QUARTZ, CODE AND COFFEE: UGANDA’S TECHNOLOGICAL AWAKENING

For decades, Uganda has stood at the edge of the technological revolution—watching, importing, consuming. We bought the computers, laid the fibre, issued grand development statements—and yet, we remained a nation defined more by what we lacked than what we made.

But as the National Science Week, which opened yesterday at the Kololo Independence grounds shows, a quiet but profound shift is taking place. This time, it’s not just another government initiative. It’s a declaration: Uganda intends to become a builder.

Think about quartz, the high-grade silica sand scattered across Uganda’s valleys. For years, it sat there—unappreciated, unexploited. But a small team of Ugandan technologists and scientists has been quietly testing its potential, running pre-feasibility studies, and exploring how to refine it into metallurgical-grade silicon—the base ingredient for semiconductors, solar panels, and a host of high-tech applications.

The science is tough. Silicon is extracted by stripping oxygen from silicon dioxide—an energy-intensive process usually done using carbon sources like coal. And Uganda, as it turns out, has that too. Down south, coal deposits and biomass reserves could power a local silicon industry. It's still early, but the feasibility studies are promising. First, metallurgical-grade silicon. Then silicon wafers. Eventually, chips. That’s the roadmap.

This is not fantasy. It’s part of a broader, methodical movement gaining steam under the Science, Technology and Innovation (STI) Secretariat. These aren't vanity projects. They’re deliberate steps to rewire Uganda’s economy around innovation, value addition, and ecosystem thinking.

The emerging vision is simple but bold: move from resource extraction to resource transformation. From raw quartz to silicon. From unprocessed coffee to premium-branded exports. From importing sensors with a 70 percent defect rate to building locally with near-zero failure.

And it’s already happening.

Last week I visited the Deep Tech Center of Excellence in Namanve where engineers are prototyping, fabricating, and testing devices right here in Uganda. Local firm Innovex is building world-class sensors that meet international standards. Meanwhile, the Roke Cloud initiative is laying the groundwork for Uganda’s own cloud computing infrastructure—so our data doesn’t have to fly halfway around the world and back. These projects aren’t mere technical experiments—they are strategic acts of sovereignty.

Even artificial intelligence isn’t being left to Silicon Valley. An AI Studio is up and running, not as a government department, but as a self-organising ecosystem of volunteers, entrepreneurs, and researchers. In a country where policy has often strangled innovation, this decentralized approach is refreshing—and radical.

David Gonahasa, Team leader Industry 4.0+ at STI enthusiasm for what is happening, may make believers out of skeptics, like me, to whom all this seems too incremental. Too fragile.

That’s how real innovation begins—not with big bangs, but with proof of concept, he tells me. Like the Kampala Motor Corporation, whose buses are rolling proof that local manufacturing isn’t a pipe dream. Or the early experiments in silicon processing, showing that what we have—quartz, energy, and coal—can be more than geological trivia. They are the raw materials of a digital future.

Of course, none of this will work without a change in mindset. For years, Uganda has suffered from what you might call a “consumption complex.” We trusted foreign goods, foreign ideas, foreign experts. Our local equivalents were seen as second-best—or worse, as charity cases. But the STI approach is forcing a rethinking. Now, the focus is on outputs, not inputs. Capabilities, not checklists.

This isn’t just economic policy—it’s cultural reform.

That’s why Science Week matters. It’s not just a conference or an exhibition. It’s a mirror and a megaphone. It shows us what’s possible, and it announces to the world that Uganda is no longer content to sit on the sidelines of global innovation.

It’s also about visibility. Seventy international venture capitalists have been invited to see for themselves what Uganda has to offer. Not just pitches, but products. Not just decks, but factories. These investors aren’t being courted for handouts, but for partnership—and perhaps even a bit of surprise. Because Uganda is doing something unusual: building patiently, locally, and with intent.

To be sure, challenges remain. For instance extracting silicon at scale is still expensive. Energy-intensive processes require environmental foresight. The legal frameworks for high-tech industries are still catching up. And Uganda’s venture ecosystem is in its infancy.

