BOOK REVIEW: BEFORE GOVT BLAMES THE MARKET, UNTIE ITS SHOE LACES

Book: The Heart of a Cheetah: How We Have Been Lied to about African Poverty, and What That Means for Human Flourishing

Author: Magatte Wade

Imagine entering Usain Bolt in a 100-metre race, tying his shoelaces together, putting a sack of cement on his back and then, when he finishes last, announcing triumphantly that sprinting does not work.

That, in many ways, is what African governments have done to the private sector.

Which is why Magatte Wade’s TheHeart of a Cheetah resonated so strongly with me.

Wade, a Senegalese entrepreneur, is a woman after my own heart. Her central argument is simple: Africa’s best chance of escaping poverty lies not in more aid, more government enterprises or another round of grand development plans, but in unleashing entrepreneurs...

I agree.

Africa is not short of ambitious people. Neither are we short of resources. We have minerals, agricultural land, energy, young populations and increasingly large markets.

What we have consistently lacked is an environment that allows Africans to turn all these advantages into wealth.

And this is where Wade makes one of her most important observations.

Across the continent, governments are creeping back into business, often on the argument that the free market has failed.

But what free market?

Take Uganda.

In the World Bank’s final Doing Business rankings in 2020, Uganda ranked 116th out of 190 economies overall. We were 169th for starting a business and 168th for getting electricity.

Then we turn around and say the private sector has failed.

Failed under what conditions?

"Entrepreneurs operate with expensive electricity, inadequate infrastructure, costly credit, bureaucracy, licences, taxes, unpredictable regulation and delays moving goods.

Then government looks at the resulting weak private sector and declares: “You see? Markets do not work. Government must intervene.”

You cannot tie Usain Bolt’s shoelaces together and then conclude that sprinting does not work.

That argument should make us nervous because we have seen this movie before.

After independence, much of Africa embraced socialism and state capitalism. Governments owned banks, hotels, factories, farms, transport companies and trading enterprises.

The reasoning sounded noble.

The private sector was weak. Local capital was scarce. Government therefore had to step in and lead development.

What followed in many countries was predictable.

State enterprises became centres of inefficiency and patronage. Losses were covered by taxpayers. Jobs became political rewards. Procurement enriched connected insiders.

"Socialism did not abolish elites.

It simply created a different route into the elite...

Instead of creating wealth by satisfying customers, the quickest route to wealth became proximity to government.

And that is what worries about the renewed enthusiasm for government getting directly back into business.

Already, some interventions dressed up as industrial policy look suspiciously like mechanisms for appropriating public money for the benefit of a connected few...

Government announces a project.

Taxpayer money is allocated.

There is a commissioning ceremony, flags, speeches, television cameras and photographs of important people cutting ribbons.

Then come the questions that really matter.

Where are the sales?

Where are the profits?

Where are the exports?

Where is the return on taxpayers’ capital?

Silence.

A private businessman does not have that luxury. If nobody buys his product, he eventually closes shop.

Government can return to Parliament and ask for another appropriation.

This is why Wade believe the free market remains Africa’s best chance of prosperity.

Not because markets are perfect. They are not.

Not because businessmen are saints. They are not either.

But markets impose a discipline that government enterprises rarely face. You must produce something people want, at a price they are prepared to pay. If you do that well, you grow. If you do it badly, someone else takes your customers.

That constant pressure to improve is where productivity, innovation and ultimately wealth come from.

Government has a critical role in this process, but it is a different role.

"Government should protect property rights, enforce contracts, maintain security, educate people, build infrastructure, ensure reliable electricity and maintain macroeconomic stability.

In other words, government should make it ridiculously easy to do business...

Then a virtuous cycle begins.

Businesses grow and employ people. Workers earn incomes and consume more. Companies make profits and reinvest. Government collects more tax from a larger economy without necessarily increasing tax rates.

Those revenues finance better infrastructure and public services, which lower the cost of doing business further.

More investment follows.

The economy expands again.

That is the cycle we should be chasing.

Instead, too often we do the reverse. We tax a small formal private sector more heavily, regulate it more aggressively and then use some of those taxes to finance government businesses that compete against it.

Then we complain that enterprise is weak.

And dare I say it, we should remember where this road can end.

Many African economies travelled it in the 1970s and 1980s.

"Governments accumulated loss-making parastatals. Budget deficits widened. Debt mounted. Foreign exchange became scarce. Economies stagnated.

