UMEME’S PAYDAY AND THE MONTH THE MARKET WOKE UP

If there was a single spark that lit up the Uganda Securities Exchange (USE) in July, it was Umeme’s long-awaited dividend. After months in the regulatory shadows, the utility’s return to active trading — and with a payout in hand — turned what might have been a sleepy month into one of the most animated trading stretches this year.

Investors piled in. By the time the month was done, turnover had nearly doubled from June to UGX 10.78 billion. Almost half of that was Umeme alone, the other half largely swallowed up by MTN Uganda, which was riding a different kind of news — the planned structural separation of its mobile money arm. Between the two, they accounted for a staggering 96.7 percent of market turnover. It was as if the rest of the market existed mostly to keep the ticker moving.

The mood was helped along by a macroeconomic backdrop that, while far from perfect, was reassuring enough for investors to take positions.

 Inflation eased to 4.1 percent, the shilling stayed firm with a 2.61 percent year-to-date gain against the dollar, and Treasury yields slid across most maturities. Even the slightly softer Purchasing Managers Index reading of 53.6 — down from June’s 55.6 — still marked the sixth month of private sector expansion.

But back on the trading floor, it was all about liquidity and where it was flowing. 

Volumes traded jumped 70 percent to 44.3 million shares, the number of deals leapt 38 percent, and the All Share Index was up 5.43 percent, fuelled by strong gains in EABL, QCIL, BOBU, NMG and KA. There were losers too — UCL, MTN, NIC and Centum — but their declines barely dented the overall market lift.

Fixed income traders were quietly active as well, with government bond yields easing at the short and medium end of the curve. Three-year paper dropped to 15.50 percent, and the five-year slipped to 16.13 percent, as inflation expectations settled.

Beyond the numbers, the month carried the sense of a market still too dependent on a handful of big names to keep the scoreboard respectable. Blue chips like Umeme and MTN can stir up liquidity, but they also expose the market’s narrowness — if they sneeze, turnover catches a cold.

For July, though, investors who backed Umeme walked away smiling, dividend in hand, capital gains in pocket, and the satisfaction of seeing the counter back in play. In a market where patience is often stretched thin, that’s a reminder of why long-term holders keep faith. For the rest, it’s another signal that while the USE can spring to life on the back of a big corporate event, it will need a broader base of active counters if the current optimism is to survive the next dry spell.

THE QUIET RISE OF THE UGANDAN RETAIL INVESTOR

It’s not the sort of headline that makes the front page, but it should.

The Uganda Securities Exchange (USE) recently reported the rise in retail investor participation. In the first half of this year,

Ugandan individuals accounted for 23 percent of market turnover, up from a paltry five percent just a year ago.

Local companies have followed suit, now contributing 28 percent, nearly double last year’s share. In a market long dominated by foreign institutional investors, this is no small shift—and it’s more than just a feel-good statistic.

Local participation matters because it helps smooth out market volatility.

Foreign investors, valuable as they are for depth and liquidity, tend to head for the hills at the first whiff of trouble—whether it’s a wayward post on X, a traffic jam on Entebbe Road, or the perennial jitters of election season. Ugandan investors, by contrast, tend to hold on through the noise, driven by long-term opportunity and better understanding of the local risk, rather than the day’s headlines. And for many, participation in the local capital markets is proving one of the quickest ways to start climbing the asset ladder.

It’s a story Jack could have told us years ago.

He decided early on that he didn’t have the time—or frankly the patience for a side hustle. His job didn’t allow afternoons at the farm, haggling in the market, or chasing after errant boda riders to pay back a “loan.” Instead, he began quietly accumulating shares on the USE. Sometimes with salary loans, other times through disciplined monthly purchases, he kept at it for two decades.

Today, his portfolio has delivered double-digit returns in most years, whether in dividend yields or price appreciation. Over time, he’s added bonds, private equity in a handful of SMEs, and even some forex exposure. But the lion’s share of his wealth sits in USE-listed companies. His route to financial independence is not only legitimate, it’s public and open to anyone willing to try.

Jack’s conviction is showing up in the broader numbers.

The USE All Share Index (ALSI) rose 25.14 percent in the first half of 2025, while the Local Company Index (LCI) surged 30.42 percent, lifted by blue-chip counters like MTN Uganda, Umeme, Stanbic, QCIL, and Bank of Baroda.

Market capitalisation climbed nearly 28.5 percent to sh28 trillion ($7.5b). Trading volumes jumped 68.6 percent to 446.7 million shares, even if turnover only crept up 0.49 percent to sh38.4 billion.

The bond market is also finding its feet.

The alternative bond trading platform saw sh34.23 billion in trades up  

three fold, with nearly half of that in secondary activity. Even the commodities exchange, still small, has signed up over 6,000 farmers and traded 16 metric tonnes, showing ambition to link agriculture with capital markets...

Part of this momentum comes from reforms by the Capital Markets Authority (CMA).

The new Regulatory Sandbox Guidelines give innovators space to test capital-raising products under CMA supervision—potentially unlocking funding for SMEs and key sectors like manufacturing and tourism. Updated Collective Investment Scheme regulations now govern an industry managing sh4.6 trillion, while the proposed CIS Compensation Fund will give retail investors an extra safety net.

Perhaps the most practical development for the average investor is the launch of the Capital Markets Handbook. For years, the USE and CMA have struggled against a knowledge gap—too many Ugandans simply don’t know how to start, what to buy, or how to measure progress. The handbook addresses that, part textbook, part rights manual, part how-to guide for navigating Uganda’s capital markets.