But consider where we’re coming from. From a country whose economic narrative has been dominated by agriculture and infrastructure, we’re pivoting to one where microchips, sensors, cloud infrastructure, and AI studios are part of the national conversation. That’s not just development—it’s transformation.

In a sense, Uganda’s science revolution is an echo of its coffee renaissance. Once exporters of raw beans, local entrepreneurs are now roasting, branding, and selling to premium markets. The logic is the same: add value at home, keep the margins, build capability.

If we can do it with coffee, why not with quartz?

The future is being written now—by scientists, by entrepreneurs, by policy shapers who understand that real development isn’t about donor metrics or ribbon-cutting ceremonies. It’s about building capacity and retaining value.

Uganda doesn’t lack resources. We’ve always had them. What we lacked was the will to turn those resources into a foundation for innovation. That may finally be changing.

And if it does, we won’t just be another developing country tinkering at the edges of someone else’s technology. We’ll be creators in our own right—transforming quartz into code, and ambition into industry.

So join me this week at the Science Week to see what our government and more importantly our young people and scientists are up to.

 

MTN AND THE SIGN OF THINGS TO COME

Last week MTN publically released its results for the first time in its 23-year history in Uganda.

This was necessary as they are now listed on the Uganda Securities Exchange (USE), for which it is mandatory to report publically on the company financials at least twice a year.

The Telecom company reported that revenues grew 9.4 percent to break through the sh2.04trillion mark, the only Ugandan company to do so.  The increased revenues were driven mostly by data sales and fintech (mobile money services), which jumped 22 percent and 10 percent respectively.

New shareholders will share among themselves sh105b in dividends for owning the share for the last 25 days of last year. The dividends per share will be sh4.7. The total dividend paid out sh15 per shares, sh11 in dividends was paid out before last year’s share offer.

That was all very nice but the results also pointed to the new trends cementing themselves and bound to affect the way we relate and do business into the future.

For starters, for the first time in MTN Uganda’s history revenue from voice calls -- sh1.01trillon fell below half of total revenues. While voice revenues grew 3.6 percent compared to the previous year, this was dwarfed by growth in data and mobile money services....

More than a decade ago when Bobby Collymore took over the reins at Kenya’s Safaricom, he said in his first interview that, in the future voice services will be an add on, given away for free by telecom companies that the action was going to be in data and mobile money services. I couldn’t relate at the time but we see it come to pass before our very eyes.

While the growth in data and fintech can be blamed on the Covid-19 restrictions of the last two years, industry players are confident that the use of both services instead of falling back to pre-covid levels will in grow faster into the future.

To that end MTN is making smartphones available more conveniently through hire purchase schemes. More than 100,000 phones were acquired these schemes and have accounted for some of the increased data usage. Almost a million new data subscribers and 1.5 million new fintech subscribers were signed onto the MTN network.

Assuming this growth continues we are heading very quickly towards a cashless society, bill payments grew 58 percent and merchant payments grew by 14 percent.

Even more startling for me was that mobile money deposits grew by sh300b to sh960b, a 46 percent growth which in itself account for the total deposits of some of our smaller banks. While MTN cannot finance its business using these deposits they still constitute a huge proportion of the monies we saved under our mattresses or in our socks or bras, being brought into the formal financial sector and therefore more useful to the general economy. Assuming the current rate of growth continues these deposits will double every two years, if you extrapolate this into the future, it boggles the mind how big these deposits will have grown to.

It is obvious that MTN and telecom companies in general, will be a great driver of financial inclusion, resource mobilization and even economic transformation...

It happening already in parts of the country where early adopters are saving on their phones or running their accounts in their SACCOs via their phones, borrowing and investing off their phones.

One of the biggest factors in income inequalities is a lack of information. Ground down to its most basic level, you are poorer than your rich neighbour because you do not know something he knows. And once you have the information can you act on it? Now with data services becoming more and more pervasive we can get the information and with fintech going the same way we can act on what we know, in real time.

It follows therefore that it is in the economy’s best interest that tools such as smart phones are held by more and more people. In South Africa eight in every ten people has a smart phone, business there moves at the speed of light.

