: Bank account ownership in surveyed countries 14 Figure 11: Mobile money and financial inclusion 15 Figure 12: Map showing fibre coverage of the NBI 17 Figure 13: Market shares of mobile operators in Uganda 19 Figure 14: Cheapest 1GB data in Uganda by operators 21 Figure 15: Ugandan mobile telecommunication HHI 22 Figure 16: The cost of 1GB of data among 20 African countries 23 Figure 17: Not comfortable discussing issues online 24
LIST OF ABBREVIATIONS
3G Third Generation MoICTNG Ministry of ICT and National Guidance
3i Inclusive Internet Index MTR Mobile termination rate
4G Fourth Generation NBI National Backbone Infrastructure
BPO Business Process Outsourcing NBS National Broadband Strategy
BTS Base Transceiver Station NDP National Development Plan
DIRSI Diálogo Regional sobre Sociedad de la NITA-U National Information and Technology
Información Authority-Uganda
DUV Digital Uganda Vision NRI Network Readiness Index
E-GIF E-Government Interoperability Framework OECD Organisation for Economic Co-operation and
Development
EIU Economist Intelligence Unit
OTT Over-the-top
FTA Free To Air
RAMP RIA African Mobile Pricing
GEA Government Enterprise Architecture
RCDF Rural Communications Development Fund
GDP Gross Domestic Product
RIA Research ICT Africa
GNI Gross National Income
SDG Sustainable Development Goal
GSM Global System for Mobile Communications
SIM Subscriber Identity Module or Subscriber
GSMA GSM Association
Identification Module
HHI Herfindahl-Hirschman Index
UCC Uganda Communications Commission
ICT Information and Communication
UGX Uganda Shillings
Technologies
UICT Uganda Institute of Information and
IDI ICT Development Index
Communications Technology
IT Information Technology
UNCDF United Nations Capital Development Fund
ITU International Telecommunications Union
USD United States Dollars
LG Local Government
UTL Uganda Telecom Limited
LTE Long Term Evolution
VAT Value Added Tax
MDAs Ministries, Departments and Agencies
WEF World Economic Forum
MDG Millennium Development Goal
MoES Ministry of Education and Sports
x1
STATUS OF THE ICT SECTOR
1.1 OVERVIEW indices are able, to varying degrees, to track prices,
The Global South is undergoing rapid social and eco- cost drivers and how conducive the environment is to
nomic changes as a result of the confluence of mobile investment in order to identify ICT sector performance
and Internet technologies, with the potential to con- at country level. They are however generally not able
tribute to employment and economic growth. Though to establish the cause of any identified problems, other
broadband impact studies vary on the exact contribu- than in the broadest terms.
tion that increases in broadband penetration make to To identify country-unique challenges with the aim
economic growth, there is enough evidence that once it of providing evidence-based policies for specific coun-
reaches a critical mass of about 20 percent, it correlates tries, in 2017–2018 Research ICT Africa (RIA) conducted
with increases in Gross Domestic Product, job creation, nationally representative surveys in Uganda and nine
the broadening of educational opportunities, enhanc- other African countries during 2017 - 2018, as part of
ing public service delivery and rural development.2 In the 22 country surveys conducted with partners Diálogo
recognising the importance of information and commu- Regional sobre Sociedad de la Información (DIRSI) in
nication technologies (ICTs) as a catalyst for economic Latin America and LIRNEasia in South East Asia. This
growth and essential for achieving the sustainable report is specific to Uganda, but it brings in compara-
development goals (SDGs), a number of countries, tives from the other countries surveyed as summarised
especially developing ones, have developed initiatives in Table 1.
and policies aimed at improving connectivity.
