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.

MTN UGANDA H1 PROFIT JUMPS 38 PCT TO SHS367.5b

MTN Uganda’s profit after tax jumped 37.7 percent to Shs367.5 billion in the first half of 2026, from Shs267.0 billion in the corresponding period last year, helped by growth in data and mobile money revenues and a significantly lower tax charge.

Total revenue increased 9.7 percent to Shs1.89 trillion from Shs1.72 trillion, while service revenue grew 9.4 percent to Shs1.87 trillion. Data revenue rose 15.6 percent to Shs566.8 billion and fintech revenue increased 10.7 percent to Shs580.6 billion. Voice revenue grew more modestly, up 1.8 percent to Shs640.4 billion.

“MTN Uganda delivered a solid performance in the first half of 2026, with improving momentum in the second quarter, as the business recovered from the disruptions experienced earlier in the year,” MTN Uganda Chief Executive Officer Sylvia Mulinge said.

MTN Uganda H1 financial summary

Financial indicator	H1 2026	H1 2025	Change
Total revenue	Shs1.888tn	Shs1.722tn	+9.7%
Service revenue	Shs1.866tn	Shs1.705tn	+9.4%
Data revenue	Shs566.8bn	Shs490.2bn	+15.6%
Voice revenue	Shs640.4bn	Shs629.0bn	+1.8%
Fintech revenue	Shs580.6bn	Shs524.6bn	+10.7%
EBITDA	Shs967.5bn	Shs924.2bn	+4.7%
EBITDA margin	51.2%	53.7%	-2.5pp
Profit before tax	Shs525.1bn	Shs543.8bn	-3.4%
Profit after tax	Shs367.5bn	Shs267.0bn	+37.7%
PAT margin	19.5%	15.5%	+4.0pp
Capex	Shs455.1bn	Shs279.7bn	+62.7%
Earnings per share	Shs16.4	Shs11.9	+37.8%

MTN’s EBITDA grew 4.7 percent to Shs967.5 billion, although its EBITDA margin narrowed to 51.2 percent from 53.7 percent as total expenses increased 15.1 percent. The margin nevertheless remained above the company’s medium-term target of 50 percent.

The strong PAT growth came despite profit before tax declining 3.4 percent to Shs525.1 billion from Shs543.8 billion. MTN said its tax charge fell 43.1 percent, reflecting the effect of a one-off transfer-pricing settlement in the previous year. The lower tax expense helped lift the net profit margin to 19.5 percent from 15.5 percent.

The company continued to benefit from increased use of data and digital financial services. Its overall subscriber base rose 11.2 percent to 25.4 million, while active data subscribers increased 16.3 percent to 12.6 million and fintech users grew 11.5 percent to 14.8 million.

Mobile money transaction volumes increased 9.5 percent to 2.6 billion transactions, while their value jumped 26.8 percent to Shs113.3 trillion. MTN's fintech agent network grew 23.8 percent to 270,500.

Investment also accelerated sharply during the period. Capital expenditure increased 62.7 percent to Shs455.1 billion, while capex excluding leases rose 44.6 percent to Shs317.7 billion. MTN deployed 224 network sites, increasing 4G population coverage to 93.3 percent from 88.2 percent and 5G coverage to 25.6 percent from 19 percent.

Shs8.75 dividend declared

The stronger earnings will translate into another payout to shareholders. MTN Uganda’s board declared a Q2 2026 interim dividend of Shs8.75 per share, equivalent to Shs195.9 billion.

The latest declaration takes total dividends for the first half of 2026 to Shs17.25 per share, or Shs386.2 billion. MTN said the payout reflected the strength of its earnings, cash generation and balance sheet.

The book closure date is September 1, 2026, while the dividend will be paid on Friday, September 18, 2026, subject to withholding tax. Payments will be transferred electronically to shareholders’ bank accounts or mobile money wallets.

Looking ahead, MTN maintained its medium-term guidance for upper-teen service revenue growth, EBITDA margins above 50 percent and capex intensity in the mid-teens as it continues investing in network capacity and expanding its fintech business.

ITS NOT THE ECONOMY, ITS LACK OF HOSPITALITY

BOOK REVIEW: UNREASONABLE HOSPITALITY: THE REMARKABLE POWER OF GIVING PEOPLE MORE THAN THEY EXPECT

Author: Will Guidara                    

                

Years ago, I walked into a restaurant and ordered a meal.