Not everything is perfect. Turnover remains concentrated—MTN alone accounted for 59 percent of trading in H1 2025. And events like Umeme’s planned exit or MTN’s restructuring of its mobile money business could shake confidence if not handled well. The CMA’s close monitoring of these issues is reassuring, but concentration risk remains a structural hurdle.

Still, for the growing band of retail investors, these are good problems to have—problems of scale, growth, and maturity. Jack will tell you the hardest part of investing isn’t picking the right shares, it’s sticking to the plan when everyone else is chasing the next quick return.

Jack’s story is no fluke. It’s part of a quiet revolution. Ugandans shifting from consumption to ownership, from cash under the mattress to equity in productive enterprises.

MTN H1: A TAX BIT IN OTHERWISE HEALTHY MEAL

There’s an old Kampala saying that when you kill a chicken for lunch, you don’t complain about the feathers – they come with the territory. 

MTN Uganda’s H1 2025 results carry that same flavour. On the plate, the company served up solid revenue growth, fatter margins, and stronger cash flows. But on the side was an unavoidable helping of feathers – a Ush 110.9 billion tax settlement with the Uganda Revenue Authority that shaved nearly 10 percent off the bottom line.

Strip out that once-off tax bite, and the picture changes entirely. Adjusted profit after tax jumped 27.8 percent to Ush 377.9 billion, showing that the core engine is humming smoothly. Service revenue grew 13.3 percent to Ush 1.71 trillion, and the mix keeps shifting away from old-school voice towards the higher-growth data and fintech segments. Data revenue surged 31.3 percent on the back of affordable bundles, device financing schemes, and aggressive 4G/5G rollout. Fintech – mostly MoMo – grew 18.6 percent, as transaction values hit Ush 89.3 trillion, pushing its share of service revenue to just over 30 percent.

"Voice, once the bread and butter, is now the side dish – still the single biggest contributor at 36.9 percent of service revenue, but with growth stuck at 0.4 percent  thanks to lower mobile termination rates. The real story is in data traffic, up 42.6 percent, and in fintech’s growing menu of advanced services like MoMo Advance and the Virtual Card partnership with Mastercard.

Costs? Contained. EBITDA rose 17.8 percent to Ush 924.2 billion, with the margin swelling to 53.7 percent – helped by an Expense Efficiency Program that saved Ush 39.3 billion and a calm inflation backdrop. Net debt is down 12.7 percent to Ush 1.3 trillion, leverage is a comfortable 0.7x EBITDA, and capex spending held steady, focused on densifying the network, extending fibre, and expanding population coverage to 88.2 percent for 4G and 19 percent for 5G.

"Shareholders are being rewarded with a Ush 10.0 per share interim dividend – Ush 223.9 billion in total – to be paid in September. And there’s a strategic kicker: shareholders have approved the structural separation of the fintech arm, MTN Mobile Money (U) Limited, which could unlock fresh value once regulators sign off.

For the second half, MTN still aims for “upper-teens” service revenue growth, EBITDA margins above 50 percent, and capex intensity in the low teens. Risks remain – the US dollar’s behaviour, geopolitical rumblings – but with diversified revenues, market muscle, and a tight grip on costs, MTN is still cooking with gas.

---

MTN Uganda H1 2025 Financial Highlights

Metric	H1 2025 (Ush bn)	H1 2024 (Ush bn)	YoY Change
Total Revenue	1,722.0	1,522.7	+13.1%
Service Revenue	1,705.0	1,505.4	+13.3%
- Data Revenue	490.2	373.3	+31.3%
- Voice Revenue	629.0	626.7	+0.4%
- Fintech Revenue	524.6	442.3	+18.6%
EBITDA	924.2	784.7	+17.8%
EBITDA Margin	53.7%	51.5%	+2.2 pp
EBIT	664.6	545.6	+21.8%
Profit Before Tax	543.8	424.5	+28.1%
Profit After Tax	267.0	295.7	-9.7%
Adjusted PAT*	377.9	295.7	+27.8%
Capex (ex-leases)	219.7	219.0	+0.3%
Net Debt	1,300.0	1,490.0	-12.7%
Leverage (Net Debt/EBITDA)	0.7x	0.9x	—

*Excludes Ush 110.9 bn once-off tax settlement.

DIASPORA CASH OUR UNTAPPED RESOURCE

Every year, billions of shillings pour into Uganda quietly, steadily, lovingly—from all corners of the globe. Somewhere between sh4 trillion and sh5 trillion a year, depending on who’s counting and when.

Behind each dollar is a person: a nurse in London, a security guard in Doha, a software engineer in Johannesburg. And behind each of them is a story—a story of sacrifice, long hours, missed weddings and funerals, all driven by that deeply Ugandan impulse to “send something home.”

So when Julius Kakeeto, Chairman of the Uganda Bankers’ Association (UBA), stepped up at the 8th Annual Bankers Conference last week and posed the question—how do we move from simply receiving remittances to using them to build the country? He wasn’t talking theory. He was talking about one of the most underused, underestimated engines of development in Uganda today: diaspora money.

We’re already halfway there. The diaspora is sending the money. More than our FDI, sometimes more than our official aid. But most of it is being consumed. School fees, rent, food, the occasional plot. Necessary things, yes—but things that do not compound. Money that does not multiply.

And then there’s the real estate drama. It’s one thing to spend diaspora money. It’s another to waste it. Over the years, stories have multiplied of diaspora buyers sending cash for property, only to end up with cracked walls, poor finishes, and houses built on swamp land.

