FINANCIAL LITERACY, INSURANCE AGAINST POVERTY

How does a man like Floyd Mayweather—arguably the most successful prizefighter of his generation, with career earnings said to exceed $1 billion, find himself dogged by tax liens, lawsuits and whispers of cash flow strain? And yet, that is precisely the narrative emerging: vast wealth tied up in property, but pressure on liquidity; assets in abundance, but cash in short supply.

It is easy to dismiss such accounts as the excesses of celebrity life. But to do so is to miss the more useful lesson. Strip away the scale the private jets, the Manhattan duplex, the Las Vegas real estate, and what remains is a problem that is far more familiar, even mundane.

It is the gap between earning money and understanding it.

That gap is where fortunes are made—and lost.

We tend to frame poverty as an income problem. Raise incomes, the thinking goes, and poverty recedes. There is truth in that, of course. But it is an incomplete truth.

"Because across income levels—from the salaried professional to the trader in Owino you encounter the same pattern: money comes in, but very little stays...

The issue is not just how much is earned. It is what is done with what is earned.

Money, left unmanaged, has a way of evaporating.

This is why financial literacy is not a luxury. It is not something to be acquired after one has “made it.” It is, quite simply, the only reliable insurance against poverty. Not because it guarantees wealth, but because it reduces the probability of losing it.

The distinction matters.

Consider the difference between income and wealth. Income is a flow—a salary, a fee, a profit margin. Wealth is a stock—the accumulation of assets that continue to generate income even when the primary source of earnings slows or stops. Too often, a rising salary is taken as evidence of rising wealth. It is not.

Without deliberate allocation, income turns into consumption.

And consumption, however justified, does not compound.

This is where many high earners come unstuck. The trappings of success—houses, cars, lifestyle upgrades arrive early. The discipline of asset building arrives late, if at all. The result is a life that looks prosperous on the surface but is structurally fragile underneath.

A single disruption—a job loss, a business downturn, a delayed payment, exposes the fragility.

Seen through this lens, the Mayweather story is less an outlier and more an exaggerated version of a common reality. Assets that cannot easily be converted into cash. Obligations that demand immediate settlement. The uncomfortable space in between.

Liquidity, it turns out, matters as much as net worth.

For the ordinary Ugandan, the numbers are smaller but the dynamics are identical. The teacher who builds a house over 20 years but has no savings to fall back on. The entrepreneur whose capital is locked up in stock that cannot move. The professional whose lifestyle expands in line with income, leaving no room for investment.

Different circumstances, same outcome.

Financial literacy is about three disciplines.

The first is allocation—deciding, in advance, how income will be split between consumption, saving and investment. This is less about theory and more about habit. A standing instruction that channels a portion of income into treasury bonds or a collective investment scheme each month does more for long-term wealth than any sporadic investment inspired by market chatter.many of the assets we celebrate—land held indefinitely, high-end consumption goods are either illiquid or non-productive. They may preserve value. They rarely grow it.

The second is asset selection—understanding what constitutes a productive asset. In Uganda’s context, this increasingly includes government securities offering double-digit yields, dividend-paying equities on the USE, and well-run businesses. These are assets that generate cash flow. They work, quietly and consistently.

By contrast, The third is reinvestment. This is where compounding, often described but rarely experienced, does its work. Returns, whether in the form of bond coupons or dividends, must be redeployed. Over time, the effect is transformative. Modest sums, consistently invested and reinvested, begin to scale in ways that defy intuition.

Miss one of these disciplines, and the system begins to falter.

What makes the absence of financial literacy particularly dangerous is that it does not announce itself early. In the initial stages, everything appears to be working. Income is rising. Consumption is improving. The outward indicators are positive. It is only later, when obligations accumulate and income becomes uncertain, that the underlying weakness becomes visible.

By then, adjustment is difficult.

Uganda today is at an interesting inflection point. Financial instruments that were once the preserve of institutions are increasingly accessible to individuals. Treasury bonds can be purchased in relatively small denominations. The stock market, while still shallow, offers entry points. Digital platforms are lowering transaction costs.

In principle, the architecture for broad-based wealth creation is taking shape.

But access without understanding is a risk.

Without financial literacy, participation in these markets tends to veer towards speculation. Investors chase price movements rather than underlying value. Entry and exit decisions are driven by sentiment rather than analysis. Losses, when they come, are attributed to the market rather than the method.

In such an environment, the market performs a different function. It transfers wealth—not from the rich to the poor, but from the uninformed to the informed...

Which is why the conversation on financial literacy needs to move from the margins to the centre. Not as an abstract concept, but as a practical toolkit. How to allocate income. How to identify productive assets. How to reinvest returns. How to think about risk.

