Bye Bye Mobile Money

Twenty years ago, as a young graduate fresh on the job market, I had a job and each time my salary came, I would put aside some money to send to my parents in the village. Whilst I couldn’t visit the village monthly, I made an effort to do so every three months.

Each visit had the primary purpose of taking money to the old folks, after which other demands came up too. However, in hindsight, I realise that meeting them, talking and enjoying home grown food was a very big benefit that came with this quarterly pilgrimage. It usually took me close to 6 hours to make the trip to Butaleja as it involved taking a bus ride from Kampala to Mbale Town only to wait for over an hour seated in a taxi heading for Butaleja waiting for passengers.

Being a technologist, when we eventually embraced mobile technology and its subsequent innovations like Mobile Money, I was in awe. This time round, I didn’t have to make frequent trips to the village but also had an opportunity to send money at any time I felt like in a convenient manner.

Mobile Money (MM) has been fundamental towards my projects that I handle remotely especially in farming as it proved to be the most cost effective means on my part.

Come 2018, a proposal to increase taxes affecting the MM service is tabled in parliament. Without applying any basic reasoning, the Members of Parliament proceeded to approve it yet a few months earlier, they had been in support of the National Financial Inclusion Strategy (2017-2022) which stated thus; In 2015, only 16% of the population had a bank point of service within one kilometre of a home, whereas 54% of the population had a mobile money point of service within one kilometre.”

In 2015, there was one Mobile Money agent for every 185 adults while during the same period, only 3 bank branches existed for the same number of people.

The same strategy document underscored the fact that, Between 2009 and 2013 Uganda experienced a significant increase in financial inclusion and much of this was driven by the growth of mobile money from 500,000 registered users in 2009 to 7 million active users of mobile money in 2016. As of 2015, 31% of the adult population in Uganda had used mobile money in the past 90 days and was considered an “active” user. This places Uganda as one of the leading markets in the world in terms of mobile money usage.”

If on one hand you profess interest in increasing financial inclusion countrywide and them come up with prohibitive taxes on the other hand, it beats our understanding by far. Is it an attempt to throw the baby with the bath water?

Considering the significant increase in transaction costs that come up to nearly 6% of the funds transferred, I have had to make a tough decision.


Under the current dispensation of taxes that begun on 1st July 2018, I find it grossly unfavourable to use MM services for my transactions. It is time for me to consider a repeat of my money transfer practices of the 1990s.

It’s obscene for one to be charged UGX 50,000/= (USD 12.5) to transfer UGX 1,000,000/= (USD 256). I insist that principles of taxation call for fairness. Matters are worsened by the fact that as a Ugandan, I hardly see any improvement in the public services to warrant paying all these new taxes of which the #SocialMediaTax is another addition.

Apart from maintaining my Mobile Money account to buy Airtime, pay for Electricity and Water bills, I do not expect to transact i.e. pay out or receive money on my MM line starting 9th July 2018. Someone has to sober up.

James Wire is a Business and Technology Consultant based in Kampala, Uganda
Follow @wirejames on Twitter.
Email lunghabo [at] gmail [dot] com

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