Kakeeto, also the CEO of PostBank, whose Wendi mobile wallet is well positioned to help in mopping up diaspora funds, was refreshingly candid about this, acknowledging the concerns of diaspora clients and promising action—longer liability periods for developers, stronger oversight, and better customer support from banks. Good steps, all of them.

But the real opportunity lies in treating the diaspora not just as consumers but as investors. Countries like India, Ethiopia, and Kenya have all raised money through diaspora bonds to fund national development. Uganda can do the same—issue a properly structured, transparent bond offering modest, tax-free returns and use it to build agro-industrial parks, solar plants, roads, even hospitals. A “My Country My Bond” type of thing. One where people invest not just for profit, but out of pride.

The challenge? You can take the man out of the village, but you can’t take the village out of the man. Many of our people abroad—especially in the Middle East—still send their money home with a cousin or through mobile money. They’ve heard too many horror stories to trust new schemes. Some don’t even know what a bond is. Like their cousins back home, they may not take up the offer—not for lack of interest, but for lack of knowledge.

This is where we need a serious, coordinated financial literacy campaign. Not a one-off webinar. A real effort. Multi-platform. Continuous. Diaspora-targeted.

And let’s not stop at remittances. If we can get the diaspora to trust the economy, to believe in the stability of our policies and the seriousness of our governance, then their role becomes even more powerful...

Diaspora Ugandans can attract foreign direct investment. They can introduce Ugandan entrepreneurs to capital abroad. They can pitch Uganda in investment boardrooms in London, Nairobi, and New York. If they believe in the story, they will sell it better than any agency ever could.

But belief needs evidence. That means fixing the broken things: corruption that derails projects, policies that change without warning, land conflicts that take years to resolve. It means building credible institutions and upholding them. It means not treating every diaspora dollar as bait to be chewed and spat out by crooked middlemen.

It also means making formal remittance channels cheaper, faster, and safer. A big chunk of remittances still comes in through informal means—money in pockets, mobile money workarounds, unlicensed agents. If banks want a bigger share of this pie, they need to partner smartly with fintechs, mobile operators, and international remittance companies. Build trust. Lower fees. Offer value.

And please, let’s stop treating the diaspora like one uniform group. They’re not. There’s the delivery driver in Dubai. The nurse in Texas. The systems analyst in Nairobi. They all have different incomes, different goals, different levels of exposure and risk tolerance. A one-size-fits-all approach won’t work. The diaspora bond we pitch to someone in Canada won’t be the same one that appeals to someone in Muscat. Segment. Tailor. Respect their diversity.

Kakeeto closed his speech with a metaphor that stuck: “No matter how long the river flows, it never forgets its source.” That’s the diaspora. A river of goodwill. Of sacrifice. Of steady, quiet love. It hasn’t forgotten us. But if we want this river to keep flowing—and to flow with purpose—we must honour its source. Not just with warm words and welcome slogans, but with strategy, integrity, and structure.

THE NRM PRIMARIES AND THE LAWS OF WEALTH

Last week after the dust had settled, a little bit, on the ruling NRM’s parliamentary primaries, rumours began to swirl about the cost incurred by individual candidates during the campaign.

Prices ranged from sh500 million on the lower side (!) to sh2.5 billion at the extreme. There were many questions that came to mind, not least of all, what a staggering waste of money this was—for the losers, obviously, but perhaps even more so for the winners. 

If these figures are anywhere close to the truth, then many of these men and women missed their true calling. With that kind of fundraising prowess, they should have been in venture capital or NGO development work.

But the more sobering realisation is how the basic laws of money and wealth creation were being not just broken, but mocked.

These are people who, at least on paper, are supposed to know better.

When I first read The Richest Man in Babylon

, it felt like having my grandfather sit me down for a fireside chat about money—complete with parables, cautionary tales, and just enough repetition to make sure the lesson stuck. That book, with its ancient wisdom wrapped in simple storytelling, hammers home one thing: money is not magic. It’s not luck. It’s law. Obey the law, and money obeys you. Disregard it, and it’ll flee faster than a Ugandan politician at a corruption inquiry.

“If you treat money well, it will look after you.” That could have been said by Arkad himself, the titular richest man in Babylon. He famously taught, “A part of all you earn is yours to keep.” Not to lend to your cousin. Not to splurge at the bar. Yours to keep. That one principle alone—saving at least 10% of your income has built more wealth than any forex signal or crypto tip ever will.

We see it here too. The mama mboga who saves a small cut of each day’s profit in her mobile wallet. The teacher who contributes faithfully to her SACCO. The boda rider who resists buying a newer bike on debt and instead builds a plot fund slowly over time. They’re practising Babylonian finance, whether they know it or not. They’re treating money with respect.

And Stuart Wilde would say that matters. In The Trick to Money Is Having Some, he insists that wealth starts in your energy field.

“Your external world is a mirror of your internal world,” he wrote. People who think poorly of money—who fear it, misuse it, or idolise it create financial instability around them. But those who relate to it calmly, with purpose, create a flow. They attract opportunities, they make better choices, and crucially—they

keep what they earn.

Wilde didn’t mean that in a mystical “wish-it-and-it-will-come” sense. He meant that your financial outcomes are shaped by your beliefs and habits. The man who believes he is always broke, who sees wealth as unattainable, will act accordingly—avoiding investment, borrowing recklessly, living for the next payday.

RichDad, Poor Dad author Robert Kiyosaki echoes this with his no-nonsense refrain: “It’s not how much money you make. It’s how much you keep, how hard it works for you, and how many generations you keep it for.” If you don’t give your money a task—to invest, to build, to earn returns—it becomes dead weight.

