Digital policy reforms could add Shs 14.6 Trillion to Uganda’s GDP - new report

A new study has revealed how implementing the appropriate digital policy reforms could unlock staggering economic potential for the nation. 

The report launched at the GSMA Digital Africa Summit Uganda on Monday,  estimates that with targeted, collaborative policy action, Uganda could connect an additional four million citizens to the internet, spark the creation of 1.79 million new jobs, and generate a formidable UGX 14.6 trillion in additional economic value by the year 2030. 

Titled Driving Digital Transformation of the Economy in Uganda, the document offers a blueprint for accelerating inclusive growth and ensuring that every citizen benefits from the digital economy, aligning perfectly with the nation's ambitious National Development Plan IV (NDP IV) and the Digital Uganda Vision 2040 (DUV).

Uganda’s mobile sector currently serves as a cornerstone of its digital transformation, connecting communities to essential services such as healthcare, education, and finance, whilst contributing nine per cent to the national GDP. 

The ICT industry is expanding at an impressive annual rate of 14.8 per cent and already employs over 2.3 million Ugandans. GSMA analysis confirms that the country boasts excellent 4G population coverage at 96 per cent. 

However, despite this comprehensive infrastructure, a big barrier remains, with three in four Ugandans living within mobile broadband coverage still not using it. 

This usage gap is driven by affordability issues, specifically the high cost of entry-level smartphones, the impact of sector taxes, limited digital skills, and an unreliable energy supply. Overcoming these entrenched challenges is critical to achieving Uganda's connectivity goals.

To overcome these obstacles and reach the next phase of digital adoption, the GSMA calls for a renewed people-centred policy framework and a deeper partnership between the government, industry, and development partners. 

The report identifies five key priority reforms essential for strengthening Uganda’s long-term digital competitiveness. 

These include creating a stable investment environment by amending National Telecom Operator licence obligations from five years to 20 years, and formally designating telecom infrastructure as Critical National Infrastructure. 

The reforms also target affordability by calling for the removal of the 12 per cent excise duty on data services and the exemption of advanced equipment like 4G and 5G gear from VAT on imported services. 

Other reforms focus on eliminating taxes on entry-level smartphones, fast-tracking the Digital Skills Framework, implementing a joint ICT-Energy master plan to ensure reliable power, and modernising regulation for the digital age, including developing a National AI Strategy.

According to the GSMA’s modelling, the implementation of these five reforms by 2030 will deliver shared prosperity across the country. Infrastructure investment requirements to expand 4G coverage to 99 per cent would drop dramatically from the current USD 550 million needed to just USD 10 million. 

The policy changes are projected to connect an additional four million citizens, boosting the total number of unique mobile internet users to 19 million, and significantly reducing the usage gap by seven per cent. 

Economically, this increased digitalisation across sectors such as agriculture, manufacturing, and public services is forecast to generate UGX 14.6 trillion in economic value and 1.79 million new jobs. 

Furthermore, the increased mobile data usage is expected to deliver UGX 3.1 trillion in additional tax revenue—a gain that would far outweigh the estimated UGX 370 billion loss from reducing mobile sector taxation. This creates a sustainable fiscal loop that benefits the entire nation. 

As Angela Wamola, Head of Africa at GSMA, concluded, "By making access more affordable and policies more predictable, Uganda can ensure that digital progress delivers for everyone.”

Would you like to explore one of the five proposed reforms in more detail, such as the suggested tax changes or the plans for energy infrastructure?