Eventually we went back, cap in hand, to the World Bank and IMF and were prescribed the dreaded Structural Adjustment Programmes...

Privatise.

Liberalise.

Cut subsidies.

Reduce government spending.

Allow markets to work.

SAPs remain a dirty word in much of Africa, and understandably so. The adjustment was painful and, in some cases, brutally implemented.

"But we should remember what brought us to the hospital.

If we rebuild the same bloated state enterprises, finance politically connected projects indefinitely and crowd out private capital, we should not be surprised if we eventually require the same unpleasant medicine...

There is an irony here worth appreciating.

We may spend the next decade claiming the free market failed, only to eventually invite the World Bank and IMF back to tell us to embrace the free market again.

Better not to make the journey.

The Heart of a Cheetah is ultimately an optimistic book because Wade refuses to accept that Africa is condemned to poverty.

Africa does not need governments trying to outrun the cheetahs.

It needs governments to build the roads, provide the electricity, enforce the rules, protect property and then get out of the way.

Untie the entrepreneurs’ shoelaces.

Clear the track.

Let the cheetahs run.

Because the road back to Structural Adjustment Programmes may well be paved with loss-making government enterprises.

NRM’S BIGGEST SUCCESS MAY BE WHY THE YOUNG ARE ANGRY

One of the NRM’s biggest problems after 40 years in power is that some of its greatest achievements are being discounted precisely because they have lasted so long.

Give people an inch and, quite naturally, they will want a mile.

For much of Uganda’s first quarter-century after independence, the questions were painfully basic. Will I get home safely tonight? Will my property still be mine tomorrow? Will there be sugar, soap or salt in the shops? Will another coup or war overturn everything?

Today those questions sound almost absurd.

That, whatever else one thinks about the NRM, is part of its achievement.

Its two greatest legacies will probably be the restoration of security and the revival of an economy wrecked by political turmoil, economic mismanagement and war.

Younger Ugandans often roll their eyes when older people say: “At least we can sleep.”

It sounds like an embarrassingly low bar.

But those five words carry a deeper meaning.

People who lived in Kampala in the early 1980s remember a city that was often compared to Beirut: gunfire, curfews, roadblocks, armed men and the uncertainty of whether you would make it home.

So “at least we can sleep” is not really about bedtime...

It is shorthand for restored security.

And security underpins almost every economic gain we have made since.

You do not build factories, banks, hotels, telecom networks or supermarkets where property rights are meaningless and armed men can undo years of work in one afternoon.

Security was the foundation.

Everything else came on top of it.

But success resets expectations.

A Ugandan born in 2000 is not going to congratulate government because soldiers do not routinely drag people out of their homes at night.

Why should they?

Security is what governments are supposed to provide.

Their questions are different.

Where is my job? Why is housing unaffordable? Why am I still dependent on my parents after university? Why do connections sometimes seem to count for more than competence?

These are legitimate questions.

The same generational disconnect applies to liberalisation.

Many younger Ugandans do not realise how many things they now treat as basic were once privileges.

Take the telephone.

There was a time when getting a telephone line from Uganda Posts and Telecommunications Corporation could take years. You filled in forms, followed up repeatedly and hoped your application had not disappeared into the mountains of paperwork.

"Today there are more telephone users than there were Ugandans in 1986...

That is not a small transformation.

The same applies, to varying degrees, to electricity, banking and the internet. Goods and services once concentrated among government offices, big companies and a narrow urban elite are now accessible to millions.

None of this means access is universal or affordable enough.

It simply means progress happened.

And this is where the NRM’s next challenge lies.

"The gains of the last four decades will remain politically fragile if too many Ugandans believe they have been captured by a relatively small urban elite...

There is still much to achieve in narrowing disparities in wealth, income and opportunity.

For the urban graduate, frustration may mean a poorly paid job, expensive rent and the feeling that connections matter too much.

For the rural young person, it may mean poor roads, weak schools, limited access to finance, unreliable power and little realistic chance of moving from subsistence to wealth creation.

Economic growth is not enough if too many people remain spectators.

The next phase must therefore be about widening ownership of the gains already made.

More Ugandans need to own productive assets. More farmers need to move into commercial agriculture. More small businesses need to become medium-sized businesses. More households need access to good education, affordable credit, reliable electricity and functioning markets.

The question can no longer simply be whether Uganda is richer than it was in 1986.