The waitress took my order and disappeared. Twenty minutes later, there was no food. Another waiter assured me it was coming. Fifteen minutes later, the original waitress returned and explained, without irony, that the person responsible for making my dish had gone somewhere.

Apparently, in a restaurant full of waiters, cooks and supervisors, only one human being had been authorised by the gods to make a grilled chicken breast.

I left without eating.

The owner probably went home and complained that business was slow because the economy was bad.

This is one of our favourite explanations for poor business performance. Customers have no money. Taxes are too high. Government is not helping. Interest rates are punishing.

All may be true. But sometimes it is not the economy that is wanting. It is your customer service.

This is the central lesson I took from Will Guidara’s Unreasonable Hospitality

. Guidara built his career in New York’s restaurant industry, but this is not really a book about restaurants. It is about business, leadership and making people feel seen...

You may run a bank, clinic, garage, supermarket, law firm, school or government office. The product may change, but the question remains: how do people feel after dealing with you?

Guidara’s restaurant sought greatness not simply by serving good food, but by creating a culture of connection, graciousness and belonging. The aim was to make employees and customers feel valued.

When products are similar and prices easily compared, customer experience becomes a competitive advantage. Customers may forget the interest rate you quoted or the flavour of the sauce. They will remember how your organisation made them feel...

Ugandan businesses frequently invest heavily in appearances and poorly in experience.

We import furniture, install shiny tiles and dress staff in smart uniforms. Then the receptionist scrolls through her phone while a customer waits. Calls go unanswered. Complaints are treated as acts of aggression.

Guidara distinguishes between luxury and hospitality. Luxury means giving people more. Hospitality means being more thoughtful.

A roadside restaurant can therefore offer better hospitality than an expensive hotel. It may remember your name and prepare your food the way you like it. The hotel may have chandeliers and a receptionist trained to avoid eye contact.

It is answering the phone, keeping a promise and explaining a delay before the customer asks. It is noticing that an elderly client should not stand in a queue. It is empowering an employee to solve a small problem without seeking permission from seven supervisors.

One of the book’s most useful ideas is Guidara’s test for organisational rules: does the rule bring the business closer to connecting with people, or take it further away?

Many rules are designed for the institution’s convenience, not the customer’s.

The customer must photocopy a document already in the company’s system. The client travels across town to sign a form that could have been emailed. The cashier cannot correct a mistake because the supervisor is at lunch.

Every employee may have followed procedure. The customer has still been lost.

Guidara does not argue that hospitality should replace commercial discipline. He insists on understanding the business, setting standards and holding people accountable.

His formula is memorable: manage 95 percent of the business carefully, then use the remaining five percent to do something memorable.

That five percent is not permission to waste money. It creates room for initiative—to surprise a customer, solve a problem or turn an ordinary transaction into a story the customer will repeat.

A delighted customer brings friends.

The book also contains a lesson many businesses resist: the customer’s perception is the organisation’s reality...

When customers complain, our instinct is to defend ourselves. We explain that the system was down, the supplier delayed or the manager was unavailable.

These explanations may be accurate. They do not change the customer’s experience.

Guidara observes that people often want to be heard more than agreed with. Saying sorry is not necessarily an admission of fault. It acknowledges a poor experience.

Unreasonable Hospitality is not perfect. Many examples come from elite New York restaurants, far removed from the average Ugandan business. Some gestures are difficult to reproduce.

But the principles travel well.

Pay attention. Train your people. Listen. Keep your promises. Sweat the small details. Give employees authority to solve problems.

The Ugandan economy will never be perfect. Taxes will remain a complaint. Customers will want lower prices. Competition will intensify.

But even in a difficult economy, money continues to change hands.

The question is whether it will change hands in your business.

UGANDA'S PEARL BANK AT ONE: NOW COMES THE REAL WORK

A year ago, PostBank became Pearl Bank.

For many, it was a branding event. New name. New colours. New signage.

But in Uganda’s banking history, the consumer usually notices change before the policy people do.

There was a time when banking was what happened before lunch. Then Greenland Bank opened beyond lunchtime and on Saturdays. Suddenly, the customer mattered.

Then came the ATM. Online banking moved the branch from the high street to the desktop and later to the phone. Then mobile money arrived and blew up the old assumptions altogether.

Electronic money transactions in Uganda rose 28 percent from sh285.9 trillion in 2024 to sh366 trillion in 2025. Uganda’s nominal GDP is about sh250.4 trillion. In other words, more money now moves through digital rails than the economy produces in a year.

That is the world into which Pearl Bank has been reborn.