The critical question always is: “To what extent are 1.2 VISION 2040
policies achieving the desired outcomes?” Several global The Uganda Government recognises ICTs as critical to
indices have been developed by various agencies includ- the delivery of its national Vision 2040.3 Digital Uganda
ing the International Telecoms Union (ITU), the World Vision (DUV) provides government’s integrated policy
Economic Forum (WEF), the World Bank, and others to and strategic framework of how ICT shall support
guide comparative and progressive assessment. These the delivery of the national Vision 2040 by striving to
Table 1: Countries that participated in the multi-partner survey
RESEARCH ICT AFRICA (AFRICA) DIRSI (LATIN AMERICA) LIRNEASIA (SOUTH EAST ASIA)
Ghana Argentina Bangladesh
Kenya Colombia Cambodia
Lesotho Guatemala India
Mozambique Peru Myanmar
Nigeria Paraguay Sri Lanka
Rwanda Pakistan
Senegal
South Africa
Tanzania
Uganda
2 Roller, L.H. & Waverman, L. (2001). “Telecommunications infrastructure and economic development: A simultaneous approach”.
American Economic Review, 91 (4): 909-923.
3 Uganda Vision 2040, https://www.gou.go.ug/content/uganda-vision-2040
Status of the ICT Sector 1empower citizens and achieving the goals of universal Specifically, through the harnessing of knowledge and
inclusion, sustainable development, economic progress ICT, the Government commits itself to develop, improve
and poverty eradication through digital innovation. The and retool its ICT talent-building mechanism by adopt-
DUV aims to use ICTs to deliver various government and ing globally benchmarked, industry-rated skills assess-
private services, including but not limited to education, ment as well as training and certification standards.
health, agriculture, social security, banking, justice and Furthermore, the Government intends to: ensure
communications.4 effective interoperability of processes and/or systems
ICT and ICT-enabled services have been identified by the across government, the private sector, civil society,
Government of Uganda as being crucial to transforming other governments and development partners; promote
its economy and people’s lives through job creation, the development of a hi-tech industry; review all legal
accelerated economic growth and increased productiv- and regulatory frameworks in the ICT sector to allow for
ity. Vision 2040 clearly stipulates that there is potential efficient operationalisation, enforcement and improve-
to improve the availability of digital content and e-prod- ment of cyber laws; and enhance information security.
ucts; to provide automated government processes and Under the ongoing implementation of NDP II, four
inter-agency connectivity; to bridge the gap between key ICT sector objectives were identified: improve the
industry and academia; and to enhance the commercial- legal and regulatory frameworks to respond to industry
isation of research and development. needs; enhance ICT expertise; promote an informed and
In a bid to improve ICT skills, digital literacy and aware citizenry for socio-economic transformation; and
knowledge, the Government has committed to develop, enhance the secure use and application of ICT services
improve and retool its ICT knowledge base; build in business and service delivery.
robust ultra-high-speed, pervasive, and intelligent ICT The identified challenges facing the sector include low
infrastructure all over the country, in line with changing levels of digital literacy and general apprehension with
technologies; foster and support business process respect to ICTs; inadequate complementary infrastruc-
outsourcing (BPO) business activities; and encourage ture for effective roll out. of ICT facilities; vandalism
innovation to harness the full potential of the digital of ICT infrastructure; onerous taxation regimes for the
economy and technological innovation. sector; and fragmented ICT initiatives across govern-
ment due to disparate mandates. While there is still
1.3 NATIONAL DEVELOPMENT PLANNING tension and unplanned overlap between some National
Vision 2040 identifies ICT access and utilisation not Information and Technology Authority-Uganda (NITA-U)
just as a crosscutting development enabler but also as and Uganda Communication Commission (UCC) initia-
a major business opportunity; and provides the foun- tives, efforts by the NITA-U to rationalise government ICT
dation for the development of the five-year National initiatives over the last four years have borne fruit.5
Development Plans (NDPs). Currently implementing her In addition, NDP II explicitly stipulates some ways to
second National Development Plan NDP II (2015/16– address the access and affordability gaps through
2019/20), Uganda aims to position itself as a regional implementing last-mile connectivity countrywide and
power in Africa by improving the legal and regulatory promoting production as well as the use of low-cost
frameworks to respond to industry needs; enhancing ICT locally assembled devices in collaboration with the
expertise; promoting an informed and aware citizenry private sector.