It was reported recently that Sweden has the most internet startup per capita of every country in the world. Looking back to how this came about, it was traced back to a government policy in the early 1980s that sort to have a computer in every house. The children of that time, who were exposed early on to the computer, leveraged their familiarity they had developed playing Space Invaders into programming and eventually building tech companies.

While there is momentum in adopting these new technologies government can speed it up by revisiting its tax regime around the ICT sector as a means to increase especially smart phone penetration and data usage. We will not be reinventing the wheel, oy has been done before and with great success.

SOMETHING IS GOING TO GIVE

A week or so ago, it was reported that parliament had earmarked a budget of sh165b or sh300m for each of the 520 MPs to buy a car.

Understandably there was a public uproar. In this time when we are trying to recover from the Covid-19 related down turn in the economy, when many are seeing lower incomes or loss of jobs altogether, when businesses are shutting down up and down the street,

this shameless show of public gorging at the trough was worse than a slap in the face of Ugandans....

History shows that among the main  reasons for economic collapse, is when countries starve or eliminate the productive sectors of resources in favour of consumers.

We saw it in the 1970s with the expulsion of the Asians by Idi Amin.  The Asians at the time dominated the commercial space – as they did all over East Africa. You might not like the Asians, business skills are passed on through mentorship not through presidential edict. It is the reason why some of our most respected businessmen have learnt their skills at the feet of Asian businessmen, and why too, Kenya’s indigenous business community is more robust than our own.

It happened more recently in Zimbabwe, where Robert Mugabe in a last desperate attempt to hang on to power dispossessed white businessmen of their land. The result was that Zimbabwe went from a net exporter of food to a recipient of food aid today.

In the 21st century less brutal means are being used but work nevertheless. 

When MPs get sh165b for cars to whizz around the country, sectors like tourism – our largest foreign exchange earner, have been allocated sh176b in the 2021/22 budget. Gold has overtaken coffee as our largest export earner, but only sh81b has been allocated to mineral development.  

The winner has to be that government has allocated sh102b to digital transformation. 

Last year if there were any doubts that this country needs to fast track the adoption of ICT technologies, the Covid lockdown removed all doubt. Businessmen were forced to adopt electronic payment systems and online delivery to stay afloat. We need more government investment in infrastrucure and training as well as forward looking policies that will ensure we keep up with modern trends. Consumers need faster internet speeds and those who don’t have, should not be left behind.

Maybe the sh100b earmarked for digital transformation is enough but it speaks to what our priorities are.

Parliament, which has grown to an ungainly 520 members while our revenues are expected to fall short of the projected sh21.8trillion by sh3trillion. It is common sense – or at least it should be, that when your incomes is falling you have to cut your expenses, but clearly not in Uganda.

It would be funny if it weren’t frightening...

People forget that the reason we had to suffer the Structural Adjustment Programs (SAPs) of the 1980s and 1990s, at the heart of it, was that we were not collecting enough revenue to meet our costs. So we were forced to cut back on our costs as a condition to borrow the money to jump start the productive sectors of the economy.

If we are not careful we may find ourselves back in the same place and not because of war and destruction...

As it is now one in every three shillings of the budget – sh15trillion is going to go towards debt repayments. This would not be a problem as long as the economy is growing and tax revenues are following suit, but that is not the case.

And since we don’t want to tighten our belts we have to borrow more to cover the deficit, and who approves government loan requests? Parliament. What a racket!

To be fair there are other questionable expenditures up and down the budget – did you hear about the sh481b the Bank of Uganda did not want?

So God forbid one day we will wake up a we can not service our debt and the foreign lenders will  return us to SAPs. Hopefully one of the fist things they will insist on, is to take an axe to parliament’s ballooning budget. And of course parliament will mobilise us lemmings to protest against the “imperialist” agents, yet they are the ones through their own profligacy, that will have sunk us into the hole. Unfortunately health, education and infrastructure budgets will be cut slowing down our development ambitions.

Some may argue that the sh165b is to cater for cars over the next five years, but it is still a one off hit on next year’s budget.

Ok given that the MPs need transportation to carry out their “important” duties in their constituencies, but there are much more cost efficient ways to do this.

