As Ugandans struggle to pay over the top tax (OTT), Parliament has hired MTN Uganda to provide 5GB monthly bundles for each Member of Parliament (MP).

As part of widening the country’s tax base this financial year, government introduced social media and mobile money tax where Social media platforms such as WhatsApp, Twitter, Facebook, You Tube, Viber and Skype among others subjected to a daily levy of Shs200.

Since then, the tax sparked off protests with various activists including MPs, calling on government to scrap it, however their plea hit a snug.

 After the passing the law, State Minister of Finance, Planning and Economic Development, David Bahati, said, “ I don’t think Shs70, 000 a year for Social Media Tax is unreasonable.”

Obongi County MP, Kaps Fungaroo, called for Parliament to intervene after they failed to access social media platforms on their iPads due to rigidities from the service provider.

Upon that, Parliamentary Commission recently embarked on a bidding process to identify the best service provider to provide mobile data and OTT tax for mobile computing devices for MPs.

According to bide notice that was released on May 2, 2019, MTN outcompeted Airtel Uganda Limited and Africel Uganda Limited. The notice shows that MTN will provide 5GB monthly bundle at a cost of Shs30, 000 and Shs6000 OTT tax for every legislator’s internet devices.

Therefore a total of Shs 16,560,000 will be spent on mobile data and OTT tax payment for the 460 MPs for the 460 MPs iPad that were procured at a cost of US$563,000.

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Uganda’s economy continues its robust recovery with projected growth of 6.3 percent in FY2018/19. Timely implementation of public infrastructure and oil-related projects would support growth in the medium term, according to the IMF’s latest assessment of the Ugandan economy.

Uganda is among the countries with the fastest growing population in Africa and remains on course to exceed 60 million by 2030. This challenges the country to create more than 600,000 jobs a year for its expanding labor force and to ensure that the benefits of growth are shared fairly.

Uganda’s development strategy prioritizes scaling up public investment to address critical infrastructure bottlenecks. Long-term sustainability of the development strategy also depends on strong investment in people. Given limited budget resources, the government must find a balance between infrastructure needs and supporting social sectors, such as health and education.

Uganda has relied on external borrowing to finance its large-scale infrastructure projects, which contributed to rising debt, putting more strain on the budget as more resources need to be allocated for interest payments. Nevertheless, the country remains at low risk of debt distress. To help keep debt at manageable levels, the government is finalizing a 5-year domestic revenue mobilization strategy.

In the face of a rapidly-growing population, Uganda needs to ensure a sustainable growth that would create more than 600,000 new jobs every year in the next decade and lift more Ugandans out of poverty.

From 1990 to 2010, Uganda achieved high growth in per capita income, which allowed it to drastically reduce poverty. Since then, however, growth rates have slowed compared to peer countries, which is likely to have contributed to a stalling of poverty reduction.

After receiving debt relief of close to $5.5 billion from multilateral organizations and bilateral donors in the 2000s, Uganda’s debt has been steadily growing. In addition to domestic debt, the country relied initially on the World Bank and African Development Bank for financing. But the share of non-concessional loans from China has been rising in recent years.

Fiscal plans have been a “moving target.” In each of the last three macroeconomic assessments of Uganda, the projected debt path was revised upwards. Having a clear direction for fiscal policy would help budget planning and execution.

Rising debt puts more strain on the budget as more resources need to be allocated for interest payments. One shilling paid for debt service is one shilling less going to a school or a health clinic. The current ratio of interest payments to revenue is comparable to what countries with high risk or in debt distress typically face.

To complement the growing physical capital and ensure its most productive use, the Ugandan government needs to invest adequately in people. But, in recent years, social spending has declined as a share of total expenditure.

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Electricity providers in Uganda are teaming up to find a new business model to boost the speed and efficiency of getting power to those living without it, in the hope it can be copied in other parts of Africa and Asia, project backers said Tuesday.

About 1 billion people worldwide still lack access to electricity, according to the latest data, with efforts moving too slowly to meet a U.N. goal of providing clean, affordable power to everyone on the planet by 2030.

Meanwhile, about another 1 billion are connected to a weak electricity grid, suffering outages and a poor service, said Kristina Skierka, CEO of the Power for All campaign, which is coordinating the push in Uganda.

A major barrier to ending energy poverty is that national power utilities and the renewable energy companies that provide solar home systems and mini-grids for communities have rarely cooperated on the bigger picture, the group said in a report.

“Neither centralised grids nor decentralised energy is purpose-built to solve the energy access problem alone, so there has to be a way to work together,” Skierka said.

In Uganda, Power for All brought the two sides together, helping them to understand one another’s constraints, such as strict regulations on utilities and a lack of subsidies and finance for off-grid providers, she noted.

Under the “Utilities 2.0” initiative, Uganda’s main electricity distribution company, Umeme Limited, and several decentralised renewable power firms aim to demonstrate the potential for an integrated approach.

Selestino Babungi, Umeme’s managing director, said his company recognised the challenges of accelerating electricity access by extending the grid, and wanted to help create solutions that were affordable and could be deployed quickly.

Uganda has a target to increase access to electric power from just a quarter of households now to 60 percent by 2027.

Ashvin Dayal, associate vice president at The Rockefeller Foundation – which is providing an unspecified amount of funding for the project – said his organisation believed it would “catalyse growth and unleash the power of both sectors”.

“Utilities 2.0 is going to provide a concrete example of the kinds of public-private partnerships that are needed today to fundamentally transform the trajectory of energy access not just in Africa, but worldwide,” he said in emailed comments.

Skierka said she hoped new ideas would start to emerge from the Uganda project in six to nine months. Those would become the basis for a plan to extend the pilot to about 10 countries that were ready for such an approach.

William Brent, director of Power for All, said smaller businesses were often better suited to delivering “last-mile” power services to rural communities than large utilities.

Co-operating on electrification could bring financial benefits on both sides, with utilities no longer losing money on connecting people in remote places and decentralised providers potentially finding it easier to access capital to expand.

The end result would be a better-quality, more reliable service for customers that meets their needs and ability to pay, Brent added.

The move to craft a nimbler way to bring electricity to poor, hard-to-reach communities reflects a wider shift in how the world is starting to think about providing urgently needed infrastructure in a high-tech era.

A paper released at the start of May by the Blended Finance Taskforce, a group of about 50 bankers and development experts, urged a more efficient and resilient approach to infrastructure.

Such a shift would look at more decentralised and digitised approaches, focused on services rather than physical assets such as roads, ports or power lines.

“Can we unhook ourselves from the notion that infrastructure is always this big and complicated thing?” asked taskforce chair Jeremy Oppenheim, founder of economic advisory firm SYSTEMIQ. “(People) don’t need a road. They need to get from A to B.”

Targeting the end result, whether transport, clean water or energy, would free up thinking on the best ways to provide green and affordable infrastructure, and how to harness the power of new technologies and natural ecosystems, Oppenheim said.

The paper said the US$2.5 trillion annual gap between what the world needs to spend on infrastructure and what it is investing could be cut by $1 trillion through making infrastructure more productive and delivering services in a physically light way.

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