for socio-economic transformation; and enhancing the The plan correctly identifies the broad challenges
secure use and application of ICT services in business facing the country that need to be addressed to harness
and service delivery. the opportunities arising from the development of the
4 Digital Uganda Vision, https://ict.go.ug/initiatives/digital-vision/
5 See NITA-U’s rationalisation and harmonisation strategy at https://www.nita.go.ug/sites/default/files/publications/
Rationalisation%20and%20Harmonisation%20of%20IT%20Initiavitives%20Services%20in%20MDAs.compressed.pdf
Status of the ICT Sector 2sector. However, the role identified for ICTs in the plan directs regulators to review licensing regime to ensure
needs to be clearly linked to policies, and particularly that licensees adhere to ICT sector strategic objectives.
strategies for implementation, to realise these objec- With only 60 of 121 districts in the country connected
tives on the ground. by early 2018, and 3G coverage over only half of the
As a blueprint for the country, the implementation population, clearly the liberalisation of the market on its
of the Digital Uganda Vision would move Uganda a own has not delivered on national policy objectives of
considerable way towards meeting the Sustainable ubiquitous broadband.
Development Goals (SDGs), but a considerable gap The ICT-SIP (2015/16-2019/20) is a five-year plan to
still exists between this enabling role that ICT can play guide the development of the ICT sector in line with
in a modernising economy and public sector, and the Vision 2040 and NDP II. The ICT-SIP covers the key pillars
conditions that exist on the ground. The sections that of infrastructure, human capacity, cyber-security, e-gov-
follow identify the existing policy and legal instruments ernment, local content, and services. It aims to increase
available for the implementation of Vision 2040 and ICT access and broadband speeds to 4Mbps and 30Mbps
the Digital Uganda Vision, and propose the review, for rural and urban households, respectively.
consolidation and reformulation of policies, laws and The National Broadband Strategy (NBS) details
regulations to meet the challenges arising from the gap Uganda’s path to socio-economic transformation on
analysis. the back of affordable high-quality broadband internet.
Both the ICT-SIP and NBS identify universal access to
1.4 POLICY AND LEGAL ENVIRONMENT broadband as critical, with the NBS defining universal
The National ICT Policy (2014) is aimed at supporting service as “access to ICTs within a radius of approx-
realisation of Vision 2040 with broad objectives that imately 5km per household.” The NBS also provides
include building a knowledge-based human capital, targets for 2020: broadband penetration of 50 percent
promoting innovation in economic and social systems, and 100 percent for rural and urban areas, respectively;
expanding ICT infrastructure and its integration, 100 percent of district and sub-county headquarters,
improving utilisation of ICT services, enhancing research health centres and secondary schools to have broad-
and innovation in ICT and improving ICT governance band connectivity; 50 percent of primary schools
in Uganda. While the policy was formulated based on with broadband connectivity; the cost per Mbps of
the Millennium Development Goals (MDGs) as opposed broadband in relation to average income reduced to 10
to the SDs that are the focus in NDP II, the policy does percent; and 40 percent of the population being digitally
provide sufficient context and guidance for derived literate.
documents like the ICT Sector Strategy and Investment In addition to the policies and strategies outlined
Plan (ICT-SIP), the National Broadband Policy, and the above, other ICT policies and strategies in place and
National Broadband Strategy (NBS).6 operational include the e-Governance Framework
The National Broadband Policy (2018) also builds on Policy, the National Information Security Framework,
the objectives of Vision 2040 and NDP II by highlight- spectrum policy, e-Waste Management Policy and IPv6
ing the role of broadband internet as an enabler for Transition Policy.