The question is how widely that prosperity is shared.

There is, however, another danger: assuming all this progress was inevitable.

It was not.

Countries can go backwards.

Economies can collapse.

Institutions can be destroyed far faster than they are built.

"One symptom of our fading historical memory is the growing revisionism around Idi Amin, especially the claim that expelling Asians in 1972 was some heroic act of economic nationalism...

It was not.

The expulsion removed people who had accumulated commercial knowledge, capital, supplier relationships and management experience over generations and handed businesses to politically favoured beneficiaries, many of whom had neither built them nor knew how to run them.

Factories collapsed. Shops emptied. Supply chains broke.

Ironically, Asians later returned and are today, once again, among the main drivers of Uganda’s commercial and industrial life.

There is a lesson there.

Capital is not created by confiscation.

Entrepreneurial ability cannot be transferred by presidential decree.

"Prosperity cannot be redistributed before somebody creates it...

A generation that never experienced the destruction can afford to romanticise it.

History without memory easily becomes mythology.

None of this gives the NRM a permanent pass.

Forty years later, telling a 25-year-old that things are better than they were in 1986 is not an economic programme.

"Young Ugandans are right to demand the mile.

But they should also understand how we got the inch...

The NRM should not expect eternal gratitude for restoring security and rebuilding the economy. Equally, younger Ugandans should resist the idea that today’s relative stability and abundance simply happened.

They were built.

And they can be destroyed.

The real task now is to preserve the foundations while making sure the prosperity built on them spreads beyond Kampala, beyond the politically connected and beyond the already comfortable.

Because “at least we can sleep” should not be the end of Uganda’s ambition.

But neither should we forget why, once upon a time, being able to sleep was an achievement.

UGANDA TELECOM RACE TIGHTENS

Uganda’s two listed telecom companies turned in strong first-half 2026 results, but beneath the headline growth numbers an increasingly interesting contest is taking shape.

MTN Uganda remains comfortably larger in revenue, customers, profit and dividends. Airtel Uganda, however, grew its underlying operating earnings faster, widened margins and, significantly, generated more data revenue than MTN despite having a smaller overall customer and revenue base.

For the six months to June, MTN reported total revenue of UGX1.888 trillion, 9.7 percent higher than a year earlier, while Airtel’s revenue increased 10.2 percent to UGX1.195 trillion. MTN generated EBITDA of UGX967.5 billion and profit after tax of UGX367.5 billion compared with Airtel’s UGX643.5 billion and UGX224.7 billion respectively.

Financial summary

H1 2026	MTN Uganda	Airtel Uganda
Total revenue	UGX1.888tn	UGX1.195tn
Revenue growth	9.7%	10.2%
EBITDA	UGX967.5bn	UGX643.5bn
EBITDA growth	4.7%	13.4%
EBITDA margin	51.2%	53.9%
Profit after tax	UGX367.5bn	UGX224.7bn
PAT growth	37.7%	13.9%
PAT margin	19.5%	18.8%
Voice revenue	UGX640.4bn	UGX549.5bn
Data revenue	UGX566.8bn	UGX610.6bn
Reported customers	25.4m	19.7m
Capex excluding leases	UGX317.7bn	UGX160.5bn
H1 EPS	UGX16.40	UGX5.60
Annualised H1 EPS	UGX32.80	UGX11.20
Share price, Aug. 26	UGX435.28	UGX171.02
Indicative P/E	13.3x	15.3x
Indicative PEG	0.35	1.10
H1 dividends declared	UGX386.2bn	UGX196bn

MTN reported basic earnings per share of UGX16.40, up from UGX11.90 in H1 2025, while Airtel reported EPS of UGX5.60, against UGX4.90 a year earlier.

For valuation purposes, annualising those half-year earnings gives indicative EPS of UGX32.80 for MTN and UGX11.20 for Airtel. Using their August 26 USE closing prices of UGX435.28 and UGX171.02 respectively gives approximate P/E ratios of 13.3 times for MTN and 15.3 times for Airtel. The share-price data comes from market quotations rather than the companies’ financial statements. (MarketScreener UAE Emirates)

Applying the respective H1 PAT growth rates to those P/E multiples produces indicative PEG ratios of 0.35 for MTN and 1.10 for Airtel. On that simple measure, MTN looks considerably cheaper for the earnings growth being delivered.

But the comparison needs qualification.