In the end, the most valuable asset an individual can possess is not a piece of land or a portfolio of properties. It is the capacity to manage money—consistently, rationally, over time.

Because incomes fluctuate. Markets move. Opportunities come and go.

But financial literacy endures.

And in a world where the line between comfort and crisis can be thinner than it appears, it remains the only insurance that reliably holds.

MOMO PROFIT UP 23.5% TO SH308.9BN ON TRANSATION GROWTH

MTN Mobile Money Uganda (MoMo) delivered a strong set of results for 2025, with profit after tax rising 23.5% to sh308.9 billion, up from sh250.2 billion in 2024, but the real story lies beneath the headline numbers — in the rapid expansion of its lending business, which is beginning to redefine the platform’s economics.

At the heart of MoMo’s growth is a sharp surge in its loan book. Loans disbursed through the platform jumped 86.2% to sh2.7 trillion, reflecting accelerating uptake of digital credit products under its Pay, Borrow, Invest ecosystem.

This matters because lending changes everything.

For years, mobile money has largely been a transaction-driven business — dependent on fees from transfers, withdrawals, and payments. That model, while scalable, is inherently limited by pricing pressure and the cost of maintaining agent networks. Lending, by contrast, introduces a high-margin revenue stream that is less dependent on transaction volume and more on balance sheet utilisation and risk pricing.

In simple terms:

Payments bring volume. Lending brings margins.

The significance of the sh2.7 trillion in loans disbursed is not just its size, but what it signals — that MoMo is successfully leveraging its data, distribution, and customer base to move into financial intermediation. With over 14.7 million active wallets, the platform has a unique advantage in assessing creditworthiness through transaction histories, enabling it to scale credit faster than traditional banks.

Over time, this could become the single most important driver of profitability.

Revenue growth anchored on scale and service diversification

Against this backdrop, total revenue grew 20.2% to sh1.2 trillion, up from sh981.9 billion, supported by increased usage across the ecosystem.

Transaction activity remained robust:

• Transaction volumes rose 16.8% to 5.0 billion

• Transaction value increased 23.3% to sh195.5 trillion

• Active wallets grew 6.5% to 14.7 million

More importantly, MoMo is beginning to shift its revenue mix. Advanced services — including payments, lending, and savings — now contribute 30.6% of total revenue, up from 28.7% in 2024.

This shift is subtle but critical. It signals a move away from reliance on basic transfer fees toward a more diversified, and potentially more profitable, fintech model.

Operating leverage begins to emerge

Operating profit rose 26.2% to sh454.1 billion, outpacing revenue growth and indicating early signs of operating leverage.

However, the cost base remains heavy:

• Selling and distribution costs climbed to sh502.7 billion from sh425.5 billion

• Agent commissions and marketing expenses continue to absorb a significant portion of revenue

This reflects the structural reality of mobile money — scale comes at a cost. But as lending and other digital services grow, they offer a pathway to decouple revenue growth from distribution costs, improving margins over time.

Deposits grow to sh1.47 trillion, strengthening funding base

MoMo’s balance sheet tells an equally important story.

Customer deposits — the mobile wallet balances — rose to sh1.47 trillion, up from sh1.37 trillion, a 7.4% increase.

This growth provides the foundation for its lending ambitions.

In traditional banking, deposits fund loans. In MoMo’s case, while regulatory structures differ, the accumulation of customer balances creates a stable liquidity base and opens opportunities for partnerships in credit provision.

The implication is clear:

As deposits grow, the capacity to support lending — directly or through partners — expands.

At the same time, cash and bank balances surged to sh214.2 billion, up from sh78.4 billion, reflecting strong liquidity and improved cash generation.

Assets expand as platform deepens

Total assets increased 14.6% to sh1.87 trillion, driven largely by higher trust balances and cash holdings.

The balance sheet remains highly liquid, but its composition increasingly reflects a financial services platform rather than a pure payments business.

Equity and cash flows signal maturity

Equity rose sharply to sh152.2 billion, up from sh42.2 billion, despite dividend payments of sh198.9 billion during the year.

Meanwhile, operating cash flow rebounded strongly to sh190.9 billion, from a negative sh9.9 billion in 2024 — a clear sign that the business is now generating sustainable cash from its operations.

Why lending is the future of MoMo

The surge in digital lending is not just another growth metric — it is the pivot point for MoMo’s next phase.