socio-economic development and calling for broadband
infrastructure to be planned for like other public infra- 1.5 INSTITUTIONAL ARRANGEMENTS
structure (for example roads, railways, or power lines). The ICT sector is organised in three functional levels
It emphasises ICT infrastructure sharing among licensed as highlighted in Figure 1. At the top or policy level,
providers, universal access to broadband internet across the Ministry of ICT and National Guidance (MoICTNG)
the country including rural and hard-to-reach areas and oversees the sector and provides the necessary policy
6 The National Broadband Strategy defines broadband as follows: “For the duration of this strategy (2016–2020), broadband for
Uganda means a robust connectivity that is affordable, always on and delivers a minimum of 3Mbps to the user for applications,
content and services.” RCDF Operational Guidelines 2017/18–2021/22 (RCDF III) p.11.
Status of the ICT Sector 3MoICTNG Parliament
Policy level (ICT Committee)
Regulatory level UCC and NITA-U
Service level LGs, MDAs,
Licensed Providers
Figure 1: Functional levels of the ICT sector in Uganda
framework to guide implementation. In the middle or responsibility. UCC initially addressed this by placing
regulatory level, the Ministry is supported by regulatory RCDF implementation under a different and operation-
agencies that include the Uganda Communications ally independent board, but the lines have blurred over
Commission (UCC) – regulating the telecommunica- the years until RCDF falls directly under the regulatory
tions sector and also responsible for management and arm. NITA-U also has its regulatory and operational
implementation related to the Rural Communications functions under the same operational authority.
Development Fund; and the National Information Added to these structural challenges has been the
Technology Authority Uganda (NITA-U) – regulating the IT historical lack of coordination among MDAs, with most
sector and also responsible for roll-out and operation of taking disparate ICT paths and projects. Government,
the National Backbone and e-Government Infrastructure. through NITA-U, has now taken some major steps in
At the bottom or service provision level are the public and addressing this through the rationalisation strategy, but
private players that provide services directly to citizens. a lot still needs to be done. The Digital Uganda Vision
Public sector players encompass Local Governments indeed The Vision identifies the lack of co-ordination by
(LGs) as well as Ministries, Departments and Agencies the state and between the various MDAs as a factor in
(MDAs) while private sector players are licensed and Uganda’s poor performance on global indices.
supervised by the regulatory bodies. All these challenges need to be addressed to enable
The Parliament of Uganda provides an oversight the cross-cutting role of ICT in a digital economy as
role and facilitates the policy process for the work of envisaged in the NDP II and the Digital Uganda Vision,
the Government in the ICT sector through its sectoral with its focus on innovation and human development.
Committee on Information, Communication Technology This next section highlights some of the primary
and National Guidance that oversees the Ministry. institutions directly responsible for regulation and
Some structural challenges are very evident. Despite implementation in the communications sector.
the reality of convergence, there is separation in regu-
latory functions related to IT and Telecommunications. 1.5.1 Uganda Communications Commission
In most countries, regulation has been placed in the Uganda Communications Commission (UCC)’s
hands of a converged regulator, and Uganda needs to mandate is to regulate communications, including
recognise this reality. To persist otherwise is to create telecommunications, broadcasting, the film indus-
grounds for continuing conflict between the two agen- try (the Stage Play and Public Entertainments Act,
cies responsible for regulating in a converged technol- theatres for public entertainment), and postal ser-
ogy and services environment, and maintain confusion vices in the country. In addition, UCC manages the
among operators and practitioners in the ICT sector. In Uganda Institute of Information and Communications
addition, regulators have also been given implementing Technology (UICT), the only government institutions
Status of the ICT Sector 4specialising in training ICT mid-level technicians. UCC path for mobile termination rates (MTRs), setting aside
also manages the Rural Communications Development spectrum for auction, and carrying out market reviews7 to
Fund (RCDF) established to cater for underserved determine any existing levels of dominance. Because of
and unserved areas of the country under the Uganda their centrality to creating a fair and competitive environ-
Communications Act 1997 and the successor Act, the ment, there is concern among stakeholders that many of
Uganda Communications Act 2013. these have not been implemented. Some believe this is
During the 1990s, Uganda was among the first African due to the regulator succumbing to commercial or polit-
countries to separate policy, regulation, and operation ical pressure or threats of legal review. Others attribute
of telecommunication networks and services by setting the increased political attention paid to the regulator
up an independent regulator (UCC) within the context to the incorporation of broadcasting into its mandate.