MTN’s spectacular 37.7 percent increase in PAT benefited substantially from a 43.1 percent reduction in its tax charge because the comparative period included a once-off transfer-pricing settlement. At the operating level, EBIT increased only 0.2 percent.

That means the 0.35 PEG probably flatters MTN if the current profit growth rate cannot be repeated. Airtel’s 13.9 percent PAT growth was less dramatic but was supported by stronger operating momentum: EBITDA increased 13.4 percent and the EBITDA margin expanded from 52.3 percent to 53.9 percent.

In that sense, MTN looks cheaper on headline valuation, while Airtel’s earnings growth currently looks cleaner.

Airtel wins the data round

Perhaps the biggest surprise in the numbers is data.

Airtel generated UGX610.6 billion in data revenue, up 16.1 percent, compared with MTN’s UGX566.8 billion, up 15.6 percent. Airtel therefore generated about UGX44 billion more from data despite its smaller total revenue base.

Data now represents 51.1 percent of Airtel’s service revenue, up from 48.8 percent a year earlier. Its data customer base grew 18.8 percent to 8.9 million, data usage per customer increased 21 percent and total network data traffic jumped 42.1 percent.

MTN actually reports more active data customers — 12.6 million — but its revenue mix is much broader. Data accounts for about 30.4 percent of service revenue because MTN has another enormous growth engine: fintech.

Fintech revenue increased 10.7 percent to UGX580.6 billion, almost matching data revenue. Active fintech customers increased 11.5 percent to 14.8 million while transaction values surged 26.8 percent to UGX113.3 trillion.

This is arguably MTN’s biggest strategic advantage. Airtel’s Uganda results do not provide a directly comparable mobile-money revenue figure, so the two companies cannot be compared cleanly on fintech from the published numbers.

Margin battle favours Airtel

Another notable divergence is cost efficiency.

MTN’s service revenue rose 9.4 percent but expenses climbed 15.1 percent. EBITDA therefore increased only 4.7 percent and its margin fell from 53.7 percent to 51.2 percent.

Airtel went the other way. Expenses increased only 6.6 percent against revenue growth of 10.2 percent, allowing EBITDA to grow 13.4 percent and margins to expand.

This is why Airtel arguably had the better operating half even though MTN made significantly more money.

Both companies are also spending heavily to protect future growth. MTN invested UGX317.7 billion excluding leases, up 44.6 percent, while Airtel spent UGX160.5 billion, an 82.9 percent increase. MTN raised its 4G population coverage to 93.3 percent and 5G coverage to 25.6 percent.

Airtel rolled out 494 4G sites, 384 5G sites and 1,621 kilometres of fibre and says all its sites are now 4G-enabled. It is also testing direct-to-cell technology with Starlink.

For income investors, MTN remains the heavier cash payer. It declared UGX386.2 billion, equivalent to UGX17.25 per share, in H1 dividends compared with Airtel’s UGX196 billion, or UGX4.90 per share.

So who is ahead?

MTN remains the stronger franchise by scale, absolute profitability, fintech depth and dividend capacity. Airtel currently has the edge in data revenue growth, EBITDA growth and operating-margin momentum.

For investors, the valuation adds another twist. MTN trades at the lower indicative P/E and dramatically lower headline PEG, but part of that advantage comes from a tax-related earnings boost unlikely to recur indefinitely. Airtel is more expensive relative to reported growth, but its improvement is more visibly rooted in operations.

The race is therefore no longer simply about subscriber numbers. Uganda’s next telecom battle will be fought over data consumption, fibre, 5G, home broadband, digital finance and, ultimately, which operator can turn Uganda’s accelerating digital adoption into the highest sustainable return for shareholders.

MUSK, MARKETS AND THE EXPORT TEST

I have just finished Walter Isaacson’s biography of Elon Musk and came away with mixed emotions — awe at what one man has achieved in a lifetime and some horror at the person he appears to have had to become to achieve it.

 Musk is only a few months older than me. That makes the reading uncomfortable.

 Isaacson portrays a man of extraordinary imagination, risk tolerance and focus, but also one who can be abrasive, insensitive and brutally demanding. Employees, friends and even family can become collateral damage to the mission.

 No candidate for beatification here.

 Isaacson, who also wrote the excellent biography of Steve Jobs, has a rare ability to get behind the caricature served up by the media and ferret out what drives his subjects. Yet despite the book running to hundreds of pages, I finished it feeling he had only scratched the surface of Musk’s complicated personality and even more audacious vision.