If sustained, it could:

• Lift margins, as credit products typically yield higher returns than transaction fees

• Increase customer stickiness, as borrowers are more likely to remain active users

• Unlock cross-selling opportunities, including savings and investment products

• Position MoMo as a financial intermediary, not just a payments platform

But it also introduces new risks:

• Credit risk and potential defaults

• Regulatory scrutiny as the business moves closer to banking

• The need for more sophisticated risk management systems

The bigger picture

The 2025 results show a business at an inflection point.

MoMo is still driven by transaction growth — sh195.5 trillion in annual value processed — but it is increasingly being defined by what sits on top of that infrastructure: lending, savings, and digital financial services.

The expansion of the loan book to sh2.7 trillion in disbursements is the clearest indication yet of that shift.

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Summary of Key Financial Results

Metric	2025 (Ushs)	2024 (Ushs)	Change (%)
Total Revenue	1.2 trillion	981.9 billion	+20.2%
Operating Profit	454.1 billion	359.8 billion	+26.2%
Profit After Tax	308.9 billion	250.2 billion	+23.5%
Total Assets	1.87 trillion	1.63 trillion	+14.6%
Customer Deposits (Float)	1.47 trillion	1.37 trillion	+7.4%
Cash & Bank Balances	214.2 billion	78.4 billion	+173%
Total Equity	152.2 billion	42.2 billion	+260%+
Net Operating Cash Flow	190.9 billion	(9.9 billion)	Turnaround
Loans Disbursed	2.7 trillion	~1.45 trillion	+86.2%

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Bottom line:
MoMo’s 2025 results are not just about profit growth — they mark the emergence of a new business model. The surge in digital lending, backed by a growing deposit base and vast transaction data, positions MoMo to evolve into a high-margin financial platform. If executed well, lending could become the engine that transforms scale into sustained profitability.

WHEN COFFEE RULED THE UGANDA SHILLING

There was a time, not too long ago, when you could tell the direction of Uganda’s exchange rate by simply looking at the coffee calendar.

As a young reporter filing for Reuters in the late 1990s, I learnt this early. Come September, as the coffee season peaked, the Uganda shilling would firm almost on cue. Exporters, flush with dollar earnings, would crowd the market converting proceeds. The greenback would soften, the shilling would strengthen. Then, as the season tapered off, the reverse would happen. The currency would weaken, liquidity would tighten, and the cycle would repeat itself the following year.

It was neat. Predictable. And deeply revealing.

So predictable, in fact, that speculators began to play the cycle—betting against the shilling as the coffee season wound down. It got to the point where the then central bank governor, Emmanuel Tumusiime-Mutebile, famously warned that anyone trying to game the market would have their “fingers burnt.”

That warning captured the moment: a shallow foreign exchange market, dominated by a single commodity, and prone to seasonal swings that could be read like a script.

"Uganda was, in effect, a one-crop economy with a currency that danced to the rhythm of a single harvest...

That rhythm has largely faded.

The newly released Uganda Bureau of Statistics (UBOS) export statistics tell the story—not loudly, but unmistakably. In 1996, Uganda’s total exports stood at $711 million, and coffee alone brought in about $410 million—a commanding 58% of total exports. Everything else—fish, cotton, tea—was a distant supporting cast.

Gold, at the time, was almost an afterthought—bringing in just $52 million, or about 7% of exports.

Fast forward to 2025, and the scale—and structure—of exports has changed dramatically. Total exports have surged to about $13.7 billion. Coffee earnings have risen to roughly $2.5 billion, but their share has declined to about 18% of total exports.

And gold?

Gold has gone from the margins to the centre. Export earnings have jumped to about $6.4 billion, accounting for roughly 47% of total exports.

That single shift explains much of what has happened.

What this has done, quietly, is to change the character of the foreign exchange market. Export inflows no longer arrive in one seasonal surge tied to coffee. They come in waves—gold, agriculture, regional trade—smoothing what was once a highly predictable cycle.

The old September effect on the shilling has been diluted, if not entirely erased.

In short, Uganda has moved from a single harvest economy to a portfolio of exports—albeit one still heavily tilted in a different direction...

Back in 2014, when Ricardo Hausmann and his co-authors released their study How Should Uganda Grow?, it did not remain confined to academic circles. Hausmann himself came to Kampala soon after, making the case that Uganda’s future lay not in producing more coffee, but in producing new things altogether.

The diagnosis was stark. Uganda’s export basket was dominated by primary commodities—coffee, fish, tobacco—accounting for roughly 85% of exports. The country produced what many others produced, with little in the way of sophistication.

Even then, there were early signs of movement. The study pointed to diversification into fish, flowers, and construction materials for neighbouring markets. Uganda, in Hausmann’s “product space,” was beginning to shift—tentatively, but perceptibly.

A decade later, that shift has broadened—and deepened.