"The question is not whether Pearl Bank can become a good bank. The question is whether it can become a strategic bank...

I say this as someone instinctively sceptical of government-owned enterprises. No surprise there. I cut my teeth as a business reporter covering privatisation in the 1990s. We saw what political interference, weak governance, overstaffing and patronage did to state enterprises. By the time many were sold, they were not companies so much as carcasses.

And yet one must be intellectually honest.

Pearl Bank’s numbers suggest government ownership need not automatically mean failure. Last year profit after tax rose 34 percent to sh47.3b. Assets grew 31 percent to sh1.87 trillion. Customer deposits rose 43 percent to sh1.42 trillion. Wendi wallet balances jumped from sh45.5b to sh240.5b, a fivefold surge.

These are not small numbers. They show an institution whose balance sheet is becoming capable of carrying a bigger national assignment.

The trick now is to keep the sharks at bay.

Every successful public institution attracts interests that want to turn it into a feeding trough. The defence is governance: strong board, professional management, disclosure, regulatory vigilance, clear targets and no sacred cows.

This is where Uganda can learn from Asia.

In How Asia Works

, Joe Studwell shows how Japan, South Korea and Taiwan used finance as a tool of national transformation. Japan did not have to own every bank. It incentivised and disciplined banks to support long-term national strategy: build productive capacity, raise exports and earn foreign exchange. Credit was pushed towards national capability...

Uganda needs that discipline.

Pearl Bank can be the tip of the spear in supporting the government’s broader ATMS agenda — agro-industrialisation, tourism development, mineral development, and science, technology and innovation.

But ambition requires capital.

Government can inject capital, but the more interesting possibility is listing Pearl Bank on the Uganda Securities Exchange.

Bank of Baroda had listed before Stanbic, but Stanbic’s listing was a watershed because it allowed ordinary Ugandans to participate in the growth of a bank, not merely queue in one. Stanbic listed at sh70 a share in 2007. Today it trades around sh80. But after bonus issues that effectively multiplied the original holding about ten times, one old sh70 share is worth roughly sh800 before dividends.

Pearl Bank can do the same with an even more national mission. A listing would raise long-term capital, widen ownership and impose market discipline.

Then there is Wendi.

This may yet prove to be Pearl Bank’s most important strategic asset because it sits directly in the mobile money growth trajectory.

Mobile money started as a convenience. Send money home. Pay someone quickly. Avoid the bus park courier. Then it became a payments platform: school fees, utilities, taxes, merchant payments, savings, credit, group collections and cross-border flows.

In less than two decades, the phone has become Uganda’s most important financial access point.

That is the opportunity Wendi must ride.

Wendi is not just another wallet trying to imitate telecom-led mobile money. Properly positioned, it can become the bridge between the velocity of mobile money and the balance sheet strength of a regulated bank.

Mobile money has proved that Ugandans will transact digitally at scale. What remains is to convert that behaviour into savings, credit histories, investable deposits and productive finance. Wendi already has about two million users and wallet balances of sh240.5b. Add more than 13,000 Wendi agents, 59 ATMs, 59 branches and 14 mobile vans, and the possibility becomes clearer...

If Pearl Bank can capture even a small share of the sh366 trillion now moving annually through electronic money rails, retain part of it as savings and intermediate it prudently, it can create a low-cost funding pool for farmers, traders, tourism operators, mineral service providers, innovators and SMEs.

That is how a wallet becomes a development tool.

One year after the rebrand, Pearl Bank deserves to celebrate. But not for too long.

The first year was about identity. The next phase must be about scale, discipline and national impact.

Uganda does not need Pearl Bank merely to be another profitable bank. It needs Pearl Bank to prove that a government-owned financial institution can be commercially disciplined, digitally ambitious, well governed and developmentally useful.

If it can do that, the rebrand will be remembered as the moment Uganda began to build a financial spearhead for its next phase of transformation.

WHEN PUBLIC SERVICE BECOMES A LIFETIME CLAIM ON THE TAXPAYER

Former Members of Parliament have apparently discovered that life after Parliament can be a rude awakening.

The phone stops ringing as often. At public functions, nobody is scrambling to find them a front-row seat. They may even have to queue like “mere mortals”, the people whose laws they once passed.

This, according to reports, has become a national emergency.

The Association of Parliamentary Alumni of Uganda is asking for formal identification cards, official recognition and monthly allowances of between sh10m and sh15m. Former MPs argue that they are sometimes disrespected in public and should enjoy benefits comparable to those provided to former presidents, Speakers and judges.