 Tesla was the announcement

 SpaceX can only be described in superlatives. Reusable rockets have changed the economics of going into space.

 But for me Tesla is what announced Musk to the world as a bona fide genius.

 Starting a new automobile company is close to madness. Cars require huge amounts of capital, complicated supply chains, technology, distribution networks and consumer trust.

 Tesla did not merely survive.

 It made electric cars desirable and forced virtually every major car manufacturer to rethink its future. Then it pushed into batteries, software and autonomous driving. I cannot wait to own a genuinely self-driving car — Tesla or otherwise.

 And then came the ultimate capitalist validation: the market.

 Investors valued Tesla above several of the world’s largest traditional car manufacturers combined.

 You can argue they are wrong. You can argue Tesla is overvalued.

 But they are putting their own money behind that judgement.

 For us free-market adherents, that is the holy grail.

 Yes, government helped

 Tesla’s rise was not a pure free-market fairy tale.

 It benefited from government support, including a $465 million US government loan, which it repaid early. America also protects its industries; Chinese EVs face punitive tariffs in the US market.

 So yes, protectionism and state support are part of the story.

 But there is an important distinction.

 At its best, state support helps a company become strong enough to compete globally. It does not permanently shield it from competition...

 You can provide finance, infrastructure, research support and even temporary protection.

 But eventually the company must leave the nursery and fight.

 The export market is brutal.

 That brutality is useful.

 Then came BYD

 Some will say it is unfair to compare Uganda’s Kiira Motors with Tesla.

 I think the opposite.

 Who exactly are we supposed to compare it with?

 When Kiira sells a bus in Nairobi, Lagos, Dar es Salaam or Johannesburg, the buyer will not lower his expectations because Uganda is a developing country.

 He will compare price, reliability, range, financing, technology and after-sales service against every available alternative.

 And increasingly that means China.

 In fact Tesla may now be the kinder comparison. BYD sold more fully electric vehicles than Tesla in 2025 and is also a major global electric-bus manufacturer.

 That is the market Kiira Motors is entering.

 Like it or not, Tesla and BYD are the competition.

 The import-substitution trap

 This is also why I have always been suspicious of import substitution.

 There is nothing wrong with producing at home what we currently import. The problem starts when import substitution becomes a policy for protecting companies from competition rather than preparing them for it...

 Then the incentives turn upside down.

 Instead of becoming more efficient, the company learns to lobby government. Instead of improving its product, it seeks tariffs, tax breaks, procurement preferences and protection from foreign competitors.

 That is how cronies are created.

 And once protected firms are guaranteed a market, innovation suffers. Why improve quality or lower prices when the customer has nowhere else to go?

 The taxpayer becomes a double loser.

First, billions of shillings can disappear into enterprises that never become commercially viable.

Then the same taxpayer, now acting as a consumer, pays again through higher prices, poorer quality or inferior services because competition has been suppressed...

Export-led growth imposes a much healthier discipline.

The Kenyan, Nigerian or South African buyer does not care who your minister is. He does not care how patriotic your industrial policy sounds.

He wants value.

 

Politicians love inputs

This brings us back to Kiira Motors.

Politicians love inputs.

We allocated billions. We built a factory. We installed a production line. We trained engineers. We made a bus.

Cut ribbon. Take photographs. Mission accomplished.

Except business does not work like that.

The private sector is judged by outputs and outcomes because the market is an unforgiving auditor.

How many buses did you make? How many did you sell? At what margin? Did customers return? Can you export? Can you finance the next production cycle from revenues rather than another government appropriation?

The issue is not whether Ugandans can build buses.

 Obviously we can.

 The issue is whether we can build buses that strangers will buy with their own money.

 That is a completely different test.

 If Kiira can sell hundreds and eventually thousands of buses across Africa against BYD and other manufacturers, government should back it enthusiastically.

 But if after hundreds of billions of shillings we are still mainly celebrating factories, prototypes and government procurement, we should ask whether that capital might produce higher returns elsewhere.

 Musk’s story reinforced something very simple.

 Capitalism does not care about good intentions.

 Eventually somebody who does not have to buy your product must reach into his pocket and pay for it.

Tesla passed that test.

BYD has passed it on an even larger scale.

Kiira Motors must too.