of the General Agreement on Tariffs and Trade’s (GATT) Whatever the reasons, there is a view that this has eroded
Basic Telecommunications Services that led the liber- the authority of the UCC over time and created uncer-
alisation of traditional monopoly telecommunications tainty in the sector for investors and consumers.8
sectors across the world. UCC pioneered the implemen- In a similar vein, the changes in direct funding of the
tation of regulatory reform on the continent, and was in UCC, from a levy on operator revenues to the funds
its early years internationally recognised as one of the in future going to a consolidated fund and the UCC
most well-established and effective regulators on the receiving a budget appropriation, are seen as potentially
continent. Uganda’s policy was particularly cognisant undermining the autonomy of the UCC. The consolida-
of the dearth of telecommunications services and set tion of state revenues in a single fund subject to treasury
universal service obligations as a key component of the controls is not uncommon and is often regarded as good
sector to achieve universal access. practice. Although it does not seem clear yet exactly
how budget allocations and distribution will occur,
INSTITUTIONAL MISALIGNMENT ways of safeguarding the regulator’s autonomy and
Some of the responsibilities of UCC are beyond the effectiveness should be considered. These could include
scope of economic regulation in the communications medium-term (three-year) budgeting and annual
sector, such as the responsibilities for film and theatre distributions of the budget with some parliamentary
intended for public entertainment that are not specif- oversight. This would provide the regulator with the
ically for electronic distribution. UCC was also handed certainty required for planning, and flexibility to shift
the former telecoms and postal training institute as part priorities in a fast-changing environment.
of the restructuring of the sector. Some years after it was
built up and well-established as the Uganda Institute REGRESSIVE TAXATION
of Information and Communication Technology, it was, Stakeholders also highlighted the lack of understand-
through a government directive based on consistency ing of the sector by decision-makers in parts of the
of mandate, handed to the Ministry responsible for edu- Government that impacted directly on the sector. They
cation. The Ministry was however to fund it sufficiently, noted the efforts by the UCC to bring down the cost
and it subsequently handed back to UCC. of services with appeals to the Government to reduce
As shown in the regulatory analysis below (see section taxes on airtime and mobile money services, which have
1.6), UCC has instituted several key interventions known been rejected by Treasury, despite the negative impact
to stimulate a more effective and competitive environ- on national digital transformation objectives and the
ment, with the associated benefits of positive coverage, affordability gap. However, despite their own operator
pricing and quality outcomes such as setting a glide data showing the negative impact of social networking
7 “First Draft – Competition Report for the UCC – Part 1”, https://www.ucc.co.ug/files/downloads/Extract%20from%20Report%20on%20
Competition%20and%20Dominance%202009.pdf; “UCC Market Definition and Market Power Assessment: Final Project Report”,
8 Stakeholder interviews. Kampala. February 2018.
Status of the ICT Sector 5taxes on the data revenues of mobile operators strug- effective and innovative ways of fulfilling its mandate of
gling to shift from a voice to a data environment, UCC facilitating affordable access to broadband.
has defended social networking taxation.9
1.5.3 National Information
1.5.2 Rural Communications Development Fund Technology Authority Uganda
UCC set up the RCDF during 2001 as provided for in the National Information Technology Authority Uganda
Uganda Communications Act, 1997. The Act has under- (NITA-U) is responsible for the integration and oper-
gone revision since then, but the Fund remains a key ation of Information Technology (IT) systems across
feature of the law. The Act clearly stipulates that the RCDF government, the harmonisation of IT standards within
is meant to establish and administer a fund for the devel- the public sector, and the rollout and operation of
opment of rural communications and ICT in the country. the National Backbone Infrastructure (NBI) across the
The RCDF was set up with the objective of ensuring country.