For instance government can lend the MPs the money to buy their cars. Even if they gave them interest free loans that would be much cheaper than what is currently happening. One advantage of this is the MPs would be forced to cut their coat to fit the cloth and we might have a more  rational distribution of cars, not all fuel guzzlers as it is likely to be now.

But even cheaper for government is if it got a fleet management company that would own  and maintain the cars. Also in addition they would rationalise the fleet, there is no reason why the Kampala Central MP should have a car of the same capacity as the MP from Arua, Kabong or Kisoro.  This will have real cost saving implications not only in the cost of the cars but also the cost of running them. 

And those are a but a few options we should, no, must adopt, in order to come out of the current economic crisis standing.

Unfortunately this is not going to happen.

Our public servants and officials see the treasury only as means for accumulation and self aggrandisement and to hell with the rest of us....

Imagine where this country would be if those same MPs set their minds to building enterprises that can sustain them in the lifestyles – sh20m a month salary, they have now become accustomed?

THE COST OF SHUTTING DOWN THE INTERNET

My friend was hoping she had left the trials and tribulations of 2020 behind her and that 2021 would allow her business to get back on its feet again.

Last year Agnes was forced to shut down her downtown shop, where she dealt in shoes and clothes. The lockdown and the subsequent collapse in economic activity meant, she couldn’t keep with rent payments. She substituted a physical location for an online presence in August and by the end of the year her revenues were not quite up to where they were at the same time the previous year, but because of the saving on rent, she was not complaining.

New stock had just come in at the beginning of last week and she was taking orders when government shut down social media – she deals off facebook and instagram  and then the internet altogether. And to add salt to injury mobile money transfers too were suspended.

While the internet is back on and social media still – officially off, she believe she has lost momentum and could the government please restore normal service asap.

The government shut down the internet for fear of anticipated riots in the wake of the just concluded elections.

In a liberalised economy government has three main roles --  to maintain macroeconomic stability, regulate and direct markets through an overarching strategy for the economy.

"When the liberalised economy fails to deliver to the general population it is an indictment on the government of the day....

The market, while being the most effective creator of wealth we know, is the probably the worst distributor of that  same wealth. The market tends to give more to those who have and to those with little, even the little they have it takes away from them.

The distribution of wealth is therefore a government role. By providing services like security, health and education, governments ensure that a conducive environment for wealth creation is in place and that by improving the productivity of the people they can not only create more wealth, but also take advantage of the opportunities thrown up by the benign environment.

But more importantly through formulating strategy, which determines the national vision and therefore to which sectors resources will be directed, the government signals to the market what its priorities are. Regulation also ensures that among other things anti-competitive behaviour does not take root.

Some people with ulterior motives, other than making the economy more efficient in driving development, think that government should be in business to blunt the worst excesses of the market.

The problem and this shows up in inefficient state enterprises, which distort markets and drain the public coffers, is that government’s the world over key agenda is to stay in power. They do this through distributing patronage. Governments can not help themselves, faced with a choice between staying in power and profitable companies, they will choose the fòrmer over the latter...

That is how you find questionable investments – like the ice cooling plant on the shores of Lake Victoria not connected to the electricity grid or the banana project that has swallowed billions of shillings over the last decade and has not gone commercial or the fruit factory in eastern Uganda which is limping despite the vast bounty of fruit in the region …. And don’t get me started about Uganda Airlines.

To repeat myself, the main role of government is to create an enabling environment for business to thrive, without abrogating its responsibility to ensure that the economy works for its citizens not for a small urban elite or foreign interests.

Which brings us around to the closure of the internet last week. 

While we can not discount the threats to national security that government claimed, a national strategy would have helped the decision makers factor in the loss to the economy and judge the opportunity cost of taking one action or another. 

Other countries including the US have had elections in the last six months. They too had serious national security issues surrounding safeguarding their electoral processes. But because e-commerce is a multi-trillion business shutting down the internet was not an option. Instead the US has invested massive resources in online security as well as built collaborative  relationships with industry.

The US knows and appreciates that the internet is a major infrastructure, which while it does not own it, has found and continues to find ways to ensure it works for the American people and business.

It is not impossible. 

It is very possible that there are external threats to national security and they show themselves in one way or another everyday. But government has found a way to monitor and deter these – I hope, without shutting down our roads at every rumour or sign of danger.