UGANDA'S POWER SECTOR: STRONG FOUNDATIONS, DANGEROUS NEW STRESSES

Uganda’s electricity sector is at an inflection point. For the last two decades, it has been one of the country’s better reform stories. Generation capacity expanded, private capital came in, electricity losses fell, regulation improved, and the country moved away from the crippling shortages that once made load-shedding a normal part of business life.

But the next phase may be harder than the last. The easy story of reform is over. The harder story of expansion, credibility and execution has begun.

Saidi Bukenya, whose company Energy Development in Africa has been involved in developing several private electricity generation projects in Uganda and is now looking at transmission, argues that the public debate may be behind the reality on the ground.

The first issue is generation. The popular assumption has been that with Karuma fully onstream, Uganda has surplus power to spare. But Bukenya warns that this comfort is misplaced...

“We don’t have a surplus,” Bukenya said. “We are not meeting our demand.”

That is a sobering claim. For years, the fear was that Uganda had built too much generation ahead of demand. Now the warning from inside the sector is that demand, especially from industry and growing domestic consumption, is already eating into available supply. Infrastructure behaves like this. A road creates traffic. A trading centre creates shops. Electricity lines create factories, welders, cold rooms, agro-processors and households that begin to consume power in ways planners often underestimate.

This means Uganda cannot wait for a crisis before planning the next generation projects. Power plants take years to prepare, finance, procure and build. By the time the public notices shortages, it is already too late. The decision to slow down large generation because of fears of excess capacity may have looked prudent at one point, but development has a way of consuming yesterday’s surplus.

“What we need is one or two big generation projects, not the small ones,” Bukenya said.

In his view, Uganda now needs sizeable generation projects of about 500 MW to 600 MW if the country is to stay ahead of demand. This does not mean Uganda should build recklessly. The Bujagali and Karuma experiences show that generation choices are politically, financially and technically complex. Private capital can be expensive, but public debt is not free either. Government-built projects may offer more control, but they add pressure to the national balance sheet. Privately financed projects require returns that reflect risk, but they also move part of the burden away from the taxpayer.

The second issue is transmission. Generation without transmission is stranded value. Uganda needs to move power from where it is generated to where it is consumed, and that requires heavy investment in lines, substations and grid stability. This is where the old assumption that transmission must remain a purely government activity is beginning to look outdated.

“Government needs $3b to $5b in investment in transmission; surely they cannot borrow all that money,” Bukenya said.

This is the heart of the matter. Uganda’s power ambitions now exceed what the public balance sheet can comfortably carry. The government can continue to own and regulate the backbone of the system, but it may have to accept more private participation in transmission if the grid is to expand at the speed required by industrialisation.

The case for private transmission is not ideological. It is practical. Private developers can sometimes move faster than public procurement systems, raise long-term capital, accept performance obligations and reduce the delays that have become so costly in public infrastructure. The challenge is to design contracts that are transparent, fairly priced and firmly regulated.

The third issue is distribution after Umeme. Whatever one thinks of Umeme politically, the concession solved real sector problems. It reduced losses, improved collections, attracted investment and helped make the electricity value chain more bankable. Its exit has brought distribution back into government hands through UEDCL.

Bukenya gives UEDCL some credit. He says the new public distributor appears to be collecting revenue well and may be more responsive in some areas. But he also raises concerns over technical losses, the speed of new investment and delayed remittances to the transmission utility.

That last point is critical. Electricity is a chain. If the distributor collects but delays remitting to transmission, transmission delays payments to generators, and generators begin to worry about the bankability of the sector. Investor confidence is not built by speeches. It is built by invoices paid on time.

The fourth issue is regulation, where Uganda still has a major advantage. Uganda’s electricity regulator is one of the strongest on the continent, credited with predictability and professionalism. This matters because electricity investors do not only look at demand. They look at rules, tariff predictability, payment discipline and whether contracts survive political pressure.

But even strong regulation will be tested by the politics of cheap power. The ambition to lower tariffs for manufacturers is understandable. Uganda cannot industrialise on expensive electricity. But tariffs must fall because of better planning, lower losses, cheaper finance, higher demand density and efficient procurement — not because the government wishes them down. Artificially cheap power eventually becomes expensive power, paid through arrears, subsidies, shortages or underinvestment.

Uganda’s power sector is therefore not in crisis, but it is entering a danger zone. Its foundations are stronger than those of many African markets. Demand exists. Regulation is credible. Private capital is interested. But the sector now needs speed, honesty and discipline: speed in generation and transmission planning, honesty about the end of the surplus narrative, and discipline in collections, remittances and tariffs.