that through targeted interventions, all those in Uganda Currently, NITA-U is completing the design of a turnkey
that would otherwise not be reached through commer- national integrated enterprise system to modernise the
cial interventions could still exploit ICT infrastructure public sector, which includes a data warehouse and
and services for their own well-being and contribute to interfaces with key private sector institutions, includ-
national economic development. ing banks, through a dedicated cloud. NITA-U is also
The purpose of the RCDF as spelled out in the Mission working on key public infrastructure to facilitate secure
is: “To facilitate universal access to high level capacity e-transactions and support BPO or IT-enabled services,
broadband for all Ugandans through targeted interven- including incubation and training. NITA-U has initiated
tions addressing location, physical inability, gender and steps to develop a Government Enterprise Architecture
cost barriers.” (GEA) and E-Government Interoperability Framework
Another key RCDF role is to set aside a fund to be used (E-GIF) to facilitate coordination and delivery of inte-
to contribute to ICT initiatives developed and owned by grated services across government MDAs as identified in
other MDAs as well as non-governmental organisations the Digital Vision Uganda by ensuring better interopera-
and the private sector. The availability of the fund has bility and optimal use of ICT infrastructure.
already attracted a number of initiatives among disad- Some stakeholders believe that locating the opera-
vantaged groups. tional functions of the NBI in a regulatory and procure-
Currently, the RCDF is engaged in the provision of ment agency is misplaced and has produced a conflict
computers to schools and associated training in collabo- of interest for NITA-U, as both a national procurer of
ration with the Ministry of Education and Sports (MoES) services and a competing operator. From a market
and other key players. Although there are mixed reviews perspective, the best quality and price of services for the
on the success of this project, with questions around public sector should be achieved through a transparent,
sustainability, maintenance and teacher training, these competitive tender. However, NITA-U argues that its
are essentially issues which fall under the mandate of key objective is to enable e-government and ensure
the MoES and need to be addressed in the context of the that there is infrastructure to do so to the lowest level
national education system.10 of local government at a sustainable cost. It believes
The best use of the RCDF needs to be reviewed in the that leasing, outsourcing or owning are all decisions led
light of the fast-changing data environment and the by cost-effectiveness. NITA-U contends that there is no
demand-side challenges facing Uganda. The utility of conflict of interest, as all MDAs are required to use the
the Fund needs to be assessed against the relatively NBI wherever it is available. This in itself may be prob-
high universal service obligations that exist for licens- lematic in a competitive sector, where the government is
ees, the benefits derived from its existence and more one of the largest clients.
9 John Ivan Kisekka, “Do We Need the Social Media Tax? UCC ED Godfrey Mutabazi Explains”, 20 July 2018, https://www.techjaja.
com/do-we-need-the-social-media-tax-ucc-ed-godfrey-mutabazi-explains/
10 Stakeholder interviews. March 2018.
Status of the ICT Sector 61.6 SECTOR CHALLENGES innovation more widely. If successfully implemented,
The UCC, which has historically enjoyed a high degree this will provide a key pillar in the Digital Uganda Vision.
of autonomy, has failed to implement some critical Despite the country’s policy of using ICTs to enhance
regulatory interventions that would have improved its social and economic performance, there is consensus
competition in the market and increased uptake of in the global ICT indices that Uganda is not making
digital technologies. Over the years, UCC has come sufficient progress towards the objectives in the NDP
under increasing commercial and government pressure, II and those proposed in the Digital Uganda Vision.
especially after the broadcasting sector fell under its Uganda’s position has been undermined by lack of
ambit. Examples include : co-ordination across government and the actions of one
• UCC’s failure to act on findings of dominance arm of government pursuing its objectives without con-
arising from critical market reviews; sidering the negative impact on another arm. Although
• implementation of Mobile Termination Rate (MTR) the various global indices are highly problematic for
glide paths following costing studies; and different reasons, they are indicative of Uganda’s least
• assignment of high-demand spectrum and delays developed country status and its relatively poor perfor-
to digital migration. mance, which has been highlighted by the Government
These are all symptoms of institutional arrest that have of Uganda in preparing for the Digital Uganda Vision.
