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EDITOR’S PICK: How Mobile Money Masked Ugandans Against Covid-19

Mobile money has been one of the biggest drivers of cashless transactions and financial inclusion in the country attributed to increased mobile penetration.

Mobile money was the proverbial financial mask shielding the entire country when movement was at its lowest and fear of infection at its highest.

The life altering announcement by President Museveni limiting movement of people around the country and closing the nation’s borders to the world meant that people could not travel and exchange money physically. So mobile money was the saving grace that even with the looming danger of the corona virus, people would have access to money to pay for their needs including; food, utilities, medicine, to mention a few.

In an instance, Benjamin Mukasa had a female friend who worked at a saloon in downtown Kampala. At the onset of the unprecedented lockdown, stranded without the privilege to move to friends, destitute of money, the young lady who lives hand to mouth had to seek for help from Mukasa who sent her some money through his MTN number which would see her through the tough time during those two weeks.

Mukasa narrates that, “She works at a saloon and I knew that they had closed. She told me she had no money and needed to eat. But because I could not move there, I sent her some money via mobile money.”

The period was tough for many but limiting movement was necessary to contain the medical emergency. Like Mukasa, many who were trying to avoid contraction of the virus turned to mobile money for rescue.

Cashless transactions to the rescue
Paper money was strongly opposed as it was one of the means of spreading the corona virus. Telecom firms; MTN, Airtel, and Africell in solidarity to the fight against the virus scrapped sending transaction fees a move that saw the value and number of transactions during the period grow while person to person transactions registered an equally substantial rise.

Businesses financially included
This was also in part due to the inevitable shift of a multiplicity of businesses from analogue to digital which was enabled through mobile money. Information from numerous technology companies revealed that over 614 businesses went digital as a survival tactic during that period.

At that point, the role of cashless transactions was accentuated.

Mobile money has been one of the biggest drivers of cashless transactions and financial inclusion in the country attributed to increased mobile penetration.

Financial Inclusion
A 2018 Finscope survey undertaken by Financial Sector Deepening Uganda (FSDU) found that 78 percent of Ugandans are financially included mainly through mobile money.

Experts assert that financial inclusion is one of the major catalysts for economic growth particularly in sub-Saharan Africa. Financial inclusion not only enables people to trade gainfully, it further ensures that they are able to save for the future, access credit and manage their finances.

Mobile Money has bridged this gap by taking these financial services closer to the people through providing a fast, secure, affordable and a convenient way of accessing financial services using a mobile phone, anywhere at any time.

To bridge the gap, the soaring mobile money agent base also has played a key role.

Increased growing agent base
In spite of the economic paralysis rendered by the pandemic, the number of mobile money agents continued to rise allowing even more people access financial services during the lockdown. The Uganda Communication Commission (UCC) revealed in its report that 8,500 new agents were added to the network between the second and third quarter of 2020.

For those agents, mobile money was also a way around surviving the economic purge characterized by the pandemic.

Mobile Agents Empowered
But since time immemorial, mobile money has been a source of livelihood for many. Jackie Nyamwiza, 18, her life was turned upside down after the death of her father in 2019. She was waiting to further her education in senior five at a school in Gomba district. Her plans were rerouted. With no money for education, she was called upon by her aunt to reside in Kampala where she could seek for employment. It was an uphill task, plagued by lack of adequate formal education to acquire a decent job.

Nyamwiza’s story was rewritten by mobile money. At the tail of 2019, she got a job operating a mobile money stall earning UGX200,000 a month. Nyamwiza reveals that today, she is able to save up to UGX100,000 every month —although she admits that at times she saves less due to her responsibilities to her younger siblings. But she also admits that her life is much better than it was before.

Nyamwiza is one of the thousands’ that have found gainful employment in extending mobile financial services to the masses across the country. MTN alone, employs over 5,000+ people directly and indirectly.

Mobile money agents grow by nearly 50,000 in two years
The number of mobile money agents employed in the telecom industry has grown by 49,488 in two years, signaling the significance of the sector in curbing unemployment in the country.

Paul Lakuna, a research fellow at economic policy research center says the telecom industry has been integral in Uganda’s story of employment. Citing employment of people in the region of selling and distributing scratch cards, renting of land to house telecom masts and acquisition of generators among others —Lakuna says that the industry has bred a multiplicity of jobs both directly and indirectly.

While the number of jobs created experienced a dip around 2010 to 2020 mainly due to technological advancement, the researcher notes that the industry is now one of the biggest drivers of employment in the country.

He said that Covid-19 has made it even more apparent that the country needs telecoms.

“We need to depend on telecoms for a lot of things including e-commerce for those selling online and sending for delivery via motorcycles. Blogging, social media influencers, zoom meetings and remote-based working. Banking and the music industry for those that advertise online; these are all job opportunities,” Lakuna explains, adding that even more jobs are going to be created in the future.

For instance, through creating an enabling environment such as provision of internet and telephony services, and an open application program interface for developers, telecoms such as MTN have empowered many other businesses to operate. In the same vein, telcos have empowered the country through tax contributions aimed at improving service delivery.

Tax Contribution
Over the years, the telecommunication industry has also been lauded for being one of the biggest contributor to Uganda’s tax basket. MTN Uganda in this case was named as the biggest tax payer by Uganda Revenue Authority (URA) for the financial year 2018/2019 having contributed UGX682.4 billion in taxes.

Commenting about the telecom’s tax contribution in a past interview, MTN Uganda’s CEO, Mr. Wim Vanhelleputte said that, “Ugandans embraced MTN from when it first came to Uganda, as we MTN we now consider Uganda as home and therefore  are happy to play our part in supporting government to meet its obligations through timely and accurate remittance of our taxes”.

While the telecom sector is filling up the country’s tax basket, it is also financially empowering thousands of Ugandans like Nyamwiza among many mobile money agents across Uganda.

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