The next electricity story will not be about escaping darkness. It will be about whether Uganda can build a power system big, reliable and affordable enough to carry industrialisation. That is a much harder assignment.

STANBIC'S PROFIT MACHINE SHIFTS UP A GEAR

Stanbic Uganda Holdings Limited (SUHL) posted a 28.2% increase in profit after tax to UShs357 billion for the six months to June 2026, from UShs278.4 billion in the corresponding period last year, powered by strong growth in both interest and non-interest income and a turnaround in credit impairment charges.

The numbers suggest that Uganda’s largest financial services group is getting more earnings out of a rapidly expanding balance sheet while keeping costs from rising as quickly as revenues.

Total income before credit impairments rose 21.2% to UShs830.3 billion, compared with UShs685.2 billion a year earlier. Net interest income increased 16.7% to UShs433.6 billion, supported by balance-sheet growth, while non-interest revenue jumped 26.4% to UShs396.6 billion, driven mainly by trading income.

Management said revenues grew 21.2% against a 14% increase in costs, producing positive jaws of 7.2 percentage points. Non-interest revenue now contributes 47.8% of total revenue, up from 45.8% a year earlier, pointing to a more diversified earnings base.

Another significant lift came from credit impairments. SUHL recorded a UShs14.6 billion net impairment release, compared with a UShs7.3 billion charge in H1 2025. Management attributed this to continued improvement in the asset book and recoveries on loans previously written off.

That swing of almost UShs22 billion helped profit before tax rise 34.3% to UShs477.1 billion.

The stronger earnings also translated into improved returns. Return on average equity climbed to 30.4% from 26.9%, while the cost-to-income ratio improved to 44.3% from 47.1%. The credit loss ratio moved to negative 0.5% from 0.2%, although non-performing loans edged up slightly to 1.5% from 1.3%.

Stanbic H1 financials (all in Ugshs) at a glance

Indicator	H1 2026	H1 2025	Change
Profit after tax	356.8bn	278.4bn	+28.2%
Profit before tax	477.1bn	355.2bn	+34.3%
Total income	830.3bn	685.2bn	+21.2%
Net interest income	433.6bn	371.5bn	+16.7%
Non-interest revenue	396.6bn	313.7bn	+26.4%
Customer loans	5.35tn	4.94tn	+8.2%
Customer deposits	9.24tn	8.44tn	+9.4%
Total assets	13.43tn	11.80tn	+13.9%
Shareholders’ equity	2.51tn	2.18tn	+15.3%
ROE	30.4%	26.9%	+3.5pp

The balance sheet continued to bulk up. Total assets increased 13.9% to UShs13.4 trillion, customer deposits grew 9.4% to UShs9.2 trillion and net customer loans rose 8.2% to UShs5.35 trillion. Shareholders’ equity increased 15.3% to UShs2.51 trillion.

And shareholders are getting a bigger slice of the action.

The board approved an interim dividend of UShs220 billion, equivalent to UShs4.30 per share, subject to regulatory approval. This compares with an interim dividend provision of UShs140 billion at the same stage last year—an increase of 57.1%.
The dividend is therefore growing roughly twice as fast as profits. The proposed payout amounts to about 62% of first-half earnings, compared with about 50% in H1 2025.

For shareholders, that is perhaps the most interesting number of all: Stanbic is not only making substantially more money; it is increasingly passing that money through to its owners while still growing deposits, lending, assets and capital.

That is a profit machine shifting up a gear.

UGANDA CAN’T BUILD A $500B ECONOMY ONE PLOT AT A TIME

For decades, Uganda’s housing strategy has been simple: leave it to the individual.

A Ugandan buys a 50-by-100-foot plot beyond the city and builds slowly. First the foundation, then the walls. The roof may come two years later. Windows and doors follow when other obligations allow.

This model has produced millions of homes. But individual development has reached its limit and is failing to keep pace with urbanisation.

That came into focus during a post-budget dialogue on decent housing hosted by the Uganda Society of Architects. Participants asked whether the national budget and Uganda’s institutions are responding adequately.

The numbers suggest they are not.

"Uganda’s urban population is growing by more than five percent annually. The industry delivers about 60,000 housing units a year against estimated demand of 344,000...