My favourite American Warren Buffett has never had time for dead money. “Do not save what is left after spending, but spend what is left after saving.” It's basic, but genius. Saving must come first, not as an afterthought but as a command. Buffett, after all, made most of his billions

after the age of 60. His wealth wasn’t about hitting the jackpot—it was about playing the game right for long enough.

Charlie Munger, his ever-curmudgeonly sidekick, was even more succinct: “The first rule of compounding: never interrupt it unnecessarily.” Once your money starts working, get out of its way. Don't cash in early, don’t panic-sell, don’t treat your investment account like an ATM.

But back to Babylon. Arkad also warns about listening to the wrong people. “Advice is one thing that is freely given away,” he says, “but watch that you take only what is worth having.” In Kampala-speak: beware the guy at the kafunda who always has a hot stock tip, a land deal in Mukono, or a shortcut to “financial freedom.” That’s not money advice. That’s how money disappears.

Here’s the kicker: all this ancient and modern wisdom agrees on one thing. You have to treat money well.

That doesn’t mean obsess over it. Wilde warns against that too: “Chasing money is like trying to catch your shadow. You must stand still and let it come to you.” In other words, focus on value. Build something. Save something. Learn something. And the money will follow.

Our economy may be informal, our incomes volatile, and inflation while a distant memory now, 

always lurking in the shadow. But the principles hold. Spend less than you earn. Save before you spend. Avoid dumb debt. Make your money earn...

At every turn of the campaigns our prospective MPs flouted these rules and will invariably pay the price.

So what does it mean to treat money well? It means paying yourself first, like Arkad said. It means thinking long-term, like Buffett. It means avoiding panic, like Munger. It means respecting the flow of energy, as Wilde puts it. And above all, it means refusing to be passive. Because money doesn’t look after those who wait for it. It looks after those who manage it.

That wisdom, applied to money, compounds like the shilling in a well-managed account. Slowly, quietly, inevitably. The lesson is the same: money is not random. It is a reflection of your relationship with it. And if you treat it with care, it will return the favour—with interest.

WHY MUSA SHOULD CARE ABOUT BOU’S JULY INDICATORS

Every morning at 5:30am, long before the sun melts the mist off the hills of Kisasi, Musa swings a leg over his boda boda and starts the day. But unlike a few months ago, his first trip isn’t for a passenger. It’s a detour. He rides nearly several kilometres down the Kisaasi-Kyanja road to a  roadside fuel pump offering petrol at UGX 4,950 a litre.

It’s not Total. It’s not Shell. The fuel might be mixed with paraffin, and sometimes it stutters in his engine. But at sh350 less per litre than the pump price at branded stations, Musa says he has no choice.

“The savings are small, but in this business, 1,000 shillings can be your profit or loss for the day,” he explains.

Musa hasn’t read the Bank of Uganda’s (BOU) July 2024 indicators, or ever. But those numbers explain exactly why he’s making longer, riskier trips just to fuel his bike.

Start with the petrol price: just above sh5,300 per litre in Kampala’s mainstream stations. It's driven by high global crude prices, a strong dollar, and hefty local taxes. And unlike salaried professionals who can absorb a few hundred shillings more, people like Musa feel it immediately. The extra cost isn’t just eating into his daily earnings—it’s forcing him into trade-offs. Shorter rides? No thank you. Picking up passengers off-route? Absolutely—especially if they help him hit his sh40,000 daily target.

And while the BOU has held the Central Bank Rate at a steady 10.25 percent to tame inflation, it also means borrowing remains costly. Musa, like many in the informal sector, relies on short-term digital loans or SACCO credit. With commercial lending rates averaging 19.7 percent in July and mobile lenders charging effective interest rates several multiples of that, debt is more a trap than a bridge...

Credit is not only expensive—it’s scarcer too.

Private sector credit growth slowed to under nine percent year-on-year in July, down from pre-pandemic levels of 14–16 percent. Lenders remain cautious. Many are still managing bad loans from the COVID-era restructuring wave and are wary of high-risk borrowers. Trade, personal loans, and even agriculture—once stable bets—have seen reduced disbursements. That’s a squeeze on exactly the sectors that employ the likes of Musa and his peers.

Yet, the broader macro picture offers glimmers of resilience.

The Uganda shilling strengthened slightly to sh3,755 per dollar from sh3,778 in June. Modest as it may seem, it helps moderate the cost of imported fuel, spare parts, and other essentials. Musa might not know it, but a weaker shilling would have pushed even his sh4,950 fuel closer to sh5,500.

Behind the shilling’s stability is a healthy stash of foreign exchange reserves—now above $4.1 billion, or enough to cover 4.5 months of imports. These reserves act like shock absorbers—critical at a time of Red Sea shipping disruptions and geopolitical jitters. They keep inflation in check and the currency steady, even when sentiment swings wildly.

Inflation itself remains within range, with headline inflation at 3.9 percent and core inflation (excluding food and fuel) edging lower to 3.2 percent. But the food crops index tells a more immediate story. Erratic rains and high transport costs pushed food prices higher in July, directly affecting Musa’s lunch bill and his family’s grocery budget.

On the trade front, Uganda’s export engine kept humming. Coffee brought in over $90 million in July, supported by strong global prices. Gold remained the top performer at over $160 million, thanks to its safe-haven demand. Fish exports, especially Nile perch to Europe, continued their recovery, and tea, maize, and sugar held their own.

What’s encouraging is not just the volume, but the market diversification. Uganda is selling more to Asia and the Middle East, reducing its reliance on traditional EAC and COMESA buyers. That diversification helps earn the dollars that keep Musa’s bike moving—even if the fuel isn’t always clean.