And nowhere is this more evident than in something that barely featured in the export conversation back then: power.

In the 1990s, Uganda was a power-deficit economy. Load shedding was routine, industrial growth constrained, and the idea of exporting electricity would have seemed fanciful. Today, Uganda exports power to Kenya, Rwanda, South Sudan and eastern DRC. What began as surplus from new generation capacity—Bujagali, Isimba, Karuma has evolved into a modest but growing regional trade.

It may not yet rival coffee or gold in value, but it is qualitatively different.

Power exports are not about what lies in the ground or grows on trees. They are about infrastructure, planning, and coordination. They require transmission lines, cross-border agreements, and regulatory frameworks. In Hausmann’s language, they represent a thicker set of capabilities—more letters in the scrabble set.

And they point to something else: the rise of regional opportunity.

The study hinted at this when it noted that regional markets, South Sudan in particular, were beginning to demand not just food, but construction materials and basic manufactures. That demand has since expanded. Uganda is now exporting cement, steel, processed foods—and increasingly, electricity into a region that is urbanising, rebuilding, and growing.

In effect, Uganda has become not just a producer, but a regional economic platform...

But before we get carried away, a note of caution.

This is diversification, yes—but of a particular kind.

Coffee’s dominance has been diluted, but replaced more decisively than we often admit, by gold. And gold, as Hausmann would remind us, is not complex. Its value lies in geology, not in accumulated knowledge. In that sense, Uganda has traded one form of dependence for another—arguably a larger and more volatile one.

Similarly, much of the export expansion remains in what economists call the “periphery”—agriculture, food processing, and basic manufacturing. The study was clear: Uganda had made limited inroads into more complex sectors such as machinery and chemicals. That observation still largely holds.

And yet, something important has changed.

Uganda is accumulating capabilities. The ability to produce cement, export electricity, or serve regional markets reflects learning—incremental, but real. And in the Hausmann world, learning is everything. What a country produces today determines what it can produce tomorrow.

That is why this moment matters.

"Uganda has moved beyond dependence, but it has not yet reached complexity. It sits somewhere in between—diversified, but not transformed...

The study outlined two paths forward. One was “parsimonious transformation”—building on existing strengths like agro-processing. The other was “strategic bets”—pushing into more complex industries.

Power exports sit neatly between the two—an extension of existing capability, but also a gateway to more complex regional integration.

And then there is oil.

A decade ago, Hausmann warned that oil could finance diversification or undermine it. As Uganda edges closer to first oil, that warning feels less theoretical and more immediate.

Because if there is one lesson from the journey from 1996 to today, it is this: diversification is not an event; it is a process.

The disappearance of the coffee-driven exchange rate cycle is one signal.

The rise of gold is another—more dominant than we expected.

The emergence of power exports is perhaps the most telling.

Small shifts, individually. But together, they suggest an economy that is learning to stand on more than one leg.

The question now is whether it can learn to run.

THE SOVEREIGNTY BILL:SHOOTING OURSELVES IN THE FOOT?

 Patrick runs a small pharmaceutical distribution business in Ntinda. He imports medicines through a supply chain financed partly by a Dutch development bank loan. His company has a Kenyan minority shareholder. He pays his taxes. He employs eleven people.

Under the Protection of Sovereignty Bill 2026, Patrick could be classified as an agent of a foreigner.

Is it me, or are we trying to dismantle the very engine that rebuilt this country?

There is a story Uganda tells about itself. After the devastation of the Amin years, after the chaos of the early 1980s, Uganda rebuilt. GDP grew. Infrastructure returned. A middle class emerged.

But the version the government seems to have forgotten is what powered that reconstruction.

It was not domestic capital alone. It was World Bank loans, bilateral grants, and FDI from multinationals willing to bet on a fragile frontier market. It was investors who planted money in Uganda when the risk was real. And it was the river of money that never makes the headlines — remittances from Ugandans in London, Minneapolis, and Dubai sending money home for school fees, medical bills, and small businesses that no local bank would touch. According to Bank of Uganda data, remittance inflows have grown to rival coffee exports in some years.

Under this bill, a Ugandan in Toronto who sends money home to support a local advocacy campaign could be committing a prosecutable offence.

Is it me, or are we at war with our own diaspora?

Now, what the government is right about.

"Foreign money that arrives without disclosure and departs without accountability is a legitimate concern. The idea that Uganda's governance should be shaped in Kampala, not choreographed from Brussels or Washington, is sound constitutional instinct. Article 1(1) — all power belongs to the people — is a founding principle, not a slogan.

The government deserves credit for naming the problem.

