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How absence of real democracy could ruin your startup

I SPENT most of yesterday evening thinking about my O’Level History lessons. About the chapters we learnt about various African kingdoms, and a question that was common in most examinations: the factors that lead to the growth of Kingdom A, Kingdom B, e.t.c 

We used to joke about how any of such questions, regardless of the kingdom in question always had to have “strong and/or able leaders” among the responses. It was a bit of a template response.

In those kingdoms, there was no democracy. The King’s word was law. It didn’t matter what their subjects felt. They didn’t have the power to think: they only needed to fight. Fight FOR their king.

“The Kingdom of Dahomey [for example] was an important regional power that had an organized domestic economy built on conquest and slave labor, significant international trade with European powers, a centralized administration, taxation systems, and an organized military,” reads this Wikipedia article. Dahomey was located in the area of present-day Benin.

And such seems to be the situation in Uganda today. With the same president since I was three months old, you get a sense of a “more of the same” standard of life. And the inevitable expectation to discuss case studies of how neighbors – Rwanda especially – have made tremendous strides in the direction of development. And Kenya. Actively embracing technology to build for a future we, back in Uganda, only read and write about. A future where a guarantee of constant power supply would enable you to dream about services that require 99.9% uptime.

Then came this week. The week that started with calls for Uganda’s social media users to ensure they participate in the election and to dispel the notion they only just talk without action. You could feel the excitement. The anticipation. The hope. The energy!

Then came 18th. And all this was blown away in just one morning!

Let me explain:

At around 6am on polling day, I was going through my phone as I waited for the team we were meant to work with that day. A friend texted me about why MTN Mobile Money was down, and if I knew how long it could take before it was restored.

I had no idea.

Moments later, I learnt that actually, Mobile Money services, as well as Social Media, had been “disabled” by Uganda’s Communications regulator “due to a threat to Public Order and Safety”, a text message from one of the operators read.

For Uganda, this was quite new, although it wasn’t surprising. Most of my colleagues who said they weren’t going to vote in this election said the reason was because their “votes don’t count” and that government was going to rig, one way or the other.

But we didn’t immediately see the correlation between mobile money as a service and public order and safety. As we explored ways to bypass the blockade, MTN sent further text messages reminding customers that the call centers were going to be closed in just a few hours: 1400hrs local time, the country’s largest operator said.

Ugandan internet users resorted to VPN solutions to access social media sites after the country's operator blocked access. This Google Trends graph shows the interest in "VPN" as a search query over the last few days. Credit: Google Trends
Ugandan internet users resorted to VPN solutions to access social media sites after the country’s operator blocked access. This Google Trends graph shows the interest in “VPN” as a search query over the last few days. Credit: Google Trends

It felt like the country was shutting down. I got calls from friends as we drove out of town to our constituency, trying to enquire how MTN could actually shut down a 24/7 call-in service. The MTN employees in charge of communications I spoke to said they had no prior knowledge of this shutdown, suggesting this was an impromptu requirement.

I’ve spent the 10 months in the Communications Sector, specifically the telecommunications industry. Part of my work has been understanding – and helping others understand – how revolutionary mobile money is, and why it is set to be the future of payments, especially in sub-saharan Africa.

I have worked with youth developing solutions that rely entirely on Mobile Money for payments. In October 2015, MTN said over 70% of all utility bill payments in Uganda were going through its platform, and announced that it had hit a monthly transactions record of over 40 million. Airtel said a  month later that it was facilitating about 20million transactions. That’s a combined 60million transactions a month. Or two million every day.

From the MTN Mobile Money perspective, over the last three days, over four million transactions have been blocked. From an revenue perspective, Uganda’s largest taxpayer has directly lost a minimum of UGX. 2,000,000,000; taking the minimum transaction charge of UGX 500/=. Of course the actual figures would be higher.

While announcing their preliminary observations of this month’s general elections, one of the EU observers said; “… I’ve spoken with your president; he wants to develop the country, he says, but in most cases, development and democracy go hand in hand.” He makes an important point.

With unemployment so rampant, the greater majority of the 60,000+ mobile money agents rely on daily performance to pay their employees – an estimated 160,000, according to MTN. Others – also about 50,000 Ugandans – rely on Mobile Money for lighting. A solution called ReadyPay, available on a pay-to-own basis using MTN Mobile Money, works like a phone top-up to enable the user to make affordable daily Mobile Money payments.

Thousands of hardworking Ugandans being exposed to risk of inability to afford a meal by impunity!

These are real problems, affecting real people. Imagine if the US government could arbitrarily shutdown PayPal! If we’re asking our developers to make mobile money as integral as, perhaps, PayPal is, then we have to guarantee that it will be available when users need it.

Something we can’t!

In the absence of guarantees that such arbitrary, politically motivated, blockades won’t occur, it becomes difficult to convince innovators to develop solutions that actualize a cashless economy. Because you WILL get stuck if you’re onboard a taxi hoping to pay using mobile money, and realize that, without notice, your government asked the operator to shut it down.

But why?

It’s unclear. But Opposition Party FDC claimed that the had been holding about UGX. 500 million that was meant to facilitate their field agents.

This is bad and should be condemned in the strongest terms.

But unfortunately, representatives of government don’t think so:

Impact on Online Publishers

Relatedly, shutting down social media has direct consequence on online publishers, like PC Tech Magazine, who rely on the networks for traffic. In a case where social media accounts for, say, 40% of your traffic, a your local traffic would have fallen significantly since the ban came into effect – until, at least we had enough users browsing via VPNs.

Issues affecting traffic directly affect revenue, especially when implementing visitor-based monetization solutions like Google AdSense.

Yet, such effort isn’t necessarily worth it by any measure. Within 24 hours since social media sites were blocked, 1.4million VPN apps had been downloaded from the Android Play Store. And various other users were using VPN iOS apps.

Beyond ICT, the good old tourism business would probably be most affected by negative stories published about a country that’s considered undemocratic. For the last 6 days, Uganda has been the focus of international media, with the vast majority of the coverage being negative. Unfortunately, this same international media will not be told of a more public-interest positive story to publish about Uganda soon.

Good for development? “You can make your own conclusions,” as the European Union Election Observers said when asked if they considered this election free and fair. 

Or maybe, like in Dahomey, the strongest leaders aren’t always the most democratic. But that has its consequences.


Albert Mucunguzi

Award-winning Founder of PC Tech Magazine and current Chairman of ICTAU.
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