Then there’s the silent hero: remittances. Over $130 million came in from Ugandans abroad in July. These flows now rival foreign direct investment and are often more impactful. Chances are, Musa knows someone whose sibling in Doha or Toronto sent back money to cover rent, school fees, or top up a side hustle. In an economy where credit is tight, remittances are informal insurance and working capital rolled into one...

And digital finance? It’s booming. More than sh15 trillion changed hands via mobile money platforms in July. Musa increasingly gets paid by phone, tops up fuel digitally, and avoids the risk of carrying too much cash. For the informal economy, mobile money is now the bloodstream. Fast, traceable, and safe.

So what do July’s indicators really mean for Musa?

They mean he works harder, rides farther, and takes more risks to earn the same. He gambles daily on whether cheaper fuel will clog his engine. His access to credit is narrowing, even as operating costs rise. But they also mean the economic foundations—shilling stability, export earnings, and diaspora support are holding firm, for now.

The challenge is whether these macro wins can trickle down faster than inflation eats into earnings. Whether a stronger shilling can translate into lower fuel costs. Whether export dollars and remittances can open credit channels or drive real demand.

Until then, Musa will keep riding—past the big stations, past the safe pumps, into the lesser-known corners of the city chasing margins the economy says he shouldn’t have to fight for.

That’s the real economy, beneath the spreadsheets. Where the duck is paddling hardest.

pbusharizi@gmail.com

X @pbusharizi

UGANDA’S STUBBORN DEVELOPMENT PARADOX

In 2013, a piece titled “Ugandans are rich but cash poor”, was published in this column.

It was based on the National Household Survey of the time and a reflection shaped by countless conversations and everyday encounters. It was hard to ignore.

From Kampala to Kabale, people owned land, cows, rentals—even the odd plot in the trading centre,but when a child needed school fees or a medical emergency struck, the scramble for actual cash began. There was wealth, but it was locked away, often in forms you couldn’t easily convert when life demanded liquidity. A country asset-rich, but perpetually broke.

Fast forward a decade, and the story seems—on the surface to have improved.

The recently released Uganda National Household Survey 2023/24 paints a picture of real progress. National poverty has dropped to 16 percent, down from 21.4 percent in 2016/17 and significantly lower than the 24.5 percent that hovered around in the early 2010s. That’s something to celebrate. Even the Gini coefficient, our favourite number for inequality, has eased down from 0.415 to 0.382—a sign that we’re a bit more equal than we used to be, at least in terms of income.

But if you zoom in, if you walk the dusty paths and speak to the people, you realise something sobering: that same old paradox still holds. Just better disguised.

Let’s start with wages. Back in 2013, a median salary in Kampala was around sh200,000—enough to cover rent in a low-end suburb and maybe transport and food for a small family. Ten years later, that number has risen slightly to sh260,000 for urban workers in paid employment. That’s not insignificant. But when you account for inflation, school fees, rising fuel prices, and the cost of milk, the money disappears just as quickly as it lands. Rural areas fare worse. Median wages there remain closer to sh120,000–150,000. In essence, the nominal wage has risen, but its real purchasing power has not kept pace.

And what of financial inclusion, that shiny term we love to throw around at conferences? In 2013, mobile money had just begun its ascent. People were excited—sending and receiving cash was suddenly fast and borderless. But real financial empowerment remained limited. Few had bank accounts. Fewer still could access credit. Fast forward to 2023, and mobile money is now the norm. Formal account ownership has grown too. But here’s the catch: 77 percent of household enterprises still rely on personal savings as startup capital. Access to affordable credit, the kind that turns ideas into income, is still out of reach for most...

Back then, I wrote about how people would own three cows and five acres of land but still fail to raise school fees. That story hasn’t changed. Formalization of wealth is still rare. Land is often unregistered. Titles, too few to go around – less than two million at last count, which is a travesty when seen against the fact that more than 80 percent of Ugandan families own their homes. So the wealth sits there—visible, impressive even—but untapped. Ten years on, the form of wealth is the same, but its utility remains frustratingly limited.

There have been other changes. Food, once consuming over 50 percent of most poor households’ budgets, now accounts for 44.2 percent. That’s progress, modest as it is. Expenditure on housing, electricity and water stands at 15.9 percent—steady, though hardly relieving. These improvements have come, in part, from better infrastructure and cheaper services, but they still leave the average Ugandan living on a knife’s edge. The room for saving, investing, or even affording a modest treat is wafer thin.

Even in education, the signs are mixed. Primary gross enrolment has ticked up from 117 percent in 2016/17 to 120 percent today—still bloated by over-aged learners. Secondary enrolment is better, rising slightly from 30 to 34 percent, but we’re still nowhere near where we need to be. Literacy among adults aged 15 and above has improved from around 70 percent a decade ago to 87 percent, which is one of the few unequivocal wins in this story. Yet, cost is still the second most cited reason why children don’t go to school. Some things never change.

Perhaps most telling is the persistence of regional disparity. In 2013, I hinted at it. Today, the data confirms it. Karamoja’s poverty rate stands at a staggering 74.2 percent. Ankole, on the other hand, is at 3.2 percent. Kampala sits at 1.1 percent. These aren’t just numbers—they’re entire realities apart. When the same country yields both those figures, it begs the question: are we really talking about the same Uganda?

Inequality may be statistically narrowing, but that’s income. Not opportunity. Upcountry, the roads are worse, the schools poorer, the hospitals fewer. And when a child is born into that setup, no Gini coefficient can capture how far behind they’ve started. As I noted in 2013, inequality in Uganda is a structural problem—it’s not just who earns more, but who can do more, access more, live more.