But then it wrote the wrong solution.

The bill introduces sweeping restrictions on anyone who receives foreign money or engages in activity construed as promoting foreign agendas. The definitions are extraordinary in their reach. A company with a foreign minority shareholder. A hospital on donor funding. A researcher on a European grant. All of them, potentially, agents of foreigners.

And once you are classified as an agent of a foreigner in this bill, the state does not send you a letter. It can send you to prison for twenty years.

That number is worth sitting with. The US Foreign Agents Registration Act — the FARA statute Ugandan officials love to cite as justification — carries a maximum of five years. Uganda's bill is four times harsher. Russia's foreign agent law, deployed to silence journalists and opposition figures and widely condemned for it, does not go as far as this bill in its definitions, its funding caps, or its banking surveillance requirements.

When your legislation makes Moscow's model look moderate, something has gone very wrong in the drafting room.

The funding cap compounds the damage. The bill restricts foreign receipts to sh400 million per year,  roughly USD 106,000 — before ministerial approval is required. Banks must submit monthly reports on all transactions involving foreign entities. Non-compliance attracts fines of up to sh4 billion.

"For a country that has spent forty years carefully rebuilding its reputation as a stable, investment-friendly destination, this is a remarkable amount of goodwill to incinerate in a single piece of legislation.

And here is the contradiction that should embarrass the bill's promoters. For 2025/2026, the government budgeted sh13.41 trillion in external financing. Borrowing. From foreigners. To run the state.

You cannot spend forty years inviting the world to build Uganda — with its loans, its grants, its equity, its remittances  and then pass a law that treats that same involvement as a threat to be criminalised.

The final problem is the most damning. Existing law already covers every legitimate concern this bill claims to address. The Anti-Money Laundering Act 2013 already mandates due diligence on foreign-sourced funds and empowers the Financial Intelligence Authority to track suspicious flows. The Anti-Terrorism Act 2002 already criminalises financing designed to destabilise the state. The NGO Act already requires registration and disclosure of funding.

Every genuine target — covert political financing, undisclosed foreign interference is already an offence.

Consider the timing. 

Uganda's tax-to-GDP ratio sits at around 13 percent — well below the Sub-Saharan Africa average of 18 percent. That gap is not a footnote. It is the difference between a state that can fund its own ambitions and one that cannot. 

And here is the truth that no budget speech ever says plainly enough: government does not generate wealth. It redistributes it. The wealth that government taxes, borrows against, and spends originates entirely in the private sector — in the Patrick Ntindas of this country, in the traders, the manufacturers, the service providers, the farmers, the engineers. The strength of any economy is ultimately determined by the viability of its private sector. A weak, frightened, over-regulated private sector produces a weak state. There is no other arithmetic.

Closing the tax gap requires exactly the kind of economic activity this bill threatens to chill — cross-border investment, foreign-linked enterprise, the entrepreneurial energy of Ugandans who have one foot in the global economy and one foot at home.

Some in government may be quietly emboldened by the prospect of oil revenues arriving later this year, reasoning that petroleum will eventually reduce dependence on foreign financing. That logic is understandable. But it is also dangerous. Oil revenue, when it comes, will be a cushion — not a replacement for the broad-based private sector activity that sustains a modern economy. And the personal initiative that drives that activity is not a tap you can turn off and on at will.

Dampen that initiative now, through fear, compliance costs, and the creeping suspicion that cross-border connections are criminal, and you will not easily recover it. Not even with oil.

The NRM caucus resolved to support the bill before it was officially published. The new parliament will almost certainly pass something. The question is what form.

Because the sovereignty law Uganda actually needs could be written in twenty clauses. Transparent registration of foreign-funded political activity. Proportionate penalties. Ministerial discretion confined to what the Constitution can sustain. That law would protect genuine sovereignty and survive constitutional challenge.

This bill will not.

Patrick in Ntinda built his business on cross-border capital. His employees built their lives on his payroll. He is not a threat to Uganda's sovereignty.

He is Uganda's sovereignty — in the only form that ultimately matters. A people prosperous enough, and free enough, to make their own choices.

The bill, as written, threatens both.

 

FROM POSTBANK TO PEARL: BETTING ON A HOMEGROWN BANK

There is an old habit in Uganda’s banking halls.

When the conversation turns serious—large deals, structured finance, regional expansion—the instinct is to look outward. To Nairobi. To Johannesburg. Sometimes even to London.

That instinct did not come from nowhere. For decades, Uganda’s banking sector has been dominated by subsidiaries of multinational institutions—well-capitalised, system-driven, and ultimately accountable to shareholders far removed from the customers they serve.

