Uganda pushes for internet cuts to promote digital financial services

The Ugandan government is pushing for lower internet costs to promote the usage of digital financial services across the country in a bid to increase financial inclusion for vulnerable groups.

According to the Ministry of ICT and National Guidance, the country will, by the end of this year, reduce the cost of data it provides through the national backbone infrastructure fibre by more than half from $70 per Mbps per second to $30.

This, the ministry says, will support the growth in ICT innovations, digital financial services, communication, e-government services among others.

“We are talking about purely government internet. Once we cut down the cost at which government is selling to services providers, then they will automatically also reduce the cost that the end user will be paying and we think this will help in our efforts to digitise our economy,”

– Mr Chris Baryomunsi, the Minister for ICT and National Guidance, told The EastAfrican on Wednesday.

The government has completed a $75 million National Data Transmission Backbone Infrastructure and e-Government Infrastructure Project.

The project aims to connect all major towns in the country onto an Optical Fibre Cable-based network and to connect ministries and government departments to the e-Government Network.

Last Friday, while presiding over the launch of the 2022 FinTech Landscape Exhibition in Kampala, the Minister for State for ICT, Ms Joyce Ssebugwawo, said the government is committed to reducing the cost of internet to facilitate a growing number of fintechs in the country that are offering faster and cheaper financial services to the vulnerable communities, hence enhancing financial inclusion.

The FinTech Landscape Exhibition run by Hipipo is a culmination of this year’s 40 Days 40 FinTechs initiative that ran in the months of June and July and shone a spotlight on 47 financial technology players from Uganda, Kenya and Tanzania.

“Digital financial services have enabled creation of convenience of payments with customers benefiting from the cheaper options. We consider ICT as the backbone of the financial infrastructure of the country to make financial inclusion affordable and instant to the poor and vulnerable groups,” – Ms Ssebugwawo said.

She said that over the years, internet prices have gone down from Ush10,000 ($2.64) for 1GB in 2006 to Ush5,000 ($1.32) currently.

According to official data, Uganda has an internet penetration of 3.7 percent of its population and this low internet penetration is caused by its high cost, low numbers of smartphones and poor internet infrastructure across the country, especially in rural areas.

According to data by the Uganda Bureau of Statistics, the number of smartphones registered in the country has grown steadily from 4.57 million in the first quarter of 2018 to almost eight million by the fourth quarter of 2020.


Several digital financial services providers in the country are, however, worried that poor regulation of the sector is creating a gap for crooks to fleece money from the public which in turn kills the public’s trust in the platforms.

Mr Japhet Aritho, the managing director for Airtel mobile commerce, said that while there are controls on the systems and the processes that curtail cyber fraud for mobile money users, customers continue to be defrauded in other means like through phone calls.

According to Ms Ssebugwawo, the government is working to ensure that regulatory framework is in place to support digital financial services, stop money laundering and combat financing terrorism.


About Post Author

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.