The association says the proposed arrangement would be contributory. It is not asking for houses, vehicles or domestic workers.

How restrained.

To be fair, there may be a legitimate discussion about retirement arrangements for MPs who served before the present parliamentary pension scheme was established. If some legislators served for years under a system that made no provision for their old age, there is room to examine the matter.

"But sh10m to sh15m a month is not a retirement discussion.

It is an entitlement discussion...

Assuming only 500 former MPs qualified, the scheme would cost between sh60b and sh90b every year. If 800 former legislators qualified, the annual bill would rise to between sh96b and sh144b.

That is before administration, medical benefits and the inevitable demand to increase the allowance whenever inflation bites or serving MPs review their own pay.

And we know how these things work. A scheme begins as “contributory,” develops a funding gap and eventually turns up at the Treasury asking for a bailout. What starts as recognition becomes a permanent charge on taxpayers who were never invited to the meeting at which the benefit was designed.

The average Ugandan approaching retirement is told to rely on savings, children, a small garden, a SACCO or whatever remains of the family business. He is reminded that government cannot provide pensions for everybody.

The former MP, however, wants sh15m every month, an identity card and official recognition to protect him from the indignity of being treated like an ordinary citizen.

You cannot make this stuff up.

Ugandans are already carrying a heavy public wage bill, rising debt-service costs, domestic arrears and endless demands from schools, hospitals, roads and local governments. Every department says it is underfunded. Every district has an unfinished health centre. Every ministry has unpaid suppliers.

Into this situation walks the former MP, asking the taxpayer to maintain the lifestyle and status that came with an elective office that has expired.

This column warned in 2019 that Uganda was headed down a slippery slope. The danger begins when leadership stops being understood as temporary public service and starts being treated as membership of a permanent privileged class.

Once elected or appointed to high office, the official begins to believe that the public owes him not only a salary while he serves, but security, medical care, transport, housing and allowances long after he has left.

Public office becomes less of a duty and more of an investment product.

You put in five years and expect a lifetime annuity.

"This is how extractive institutions are built. They do not emerge overnight. They grow allowance by allowance, privilege by privilege and exemption by exemption...

Drawing on the lessons of Why Nations Fail, inclusive institutions distribute opportunity widely and encourage citizens to work, invest and create. Extractive institutions organise the state around transferring resources to those with access to political power.

The elite redesign government around themselves. They receive subsidised vehicles, generous medical insurance, travel allowances, sitting allowances, fuel allowances, retirement packages and special access to public facilities.

The ordinary citizen is given a speech about hard work.

This is why the proposal has attracted so much anger online. Many Ugandans have asked why former MPs cannot live off their savings, investments or businesses. Others suggest that they join the Parish Development Model, Emyooga or the other wealth-creation programmes Parliament has approved for ordinary people.

That sarcasm is not entirely misplaced.

MPs are the best-paid public officials in the country. Their positions provide access to networks, information, influence and business opportunities unavailable to most citizens.

"If, after five or ten years in that privileged position, a former MP cannot secure his financial future, what does that say about the financial advice Parliament has been giving the rest of us?

Perhaps former MPs need an Unco Money seminar.

The case for special recognition is equally shaky.

Respect cannot be legislated. An identity card may get a former MP through a security checkpoint, but it cannot force the public to admire him. Respect is earned by what one did with the opportunity to serve.

Some MPs will be remembered for defending the public interest and speaking when silence would have been safer. Others will be remembered for sleeping through debates, rubber-stamping waste and appearing in their constituencies shortly before elections.

The public is entitled to distinguish between the two.

Former MPs argue that their experience remains valuable. That may be true. They can advise political parties, mentor younger leaders, teach, write, join corporate boards, work in civil society or conduct civic education.

If their knowledge is useful, society will find a place for it. A former title is not proof of continuing usefulness...

There is also a dangerous assumption that retirement must preserve the lifestyle of office. It does not. Retirement requires adjustment. Income falls. Consumption must follow. The suit may remain, but the constituency allowance goes.

A sensible solution would be a properly funded contributory pension scheme for serving MPs. Members should set aside a meaningful portion of their generous earnings while in office. Those who served before the current pension arrangements may receive modest, targeted support, particularly for healthcare and genuine hardship.

But Uganda should resist another open-ended welfare scheme for the political class.

The country does not suffer from a shortage of former leaders. It suffers from poor public services, low household incomes and insufficient investment in the things that would make ordinary citizens more productive.

Public service should be honoured.

But it should not become a lifetime invoice sent to the public.