created growing uncertainty in the sector, since the Uganda is ranked 152 out of 176 countries in the
comprehensive liberalisation of the market in 2005. International Telecommunication Union (ITU)’s ICT
The opportunities offered to citizens, small, medium Development Index (IDI).11 In the Network Readiness
and micro enterprises and the public sector by new Index (NRI), Uganda is ranked 121 out of 139 countries,12
technologies and platforms also present some dangers. and 64 out of 75 countries by the Economist Intelligence
Although these digital platforms and services operate Unit (EIU) in the Inclusive Internet Index (3i).13
across borders and are governed to some degree by The findings of the “After Access” nationally represen-
global governance technical standards, and increasingly tative survey in the next section provide some demand-
also legal conventions, they need to be implemented at side insights and an accurate picture of ICT access and
a national level to have effect. A clear digital governance use in Uganda, and the factors contributing to the poor
framework to deal with issues of cyber-security, privacy performance in the bench marking that follows.
and data protection is needed to create a trusted This provides policy makers with precise points
environment to bring citizens safely online. The Ministry of policy intervention to address content specific
of ICT and National Guidance has formulated some leg- problems, rather than relying on incomplete and
islation and regulations with the support of NITA-U and patchy supply-side data and generalised best practice
UCC to address some of these gaps like the Computer solutions.
Misuse Act 2011, the Data Protection and Privacy Bill
(published), the Electronic Signatures Act 2011, the
Electronic Signatures Regulations 2013, the Electronic
Transactions Act 2011 and the Electronic Transactions
Regulations 2013.
The benefits of improved data flows and information
sharing should be leveraged through an open data
framework for the public and private sectors, with the
potential of creating jobs, applications and local content
11 ITU’s Measuring the Information Society 2017, http://www.itu.int/net4/itu-d/idi/2017/index.html
12 World Economic Forum’s NRI http://reports.weforum.org/global-information-technology-report-2016/
13 Economist Intelligence Unit’s Inclusive Internet Index, https://theinclusiveinternet.eiu.com/
Status of the ICT Sector 72 DIGITAL DIVIDE IN UGANDA AND
THE GLOBAL SOUTH
Evidence from the nationally representative surveys Uganda is the third poorest surveyed country in Africa,
conducted across 20 countries (including Uganda) in with a GNI per capita at USD 1 820, with only Rwanda
2017-2018 shows that mobile phone penetration and (USD 1 811) and Mozambique (USD 1 093) being lower.
Internet use systematically correlate with Gross National These three are among the countries with the lowest
Income (GNI) per capita. South Africa is the only African mobile phone penetration and Internet use rates. While
country in the survey with a similar GNI per capita to the it is broadly true that Internet use and mobile phone
wealthier Latin American countries, at USD 11 923. With penetration are broadly aligned with a country’s eco-
a mobile penetration rate of 83 percent, South Africa nomic status, there is evidence that among the cluster
compares relatively well to Argentina (91%), Paraguay of poor countries, other factors are more important
(89%) and Guatemala (88%), which lead in terms of than economic status. Despite Tanzania (USD 2 557)
mobile phone penetration. However, despite having being marginally better off than Uganda, both countries
amongst the highest GNI per capita of all countries have similar Internet use rates, at 14 percent. However,
surveyed, below Argentina (USD 18 461) and Colombia Tanzania has a significantly higher mobile phone pene-
(USD 12 938), only about half (53%) of the South African tration rate, at 61 percent, as compared to 49 percent in
population use the Internet as compared to about eight Uganda. Rwanda (9%) and Mozambique (10%) have the
in ten in Argentina, seven in ten in Colombia and Peru, lowest Internet use. Mozambique has the lowest mobile
and six in ten in Guatemala and Paraguay. phone penetration rate, at 40 percent (see Figure 3).