A similar soft touch is required for 21st century technologies.

Thanks to the lock down last year the move towards e-commerce by our businesses has accelerated. That might have been the one silver lining that came out of the covid-19 pandemic.

"Just like our economy will be helped by better quality roads, railways and marine transport we need our internet to be fast, reliable and uninterrupted. Our competitiveness as a nation will rely on that more and more....

The Fourth Industrial Revolution (4IR) task force is completing its report, with a proposed strategy for the nation on how we can adopt and take advantage of the new technologies that are coming into common use. Maybe a clause about how to manage these around elections may be important.

THE FOURTH INDUSTRIAL REVOLUTION IS HERE

A fortnight ago the Fourth Industrial Revolution (4IR) National Taskforce presented to the public a draft strategy, the broad strokes of how Uganda is going to situate itself in this new phenomenon.

The first industrial revolution saw the shift away from animal and manual power to the use of fossil fuels for energy and mechanical power. Electricity heralded the second industrial revolution. We are easing out of the third revolution where digitisation and internet connectivity have been its main features. The fourth industrial revolution is seeing the combination of virtual, physical and biology interactions facilitated by technology.

Looking down the ages  we can see that the duration between industrial revolutions are becoming much shorter, with each revolution increasing human productivity dramatically.

The difference between how far one can go on bicycle as compared to riding in a car not only  compressed distances but time itself. Or the difference in output between having a computer connected to the net and juggling a typewriter, calculator and making regular runs to a physical library.

The fourth industrial revolution, with its advances in cloud computing, Artificial Intelligence, blockchain technologies, 3D printing, autonomous vehicles   and biotechnologies is going to dramatically – is already, changing the way we produce, distribute and consume goods and services.

"The wide application of these technologies, as will inevitably happen is set to increase our productivity exponentially to the point that futurists envisage a time when machines will do all the work and we will be paid to just seat around....

As incredible as that sounds, as recently as the 1980s the idea of wireless telephony, driverless cars and 3D printing were the stuff of sci-fi novels and movies.

But just as the potential of this new revolution is hard to wrap ones mind around its also true that the early adopters will have a head start on everybody else, with real ramifications for global and local wealth distribution, security and natural resource usage and regeneration.

It was therefore inspired thinking when Uganda launched its 4IR taskforce to look into how Uganda can proactively take advantage of this new revolution.

Over about a year the taskforce chaired by John Nasasira, himself a former ICT minster and peopled by members from government, academia and the private sector have turned the subject upside down and come up with a strategy which will help Uganda get ahead on the subject.

"The opportunities identified include increasing agricultural productivity, boosting human capital development, supporting urbanisation and governance and bridging other development deficiencies...

Its an elegant document that spells what and where the opportunities are, how we can set up to take advantage and the agencies that will lead the charge into the brave new world.

Its value will be in how much the government will adopt and operationalise the strategy.

To illustrate, if we had comparable document going into the ICT era the government would not have stumbled over issues of taxing computers and mobile phones, would have been better prepared to create an enabling environment which allows us to take maximum advantage of ICT and even prepared us better for 4IR.

We are not the worst –

we have a liberalised telecommunications sector, which has seen our phone penetration increase by leaps and bounds, introduced financial services that exploded the stuffiness of the banks and increased the general productivity of the economy in the face of donor moodiness, a global financial crisis and several natural disasters.

Imagine if we had been more deliberate and systematic in appreciating and taking advantage of the digitial age? It is not a stretch to imagine we would be much better off as a country today.

To take advantage of this new era certain enablers have to be put in place – greater 4IRconnectivity, greater regulatory agility, upskilling of Ugandans, deeper eGovernment, resource mobilisation and investment promotion to attract new players.

"Contrary to popular opinion government has a good record of following through on reports it generates, only that it s does not accompany the execution with as much fanfare as they do when releasing the report....

Given the speed with which things are changing this new strategy has a short shelf life than say the report on URA or the police, so speed is of the essence in operationalising the strategy.

Nevertheless its a document that can be referred to and upgraded in coming years.