It has worked. But it has also defined the limits of imagination.

Which is why Pearl Bank’s latest results are worth paying attention to, not just for what they say, but for what they hint at.

The numbers themselves are strong.

"Profit after tax rose 34 percent to sh47.3 billion. Customer deposits jumped 43 percent to sh1.42 trillion. And Wendi wallet balances surged more than fivefold to sh240.5 billion...

On paper, this is a bank gaining momentum.

But the more interesting story is this: a fully Ugandan-owned bank is beginning to behave like it believes it can shape the market, not just participate in it.

And that is new.

Because unlike its multinational peers, Pearl Bank is untethered.

It does not have a head office in Johannesburg asking about quarterly returns.
It does not have a regional strategy dictated from Nairobi.
It does not have to optimise for investors who have never set foot in Nakaseke or Nebbi.

That freedom matters.

It means the Bank can ask different questions.
What does banking look like if you start with the farmer, not the balance sheet?
What does credit look like if you understand the harvest cycle, not just the collateral?
What does inclusion mean if the customer’s first interaction is on a phone, not across a counter?

This is not to romanticise local ownership. Freedom without discipline is chaos.

But it does create space for experimentation, for adaptation, for the kind of trial-and-error that produces solutions that actually fit.

And in Pearl Bank’s case, that experimentation is beginning to show.

The rebranding from PostBank to Pearl Bank last year was a major signal.

PostBank was about access. It carried the legacy of a savings institution—reliable, present, but not necessarily ambitious. Pearl Bank is something else. The name is not accidental. It borrows from the “Pearl of Africa,” but more importantly, it suggests a bank that sees itself as part of Uganda’s economic identity—and its future.

In conversations, Managing Director Julius Kakeeto has framed this shift more directly: from access to impact.

That sounds like branding. But it has operational implications.

Take agriculture.

For years, banks have treated agriculture as a necessary risk—important, but difficult to lend to. Pearl Bank appears to be taking a different view. Rather than isolate the farmer, it is looking at the entire value chain -- inputs, aggregation, processing, market access and asking how to finance the system, not just the individual.

It is a small shift in thinking. But it changes the risk equation.

Or consider its approach to women.

In many parts of Uganda, women are the economy—running small businesses, managing household cash flows, anchoring community trade. Yet they remain underbanked. The Bank’s combination of group lending and digital access is not revolutionary. But it is practical. It meets people where they are.

This is what locally tuned banking looks like. Not grand innovation, but consistent alignment with reality.

Then there is Wendi.

If the balance sheet tells one story, Wendi tells another.

Wallet deposits grew from sh45.5 billion to sh240.5 billion in a year. That is not incremental growth. That is behavioural change.

Customers are not just using the platform—they are moving their money onto it.

And once that happens, the bank begins to change.

Branches become less central.
Transactions become continuous.
Data becomes the new collateral.

"Over time, the question stops being whether the bank has enough branches, and becomes whether it has enough users...

This is where Pearl Bank’s position becomes interesting.

Multinational banks have scale. But they also have legacy systems, processes, and hierarchies. A homegrown bank, starting from a different base, has more room to pivot—integrating IT systems, experimenting with data-driven credit models, even layering in artificial intelligence in ways that reflect local usage patterns.

The advantage is not size. It is adaptability.

Of course, adaptability comes at a cost.

Everything must be built—systems, capabilities, governance frameworks. What others import, you must create. And the margin for error is smaller when the capital is your own.

Which brings us back to the central tension.

Pearl Bank is not just another bank. It is, whether it likes it or not, a test case.

"Can a fully Ugandan-owned institution—free from foreign head offices and their constraints—build a model that is both commercially viable and developmentally relevant?..

The early signs are encouraging. Deposits are growing. Profitability is improving. Digital adoption is accelerating. The brand has been reset.

But the harder phase is ahead.

Deposits must become loans—productive, well-structured loans that fuel growth without compromising asset quality. Digital platforms must scale without undermining trust. And ambition—especially the hinted move into regional markets—must be matched by capability.

Because the truth is this: competing locally is one thing. Competing regionally is another.

For now, Pearl Bank remains a work in progress.

But it is a work in progress worth watching.

Because if it succeeds, it will do more than grow its balance sheet.

It will challenge an old assumption—that serious banking must always come from somewhere else.

And in doing so, it may just redefine what a Ugandan bank can be.

WE ARE TAXING THE PHONE THAT COULD SAVE UGANDA'S ECONOMY

Nakato sells second-hand clothes in Owino. No bank account. No paperwork trail. No loan officer who would look at her twice. But two years ago, she bought a refurbished Tecno smartphone on instalments. Today, she receives payments on Airtel Money, orders stock from Kikuubo via WhatsApp, and sends school fees to Masaka without leaving her stall. She has never stepped into a bank. She does not need to. The phone is her bank, her market, and her accountant.