So yes, Uganda is better off today than it was a decade ago. Fewer people are living in extreme poverty. Incomes have inched upward. Financial tools have spread across the map. But the core problem of cash poverty—the inability to access and use money when needed remains deeply embedded. We are richer, statistically. But not necessarily freer.

Uganda is moving. But many are still limping.

THE ROAD TO UGANDA'S PROSPERITY IS PAVED

In Kikaaya, a bustling neighborhood on the northern edge of Kampala, Jack’s life tells a story of transformation.

Ten years ago, Jack, a 45-year-old fruit vendor, navigated a dusty, pothole-riddled path to sell his mangoes and bananas at the local market. The journey was grueling with mud-caked shoes in the rainy season and broken axles on his borrowed bicycle.

“I lost half my stock some days,” Jack recalls, shaking his head. “The road was my enemy.”

Then, in 2015, a paved road sliced through Kikaaya, funded by the Uganda National Roads Authority. Today, Jack’s bicycle is replaced by a boda-boda, his market trips take 20 minutes, and his daily earnings have doubled.

His story isn’t just personal—it’s a window into the profound return on investment (ROI) that paved roads bring to Uganda’s communities.

Jack’s experience mirrors a broader truth: roads are the arteries of Uganda’s economy, carrying 95% percent of freight and 99  percent  of passenger traffic, contributing three percent to our GDP.

But what’s the real economic payoff of paving a kilometer of road? Beyond the tar and gravel, the numbers tell a compelling story of growth, opportunity, and challenges we must confront.

Building a kilometer of paved road in Uganda isn’t cheap. A standard two-lane road costs around $1 million, though prices can balloon to $9.3 million for expressways like Kampala-Entebbe. Terrain, materials, and labor drive these costs, with hilly areas or high-quality asphalt pushing budgets higher.

Maintenance adds another layer—unpaved roads bleed $7,971–$9,165 annually per kilometer, while paved ones, though more durable, demand periodic rehabilitation over their 15-year lifespan.

For Jack, the paved road in Kikaaya meant fewer repair costs for his transport and more reliable deliveries, but the upfront price tag raises a question: is it worth it?

The answer lies in the benefits, both tangible and intangible. Economically, paved roads are game-changers. The OECD estimates infrastructure improvements in Africa can boost GDP growth by 2.2 percent annually.

In Kikaaya, the paved road slashed transport times, cutting fuel and vehicle maintenance costs by 30–50 percent by some estimates. For Jack, this meant lower prices for his customers and higher profits for him.

Across a district, a single kilometer of road serving a region with a $10 million GDP could generate $220,000 in annual economic activity. Add in transport savings of $50,000–$100,000 per kilometer, and the economic ripple effect is clear.

But the ROI isn’t just about dollars and cents.

Social benefits are equally transformative. In Kikaaya, the paved road brought a health center within reach. “My daughter got malaria last year,” Jack says. “Before the road, I’d have carried her on my back for hours. Now, we were at the clinic in 15 minutes.”

Studies back this up: children near good roads in rural Uganda are twice as likely to survive childhood illnesses. Education benefits, too—school attendance in Kikaaya has climbed as students no longer miss classes during rainy seasons.

For women, better roads mean safer travel and access to markets, reducing economic dependence and empowering communities.

Projects like the Uganda Roads and Bridges in the Refugee Hosting Districts emphasize protecting vulnerable groups, adding social value that’s hard to quantify but impossible to ignore.

Let’s crunch the numbers. Assume a $1 million cost per kilometer and annual benefits of $350,000 (combining economic growth, transport savings, and social gains). Over 15 years, with a 5% discount rate, the present value of these benefits is roughly $3.63 million.

Subtract the initial cost, and the net benefit is $2.63 million, yielding an ROI of 263 percent—or 17.5 percent annualized. That’s a return any investor would envy. For lower-cost projects at $500,000 per kilometer, the ROI could hit 25–30 percent annually.

"Even high-cost projects, like the $9.3 million-per-kilometer Kampala-Entebbe Expressway, can justify their price if they unlock massive trade or tourism benefits, though inefficiencies there have sparked debate.

Yet, the road to prosperity isn’t without potholes.

Corruption and poor engineering can inflate costs, eroding ROI. The Uganda National Roads Authority has faced scrutiny for contractor inefficiencies, and maintenance lags can shorten a road’s lifespan. Environmental costs also loom—cement production is carbon-intensive, and without sustainable materials, we’re trading short-term gains for long-term harm. Debt-funded projects, like those backed by China’s Exim Bank, burden taxpayers if benefits don’t materialize.

Jack’s road in Kikaaya was a success, but not every project delivers. So, what’s the way forward?

First, prioritize cost-effective designs. Innovative materials or simpler road specifications could cut costs by 15–30 percent, boosting ROI.

Second, tackle corruption head-on—transparent bidding and accountability can keep budgets in check.

Third, invest in maintenance. The Uganda Road Fund’s fuel levies are a start, but consistent funding ensures roads like Kikaaya’s last their full 15 years.

Finally, measure social benefits rigorously. Health and education gains are real but often undercounted, skewing ROI calculations.

Jack’s story is Uganda’s story. His doubled income, his daughter’s saved life, and his community’s newfound mobility show what’s possible when we pave the way forward. A 263 percent ROI isn’t just a number—it’s markets reached, clinics accessible, and dreams realized. But we must build smarter, maintain diligently, and plan sustainably. Only then will every kilometer of asphalt deliver the prosperity Jack now enjoys in Kikaaya.