 The country already has a housing deficit of about 2.4 million units, projected to rise to 4.5 million by 2035.

No number of individuals laying one brick at a time can keep pace.

The market worked—up to a point

This column has argued that government’s dismal of some people’s clamouring for rent controls was coreect.

Capping rents and restricting advances would have discouraged investment. Less investment would reduce rental supply and eventually push rents higher—the opposite of what the regulations intended.

As private investment increased, landlords who once demanded a year’s rent in advance began accepting six months, three months and, in some places, one month. Competition was improving the terms.

Dollar rents and punitive advances were symptoms of scarcity. Where demand exceeded supply, landlords held all the cards. Increase supply and power shifts towards tenants.

That logic remains valid. But markets regulate prices only when supply can respond.

Uganda’s individual builder has run into expensive land, costly infrastructure, high taxes, uncertain tenure, short-term finance and fragmented planning.

The next phase of urbanisation cannot be built one plot at a time.

The five-dollar opportunity

This is not only a social challenge. It is a major economic opportunity.

Government wants to grow Uganda’s economy tenfold to about $500 billion by 2040. Real estate should be one of the principal engines of that ambition.

Using the sector’s commonly cited multiplier, every dollar invested in real estate can generate about five dollars in wider economic activity.

A housing project employs professionals, artisans and labourers. It buys local materials and creates business for transporters, banks, insurers, hardware shops and furniture makers. Once occupied, it generates demand for utilities, schools, retail and transport.

"Housing construction has a high employment multiplier, uses substantial domestic materials and can mobilise household savings into long-term productive investment...

Housing is not merely where people sleep. It is an economic production line.

Government has made housing expensive

Government cannot demand affordable housing while making development unaffordable.

Roads, drainage, electricity, water, sewerage and other public goods can account for about 40 percent of development costs. Yet developers are expected to provide them and recover the expense from buyers or tenants.

Residential developers also pay 18 percent VAT on building materials. Because residential sales are generally exempt, that input VAT is not recoverable and becomes a permanent cost.

On sh100 million worth of taxable materials, sh18 million is added before land, finance, labour, professional fees and profit.

Government then wonders why developers build for the wealthy.

About 76 percent of Ugandans can afford homes valued at only sh12 million to sh24 million, while a formal starter house costs about sh150 million. An estimated 96 percent cannot afford the cheapest standard house produced by formal developers.

That is not merely an affordability gap. It is a market-design failure.

A private house, a communal asset

"Housing must stop being treated as merely a private responsibility.

It is a public obligation, an economic necessity and increasingly a security and safety issue...

Unplanned urbanisation produces flooding, congestion, crime and unsafe settlements. Factories appear next to homes. Roads and drainage arrive only after thousands have settled.

The house may be privately owned, but much of its value is communal. It comes from roads, drainage, sewerage, electricity, schools, security and orderly land use.

Uganda needs more housing cooperatives, condominiums, land pooling and public land banking. Neighbouring landowners should combine plots rather than develop independently.

Zoning must also be enforced. Productive cities cannot emerge where factories, schools, warehouses and residences are mixed without regard to safety or infrastructure.

Government must become a participant

Government must move beyond being a catalytic agent.

It should become a direct participant—not necessarily by laying every brick, but by assembling land, installing infrastructure, supplying patient capital, guaranteeing projects and partnering with institutional developers.

Resolving the uncertainty around Libya’s shareholding in National Housing and Construction Corporation is central to this shift. The dispute has constrained government’s ability to recapitalise NHCC and use it as a national housing-delivery vehicle.

Once resolved, NHCC should develop serviced land, rental housing, apartments and affordable units in the tens of thousands, not a few hundred expensive houses.

There are encouraging signs. Government has capitalised Uganda Development Bank by about sh1.6 trillion over five years and earmarked another sh440 billion, some of which is expected to support real estate developers.

But the scale must be greater.

Uganda’s commercial banks cannot finance this transformation alone. A single development may require sh80 billion, forcing banks to syndicate.

The country needs housing bonds, mortgage refinancing, pension-fund participation and specialised long-term finance.

"Tax relief should expand supply rather than subsidise individual buyers. Government can service land, reduce taxes on affordable-housing inputs and support developers capable of producing thousands of units.

The Uganda Society of Architects’ post-budget dialogue was about whether Uganda understands that real estate is also a growth, productivity, safety and national-development issue.

To build a $500 billion economy, Uganda must start building at institutional scale.