I remember more than two decades ago to get my stories to Nairobi where the Reuters office was, i had to type the stories out, slide down to the post office to send the fax and stand by the fax machine to ensure the whole story was transmitted. The process took at least an hour.

"Today not only are fax machines obsolete but off my phone I can write a story, while in motion and email, whatsapp or text it down the line, the whole process taking little more than 30 minute  or not much more than it takes to write the story...

.

In theory I can now generate at least twice as much as I used to then and for much cheaper.

I think that’s amazing. But I have to pose when I think that with proper utilisation of 4IR technologies the same story may take even a third as much time to execute.

Comparable gains can be seen in any industry. Hang on to your seats we are in for an exciting ride.

BIG NEWS: MTN GOT THEIR LICENSE RENEWED BUT …

Last week it was announced that the government had finally renewed telecom company MTN’s operating license.

This comes after nearly two years of hard negotiation that included such tactics and brinkmanship as can only be found on the Hollywood screen.

MTN is to pay $100m (sh370b) for a 12 year term. MTN’s Second Network Operator (SNO) license  expired in November 2018.

The announcement last week not only brought to an end the protracted negotiation between Kampala and Johannesburg but also finally clarified on government’s position on telecom licensing going into the future.

The ICT minister Judith Nabakoba last month gazetted licensing requirements for operators in the industry. 

This is the tail end of the  process that led with the unveiling of the Broadband Policy in 2018.

The gazette promises to bring some order to an industry by formalising the licensing of infrastructure and service providers, greater clarity on bandwidth usage and the regulation of other accessory services.

Attracting more players up and down the value chain will be good for the customers as the competition will ensure not only choice but quality service at an affordable price.

But of course the highlight was the telecom licensing.

Under the new rules there are now provisions for nine categories of licenses that range from the National Telecom Operator (NTO) to the community operator license. Each has the fees and obligations of the operator outlined.

For the first time it clear that if you want to invest in the sector this is what it will cost to get a license and your obligations under the license.

So for instance if you apply for National Telecommunications Operator license the least you can pay for the license is $21.3m (about sh80b) that’s for a new entrant into the market. 

That would allow you to lay down your infrastructure and provide a full spectrum of services from voice to data around the country.

If you are an existing player and  want to renew your license you would pay 1.84% of the previous year’s revenues multiplied by ten, the first half of the 20 year license.

So under these circumstances Airtel, whose license comes up for renewal in July, given their annual revenues of about $380m last year, would pay about $70m.

However, and this probably explains the two year delay – from the passing of the broadband policy, in spelling these all out the minister curved out a special category for MTN.

In this the National Telecommunications Operator (special license category) MTN will pay $100m (no indication how this figured is arrived at) for a license that will run for 12 years.  

Immediately questions jump to mind. Why is MTN being treated differently, using subjective parameters that the public or other competitors are not privy to? Why will the NTO get 10 years, with an option to renew for another 10 years and MTN is not afforded that choice? And what will happen if another operator insist on getting their own terms like MTN? 

In a throw back to

"1998, MTN paid $6m for its 20 year Second Network Operator (SNO) license. One of the conditions of the license was that they were supposed to sign on 89,000 lines in five years. This looked an insurmountable  task given that Uganda Telecommunications Ltd (UTL) had only managed 50,000 subscribers since independence and Celtel had about 5,000 subscribers....

But when MTN signed on more than 100,000 subscribers in the first year the six million fee begun to look like a bargain.

Interestingly MTN won the license partly because they offered the highest price of any bidder at the time in an open and transparent process.

With that in mind it is not inconceivable that with the rapid developments in technology, that five or 10 years down the line the $100m license fee may very well be a bargain. And then other license operators may want to be in the special category, which for the moment is only for MTN.

In rule based environments these kind of disparities are a recipe for all sorts of misplaced perceptions and complaints.

And if you think about it the distinction was not necessary. The  ministry could have kept MTN in the NTO category and they can get renewal after 12 years.

Interestingly in both licenses the holders are expected to list on the Uganda Securities exchange (USE) within two years of signing on.

An investor looking to invest would not be looking at operators with the same license. On the one hand would be the “special” MTN for who it is not clear the license would be renewed after 12 years and the other operator who has the option to renew after ten years.