For more on Uganda’s infrastructure journey, check the National Development Plan or explore analytics at https://x.ai/api.

 

UGANDA’S ECONOMIC GROWTH IS REAL, BUT LET IT COME WITH DIGNITY

Last week I attended a function in a suburb of Kampala, which when I first visited it 30 years ago was not served by a tarmac road. It has had a paved ring road now for at least 10 years and the difference from the dusty rutted track of those many years ago is so drastic as to make the whole area unrecognizable.

The apartment building bug has not bitten, but the road is now lined with shops, garages and commercial buildings, which front a sprawling residential area. One can say the people of the area have done well for themselves.

The changes in this one place, replicated around Kampala made me take a look back through my blog – of the same name as this column to see whether It captured the changes that have been happening. Slow because we are in the forest of things but dramatic nevertheless.

In 2010, when my blog Shillings & Cents started chronicling Uganda’s journey through the thickets of development, the outlook was cautiously hopeful.

"The economy was growing at around six percent, the national budget had just crossed sh7.5 trillion, and the idea that Uganda could one day hit middle-income status wasn’t laughable—it was just… distant...

Fast forward to 2025 and the budget now stands at a staggering sh72 trillion. The economy has crossed sh250 trillion in GDP. Inflation is tamed – in 2011 it hit a 19 year high of 30 percent. Life expectancy is up. Mobile money is a way of life. The National Social Security Fund (NSSF), once a sleepy bureaucratic entity, has grown into a sh20 trillion financial behemoth. Uganda today is a very different animal from what it was fifteen years ago. And we must say it plainly—we’ve done well to get this far.

Especially when you consider the global context.

Over the past decade and a half, the world has stumbled from one economic crisis to another. The 2010 Eurozone debt crunch, the China slowdown, COVID-19, supply chain disruptions, Russia’s war in Ukraine, and now, tightening global credit conditions. Through it all, Uganda’s economy has remained on its feet—sometimes limping, sometimes jogging but never knocked out.

That resilience deserves more attention than it gets. It hasn’t happened by accident.

For one, Uganda’s economy is far more diversified today than it was in the early 2000s. We’re no longer clinging desperately to coffee and copper. Agriculture still plays a major role, but now construction, services, ICT, and even oil and gas are in the mix. There are young Ugandans writing code, exporting crafts on Etsy, and building businesses in fields their parents never imagined. From Gulu to Mbarara, the quiet hum of commerce has spread.

And we’re more regionally plugged in than ever before. South Sudan is now one of our top export destinations. Congolese buyers are regulars in downtown Kampala. Our traders, manufacturers, and transporters are slowly embedding Uganda into the heart of the East African economic engine. This regional integration has created a cushion against global shocks. When the West sneezes, we no longer catch pneumonia quite as quickly.

Add to that the revolution in financial inclusion

. Mobile money has changed everything. What started as a basic platform to send and receive cash is now a full-blown ecosystem: payments, loans, savings, insurance, and even investment products all on a phone. People who’ve never seen the inside of a bank now manage their daily finances digitally. Informal traders, boda riders, market women—millions of Ugandans are now part of a financial system they were previously excluded from. That alone has unlocked trillions of shillings in dormant capital.

The growth in personal savings is also encouraging. The NSSF has grown exponentially, both in member numbers and assets under management. It is now one of the largest institutional investors in East Africa, helping fund roads, real estate, and industrial parks. And unlike many state agencies, it has—mostly stayed clean and efficient.

So yes, Uganda has made undeniable progress. The share of the population living below the poverty line has fallen, though stubborn regional inequalities remain. Life expectancy is over 63, up from 53 in 2010. More mothers give birth in health centres. More children survive to age five. More of them go to school. These are not statistics—they are lived improvements.

And yet. And yet.

Despite all the praise, all the ribbon-cuttings, all the budget increases, Uganda’s development journey still suffers from a deep malaise: corruption.

It doesn’t matter how good your policies are, how much money you allocate, or how clear your vision is—if the money leaks before it hits the ground, progress will remain stunted. And that is exactly what has plagued Uganda for the past two decades. From inflated contracts and ghost payments to endless project delays and shoddy workmanship, corruption has undermined nearly every sector meant to drive transformation.

Take roads, for example. Yes, we’ve built more roads in the last 15 years than in the previous 50. But how many of them are holding up? How many are still in warranty? How many feeder roads—essential for farmers to reach markets—are still impassable during the rainy season?

Health and education? Budgets have grown. So have the number of facilities. But too many schools still lack furniture. Too many teachers are underpaid. Too many health centres still run out of medicine. And somewhere in between the Ministry of Finance, the district engineers, and the contractor’s bank account—the money disappears.

We need to stop pretending that corruption is an unfortunate side effect of development. It is the primary reason we are not where we should be. Uganda could have done even better—much better if we were simply more honest with ourselves and our institutions.

That said, let’s thank God we are no longer in the 1980s.

Those were the years of price controls, ration queues, government monopolies, and empty shelves. Uganda back then was a textbook case of economic collapse. The liberalisation of the 1990s and early 2000s—controversial as it was freed the market, brought in private capital, and allowed enterprise to flourish. Without it, there would be no MTN, no Airtel, no mobile money, no supermarkets, no telecom towers. We would not be discussing AI, chip design, or e-commerce as part of Uganda’s future.

So yes, we’ve come far. We are stronger, more diversified, more regionally connected, more digitally savvy, and more economically active than we were fifteen years ago.

But we must now turn that growth into dignity.