And every time she uses it, the government taxes her.

That is where the story begins — and where the policy contradiction becomes impossible to ignore.

Because while Nakato pays a one percent excise duty on every mobile money transaction, her wealthier counterpart moving money through a bank account pays nothing. Same economic activity. Different tax treatment — depending on whether you are inside or outside the formal financial system.

Is it me, or are we taxing inclusion?

Start with the scale of what is at stake.

MTN Uganda’s revenues crossed sh3.6 trillion last year. Airtel’s  

revenues crossed the sh2trillion mark last year. The value of transactions flowing through mobile money platforms two years ago exceeded Uganda’s entire GDP of roughly sh200 trillion. In effect, the sector’s digital rails are now carrying an economy’s worth of value.

And yet we tax the very infrastructure that makes this possible.

Global evidence is unequivocal. A 10 percent increase in mobile or broadband penetration drives between 0.5 and 1.5 percent additional GDP growth. In Sub-Saharan Africa, where mobile is often the first and only access point to the digital economy, the impact tends to be even higher. For Uganda — still largely informal, still under-connected — this is not marginal. It is transformative.

Which makes our policy posture all the more puzzling.

We treat the phone as a luxury good rather than as economic infrastructure.

A smartphone today is not a lifestyle device. It is the entry point to the economy itself. It is a payments platform, a business directory, a logistics tool, a credit history, and a marketplace — all in one. For a trader in Owino or a boda rider in Gulu, it is the most productive asset they own.

Yet we tax it at the border.

Import duties on smartphones raise the cost of entry into the digital economy before a user even switches the device on. Rwanda and Tanzania have taken a different view — lowering device costs deliberately to accelerate adoption, expand mobile money usage, and ultimately widen the tax base through higher economic activity.

The trade-off is straightforward. The revenue collected at the border is small. The growth foregone by keeping devices expensive is not.

Then comes the second layer of taxation — the one that bites daily.

Mobile money transactions attract excise duty. Bank transfers do not.

It is, in effect, a tax on the informal sector’s pathway into formality. The very citizens that mobile money has brought into the financial system — those excluded for decades by traditional banking — are now the ones paying a premium to transact.

And yet mobile money has arguably done more for financial inclusion than any policy intervention in the last 20 years.

From Owino to Gulu to Mbarara, millions now participate in a traceable financial ecosystem. Payments leave records. Records create data. Data enables visibility. And visibility is the foundation of taxation.

URA cannot tax what it cannot see.

Mobile money makes the invisible visible.

This is how informal economies formalise — not through enforcement, but through convenience. When transactions move onto digital rails, the tax base expands organically. Every payment, every transfer, every transaction is a step toward a broader, more measurable economy.

Which is why taxing those transactions is counterproductive.

Lower transaction costs would increase volumes. Higher volumes would expand the pool of traceable economic activity. Over time, government would collect more — not less — revenue, but from a wider base rather than higher rates.

And yet, in a moment of policy irony, the conversation has begun to drift in the opposite direction — proposals to introduce excise duty on bank transactions to “level the playing field.”

Level it downwards.

Tax everyone equally.

It is a seductive argument — and a deeply flawed one.

Because the problem is not that bank transactions are undertaxed. The problem is that mobile money is overtaxed. Expanding a distortion does not correct it. It simply spreads the inefficiency across the entire financial system.

If anything, the logic points the other way.

The rational policy is not to tax banks like mobile money. It is to stop taxing financial transactions altogether.

Remove the friction. Let money move.

Because every transaction cost is a tax on economic activity itself — a brake on commerce, a penalty on inclusion, a disincentive to formalisation. In an economy trying to broaden its tax base, that is the last thing you want.

Kenya’s experience with M-Pesa offers a clear preview. Affordable mobile money enabled households to save, invest, and grow small businesses — lifting many out of poverty. Uganda is on the same path, but with one hand tied behind its back.

The cost of this policy choice is not abstract.

Uganda’s tax-to-GDP ratio remains low, not because rates are insufficient, but because the tax net is narrow. Most economic activity still sits outside the formal system. Every barrier to digital adoption — expensive devices, taxed transactions — slows the migration of that activity into the visible economy.

And every delay is a missed opportunity for growth.

The solution is not complicated.

It is, in fact, disarmingly simple.

First, reduce or eliminate import duty on smartphones. Treat them as productive assets, not consumption goods.