It is always difficult to price for these long term investments, see the brouhaha in the electricity sector in recent years. Keeping this in mind

the wise thing to do is to reduce discretion to the minimum to make the affected businesses viable, but also as a signal to intending investors that you, as a government know what you are doing.... 

 The devil they say is in the detail, let’s mark this anomaly for future reference.

 

THE MOBILE PHONES UNDERSTATED ROLE IN ECONOMIC GROWTH

A friend recently did a trip up and down the country. Having done this several times before, he was shocked to discover, this time around, that he could not roll into a town unannounced, so to speak, book himself into a hotel for a night. Like in the good old days.

Being a celebrity counted for nothing. There was not a quality room– clean linen, working shower and solid door, to be had.

This did not happen only once but in several towns in the west, north and east of the country. And he couldn’t work out what was happening.

"In 1999 Uganda’s GDP growth jumped to 8.1% from 4.9% the previous year. There was no coffee boom or bumper harvest that year. In fact El Nino, the weather phenomenon characterized by flooding and prolonged rains had ravaged the crops up and down the country. In addition we were suffering a lot of bad press for our incursion into Congo and some donors had pulled the plug on their funds in a huff...

But in that year Uganda became the first country in sub-Saharan Africa where mobile phone coverage exceeded the number of land lines.

Up to this point Uganda had about 50,000 landlines on the Uganda Posts & Telecommunications Corporation (UPTC) network. In November 1998 South African company MTN –mobile telecommunications network then, entered the market and triggered the explosion in the uptake of mobile phones.

The correlation between the near doubling in GDP growth in 12 months and the widespread use of mobile phones is anecdotal at best, but may provide useful grist for a study.

Fast forward to today and the same parallels may be drawn to explain my friend’s travails on his travels.

But before we talk about mobile phone coverage there is the improvement in trunk roads around the country. In the last few years hundreds of kilometers of trunk roads have been worked on, creating a tarmac lattice around the country, making movement that much easier.

So it’s possible that the inns around the country are full, from travelers who can begin their trip later in the day and stopover in the major towns before a final push for home in the morning.

Add to that the phenomenon that now transport is available to any part of the country from Kampala any time of the day or night.

But I would like to think too that since now mobile communication has grown beyond voice calls as it was in 1999, to now include texting, social media and even mobile money, economy is beginning to reap the benefits of these improved communication means.

The last one is particularly interesting, it has become such a part of our lives that we take it for granted.

In 1998 if someone called you and said he was hard up for money, he was in Mbale say and you were in Kampala, how quickly could you get the money if you had it on you? You could go down to the bus park and find someone to deliver the money to so-and-so’s shop. People got a bit clever and to move money over such distances they would buy airtime, text the code and the recipient would find a way to flog the airtime for money where he was.

Hard to imagine if you were not there, when today the request can be honoured in under five minutes.

Given this scenario, is it no wonder that we now have a proliferation of bars springing up around every surburb and seemingly doing a rip roaring business day in, day out? There are even Sunday night theme nights these days!

"In the 2017/18 financial year sh73 trillion or more than twice that year’s sh30trillion national budget was transacted across all mobile money platforms. This figure was up 37% from the previous year’s sh53trillion. The figures are not out yet for the last financial year but assuming the same rate of growth, at least sh100trillion moved around all mobile money platforms in 2018/19....

If money can move around faster it stands to reason that there will be increased economic activity, the production, distribution and consumption of goods and services. And this is happening in a time when it is widely acknowledged that there is an economy-wide cash squeeze.

So the nephew on campus can now send a message to his favourite uncle Ben on a Friday night for beer money or you can order for and pay for a cab to pick up your better half and deposit him/her at your location without a word said or a physical exchange of cash or if you are an operator of a night spot you can advertise it online for the cost of only a few megabytes and or probably get a better response than before.

So it’s possible that my wandering friend has come up against the underrated power of the mobile phone, its growing uptake and use that make consumption easier and forced an uncomfortable night in the back seat.

WE ARE CORRUPT BECAUSE WE DON’T PAY TAXES

In recent weeks, those who have been agitating against new taxes, have argued that the government does not deserve their money because it is corrupt to the bone and it will not be unlike throwing good money after bad.