20 000 100%
91 89
86 88 87
83 84 84 85
79 78
75 74 74
15 000 73 73 72 75%
68
65
63 63 61
61 61
57
GNI per capita value
53
49
10 000 46
48 50%
40
36
32 31
29 30
28 27
5 000 25%
19 17
14 14
13
9 10
0 0%
Argentina
Colombia
South Africa
Peru
Ecuador
Paraguay
Guatemala
India
Nigeria
Pakistan
Ghana
Myanmar
Bangladesh
Lesotho
Cambodia
Kenya
Senegal
Tanzania
Nepal
Uganda
Rwanda
Mozambique
After Access Survey countries
Mobile phone ownership (%) Internet use (%) GNI per capita, PPP (constant 2011 international USD)
Figure 2: Mobile phone and Internet penetration against GNI per capita
Source: RIA After Access Survey data, 2017/2018–2018
Note: Data for Myanmar and Sri Lanka could only be collated after this comparison was done, and could not be included here.
The Lesotho survey was done in 2016.
GNI per capita reflects 2017 data.
Digital divide in Uganda and the Global South 8Table 2: Access to electricity in surveyed African countries
NO ELECTRICITY % MAIN ELECTRICITY GRID % GENERATOR % SOLAR % OTHER %
Ghana 14 85 1
Kenya 34 42 16 8
Lesotho 53 34 1 11100
91,9
90
80,8
77,9
80
70 66,4
Urban population (%)
61,6
60 56,1
51,1 50,3
50 47,2
40 36,7 36,6 36 34 33,8
28,2 27
30 23,8 23,4
20 17,2
10
0
a
bi
a
ru
a
ay
a
a
ria
l
an
h
ue
a
a
o
a
da
a
da
ga
in
ric
an
al
di
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es
m
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an
an
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ne
am
nt
za
In
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o
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ad
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bi
ki
ra
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Ug
Rw
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n
Se
Le
am
m
gl
Pa
h
at
C
Ta
Pa
ut
Ar
Ca
n
Gu
oz
Ba
So
M
After Access Survey countries
Figure 4: Rate of Urbanisation among survey countries
Source: CIA World Factbook with estimates from 2018
only lower than Rwanda (77%), Tanzania (84%) and urban towns while the rich are the large rural farmers,
Mozambique (87%). South Africa has the lowest Internet which explains why rural areas have better Internet use
use urban–rural gap among African countries, at 36 compared to urban areas. Figure 4 shows correlation
percent, but it is higher than Argentina at -6 percent between the degree of urbanisation and the urban-rural
( whose population is almost entirely urbanised) , gap. Higher populations in urban areas are much easier
Colombia (23%), Guatemala and Pakistan (13%) and for providers to serve compared to rural populations
Nepal (32%) (see Figure 2). that tend to be more dispersed.
The urban-rural gap in Internet use is partly explained Despite Uganda having a high Internet use gap among
by the higher rate of urbanisation in Latin America urban and rural residents, the gender gap is amongst the
and South East Asia as compared to Africa. In some lowest of the African countries surveyed, at 25 percent,
countries like Argentine, the poor tend to live in cities or with only Senegal (21%), Lesotho (14%) and South
100
75
62 62
57
50 46 45
43
Percentage
34 34 33 33 31
32
25
23 21
25
14 14 12 10
1 -1
0
-6
Bangladesh
Rwanda
India
Mozambique
Nigeria
Pakistan
Ghana
Cambodia
Nepal
Tanzania
Kenya
Uganda
Guatemala
Senegal
Peru
Lesotho
South Africa
Argentina
Paraguay
Colombia
Myanmar
Ecuador
After Access Survey countries
Male Female Gap
Figure 5: Gender disparity in Internet use in Africa and the Global South
Source: RIA After Access Survey data, 2017/2018
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