Second, eliminate excise duty on all financial transactions — mobile money and bank transfers alike.

These are not concessions to telecom companies or banks. They are investments in SMEs, in financial inclusion, and in the long-term expansion of the tax base.

Because the phone is not the problem.

The phone is the economy.

And until policy catches up with that reality, we will continue to tax the very tool that could accelerate Uganda’s growth.

MAN WAS NOT MADE FOR THE ECONOMY

A few weeks ago, a boda rider I often meet told me business had improved. Fuel prices had stabilised, rides were more frequent, and on a good day he could take home sh30,000. “Things are better,” he said, with a shrug that suggested cautious optimism.

But as we talked, the cracks appeared. His children had missed school the previous term over fees. The household still cooked on charcoal. Water came from a shared source two lanes away. When he fell sick last year, treatment meant borrowing from a savings group. Better income, yes. Better life? Not quite.

Last week, the Uganda Bureau of Statistics (UBOS) released the Multidimensional Poverty Index (MPI) 2024 report a fresh and long-overdue look at our development story.

For years, we have measured poverty by what is in people’s pockets. The MPI forces a more uncomfortable question: what is missing from their lives?

That shift matters.

"Uganda’s poverty debate has long been framed in narrow terms. Traditionally, we have not even measured poverty by income, but by consumption—how many calories one can afford. If a household can meet minimum food requirements, it is deemed non-poor. By that logic, our boda rider is improving.

But this has always been a flawed lens. Calories can fill the stomach, but they do not power a home, educate a child, insure a family, or connect a business to opportunity.

Western economies, by contrast, define poverty far more broadly—by living standards: access to electricity, clean water, education, healthcare, financial services, and the opportunities these unlock. Poverty there is not just about survival; it is about participation in a modern economy.

And that difference has quietly given us a false sense of progress.

We have celebrated declining poverty rates while ignoring the fact that millions remain locked out of the very systems that create prosperity. The economy has grown—telecoms crossing the billion-dollar revenue mark, banks posting record profits, capital markets deepening—but the lived experience of many Ugandans has changed far more slowly.

The MPI is an attempt to correct that distortion.

By design, it moves beyond income to capture deprivation across education, health, basic services, and living standards. It asks whether a child is in school, whether a household has electricity, whether it can access clean water, whether anyone has health insurance, whether the family is financially included. In short, it measures not just survival—but capability.

This is not new territory for this column.

Over the years, we have returned to a recurring theme: Uganda’s growth story is uneven. It is clear that we can grow this economy even in our sleep—we are currently the enjoyintg the longest stretch of economic growth since 1900. The last time the economy did not grow was in 1985.

We have seen sectors thrive while households struggle. We have told the story of the supplier crippled by domestic arrears, the small business starved of credit, the household one illness away from collapse.

What the MPI does is connect these dots.

It shows that poverty in Uganda is not merely about low income—it is structural. A household may earn something, but still be deprived in multiple dimensions at once: no electricity, poor schooling, no financial access, inadequate housing. These are not temporary setbacks; they are constraints that limit productivity, opportunity, and ultimately growth.

In that sense, the MPI confirms what has long been evident beneath the surface: Uganda’s economy is generating value, but not yet distributing the ability to create value.

Take financial inclusion. For years, we have argued that access to banking and mobile money is not a luxury, but an economic necessity. The MPI now formally recognises this—classifying households without access to financial services as deprived. That is a significant conceptual shift.

The same applies to infrastructure. When we write about water, sanitation, or electricity, it is often framed as a business issue—the cost of doing business. The MPI reframes it as a household issue: without these basics, individuals cannot participate meaningfully in the economy.

And then there is employment. Not just whether people work, but the quality and stability of that work. Growth without jobs—or with precarious jobs—creates the illusion of progress without its substance.

"The MPI does not solve these problems. But it does something equally important: it changes the question...

Instead of asking, “How many Ugandans are poor?” it asks, “In how many ways are Ugandans deprived?”

That distinction is crucial.

"Because once you see poverty as multidimensional, the policy response must also change. It is no longer enough to chase GDP growth or expand incomes at the margins. The focus must shift to systems: education that works, healthcare that protects, infrastructure that connects, financial systems that include.

Markets alone will not deliver this. Nor will the state acting in isolation. It requires a coordinated approach—public investment, private innovation, and institutional discipline.

Encouragingly, some of the building blocks are already in place. The expansion of mobile money, the push toward digital banking, the gradual extension of electricity access—these are steps in the right direction. But they need to scale, and they need to connect.

At its core, the MPI is a reminder of a simple but often forgotten truth, to paraphrase the good book – man was not made for the economy but the economy was made for man.