Dignity for the mother who walks five kilometres to a health centre and finds no midwife. Dignity for the farmer whose road washes away each season. Dignity for the child sitting in a classroom with no desk, no books, and no teacher.

Growth is good. But dignity is better.

Because at the end of the day, progress isn’t a PowerPoint slide. It’s the borehole that works. The classroom with a roof. The hospital with medicine.

Uganda has shown it can grow. Now let’s prove we can grow well.

BOOK REVIEW -- THE LEXUS &THE OLIVE TREE VS CHIP WAR

I recently read ChipWar by Chris Miller — a riveting account of how the semiconductor became the world’s most important technology and, by extension, the nerve centre of 21st-century geopolitics. As I turned the pages, I couldn’t help but contrast its thesis with that of Thomas Friedman’s The Lexus and the Olive Tree that I read about two decades ago.

Reading the two side by side, one gets a sense of how the world has changed — and hasn’t. Friedman was writing at a time when the buzzword was “globalisation,” and there was a kind of religious conviction that the market, the internet, and capital flows would knit the world into a single prosperous village. That vision now feels quaint, almost naïve. Miller’s narrative, meanwhile, is one of choke points, technological bottlenecks, and the fragility of interdependence.

The two are particularly interesting in understanding the happenings in the Middle East, I think.

Friedman’s “Lexus”, which name I recently learnt was an abbreviation for “luxury export to the US”,  was the symbol of progress: high-tech, efficient, and global. His “Olive Tree” was the reminder that identity, culture, and history still matter — and often collide with the Lexus in unpredictable ways. In Gaza, in southern Lebanon, in the Red Sea, we are witnessing just such a clash. The global supply chain hums along, until it hits a blockade — metaphorical or literal — thrown up by actors who feel excluded or endangered by the global system.

Friedman’s hope was that the gravitational pull of the global economy would discipline states and societies into predictable behaviour. You don’t throw rocks at the Lexus showroom if you’ve got one parked in your garage. But as the current crisis shows, not everyone got the Lexus, and the Olive Tree has deep roots. In fact, the more globalised the world has become, the more some have doubled down on identity, resistance, and sovereignty.

Where Friedman saw a flattening world, Chris Miller sees a world stratified by silicon — specifically, the chip. Chip War

argues that semiconductors are not just components of technology but weapons of statecraft, economic leverage, and military dominance. The entire global system runs on chips — from AI and cloud computing to missile guidance and cyber surveillance. And crucially,

no one country controls the whole supply chain.

The Middle East, too, is entangled in this chip narrative. Iran has been desperate to circumvent sanctions by building its own tech capacity. Israel’s dominance in drone technology, cyber tools, and precision warfare depends on cutting-edge chips. The Gulf states, meanwhile, are investing in AI and digital infrastructure as part of their post-oil futures. And yet, almost none of them can produce the chips they need. They are at the mercy of a fragile, globally dispersed supply chain — one increasingly weaponised by the likes of Washington and Beijing.

The chip is the new oil — but it’s even more volatile.

Take the Houthis in Yemen. A militia with rudimentary drones has managed to disrupt global shipping in the Red Sea, sending freight costs soaring and rerouting traffic around Africa. It’s a vivid example of what Miller and Friedman both recognised in different ways: globalisation has empowered non-state actors in unprecedented ways. The Houthis don’t need to hold a capital city to project power; they just need a drone, a grievance, and a global market to disrupt.

And the consequences aren’t confined to the region. A spike in insurance premiums in the Suez Canal or a supply delay for Taiwanese chips affects the global economy. The butterfly effect of a regional flare-up now has boardroom and battlefield consequences from Frankfurt to Free Town.

This fragility — what Miller calls “the bottleneck economy” is the reality we now inhabit. Whether it’s ASML’s lithography machines in the Netherlands, or Taiwan’s TSMC factories, or Israel’s tech corridors, the supply chain that undergirds the global economy is a high-wire act. And when tensions rise in the Middle East, the whole system wobbles.

What both The Lexus and the Olive Tree and Chip War remind us is that power is no longer just about tanks and territory. It’s about networks, chips, and narrative. And the Middle East, long seen through the prism of oil and ideology, is now a front in the battle for technological and supply chain supremacy.

But to me, perhaps the deepest insight comes from the contrast between the two books. Friedman saw a world where prosperity would temper politics. Miller shows us a world where technology is politics. And in the Middle East today, the Olive Tree hasn’t been uprooted — it has simply grown into the data centres, missile batteries, and AI command rooms of the region’s new power players.

The old conflict over identity, territory, and belief now plays out with silicon and software layered on top.

In the end, the question is not whether the Lexus can outrun the Olive Tree, or whether chips will replace bullets. It is whether we are ready to govern a world where both coexist in a deeply unstable equilibrium. A world where prosperity and progress are still possible — but only if we understand the new rules of power.

And those rules are being written — in code, in silicon, and increasingly, in the sands of the Middle East.

For a small, pre-industrial country like Uganda, the lessons from Chip War and The Lexus and the Olive Tree

are both sobering and instructive. In a world where technological supremacy defines geopolitical clout and where global supply chains are both opportunity and threat, Uganda must recognise that digital sovereignty and data infrastructure are the new frontiers of development and security. While we may not build chips, we must invest in local talent, protect digital infrastructure, and strategically align with global tech blocs.

In a world ruled by chips and chokepoints, staying non-aligned is not a strategy. It’s a vulnerability. Uganda must leapfrog wisely—choosing the right alliances, building digital capacity, and anchoring the Olive Tree in the soil of a fast-changing global order.