Last week parliament amended the excise duty act which retained mobile money duty but reduced its rate to 0.5 percent and maintained it only on withdrawals. They also retained the tax on social media services, which had attracted a disproportionate amount of noise, given the relatively few users compared to mobile money services.

When the two taxes were initiated, government projected that about sh400b would be collected. 

The downward revision in the mobile money rates will reduce that significantly.

In July after one month of implementation URA announced they had collected sh27b for both.

The opposers of the new taxes point to poor government service delivery, wasteful spending on questionable projects and the lavish lifestyles of poorly paid technocrats as evidence that their hard earned taxes are going to waste.

"First of all as was reported there are only about million out of 11 million workers paying income tax, hence our low revenue collections to GDP of about 14 percent. The sub-Saharan average is a lowly 18 percent...

In sub-Sahara Africa the highest revenue collector is Lesotho with 42 percent of GDP.

Clearly there are too many people not carrying their weight, yet they earn incomes.

And the opposers may have got it backwards. In order to see an improvement of services and a lowering of corruption we need more people to pay taxes not less.

First off, because we pay so little tax in relation to the total economic activity inside our borders government this year will spend sh800,000 per Ugandan, that's the national budget per Ugandan. Of this sh400,00 comes from our taxes and the rest from loans and grants.

The amount government commits to spending is pitifully small compared to the countries we dream of living in, like Finland where government spends the equivalent of sh40m per citizen or Norway sh107m or even South Africa where it splurges sh77m per person.

And when you break down our budget even further, government has earmarked only sh57,000 per person for health, of this only sh20,000 per Ugandan will actually be spent on health worker wages and medicines. 

Clearly we expect too much from our budget. And this is before we factor in corruption.

It is obvious government is working with too little money, trying to spread it all around and doing little effectively.

"Interestingly if you did a cursory comparison of countries’ revenue collections to GDP and
Transparency International’s corruption index, the argument can be made that the countries which pay the least taxes in relation to their GDP are also among the most corrupt in the world...

And the opposite seems to be true, the countries with the highest revenue levels are the least corrupt.

So on the downside of this possible correlation are the backwaters of the world like Chad, Nigeria, Democratic Republic of Congo and yours truly, Uganda, while on the other side of the pendulum you have Denmark, New Zealand, Finland, Sweden and Switzerland.

It makes sense. If you are a country that to deliver services has to rely on its people for revenue, rather than rely on donor monies or huge commodity exports, maximisation of collected revenues to ensure service delivery will be critical.

If you collect people’s taxes and don’t deliver, your political longevity will be that much shorter. To collect more revenues you not only have to tax people adequately but you also have to make sure more and more people, ideally everybody is paying their dues.

But if you are a country like our own, where only one out of 11 million workers are paying taxes, the political noise that the payers may muster can easily be drowned out by the indifference of the non-payers.

Hence you have a situation where MPS, paid through the treasury, decampaign an initiative to broaden the tax base.

It is true, those few who pay taxes are up to their eyelashes in tax. What is needed is for more and more people to carry the burden.

"Taxes is a political time bomb wherever you go. No one wants to pay taxes even in Finland or Sweden. The difference is that in those countries they have the mechanism and political will to enforce tax laws, compliance is not voluntary...

This is not to say there is no corruption in those countries, but because everyone has an interest in getting more value for their money in taxes, this tempers public officials’ greed. Their officials are not necessarily more morally upright than our goons, it’s just that they know that wages of sin are as good as death.

WHY FINANCIAL INCLUSION IS IMPORTANT

During a recent discussion on transforming the economy through industrialisation the speakers did the traditional thing of bashing the “Washington Consensus” for Uganda’s growth, which has come without jobs and with widening income inequalities.

The Washington Consensus refers to an economic model prescribed for developing nations that had as its pillars macroeconomic stability and liberalisation of markets.

Speakers argued to various degrees during the occasion sponsored the Friedrich Ebert Stiftung foundation, that this laissez affaire approach to the economy with the government taking a back seat to the private sector and abrogating its responsibility to direct the economy, was what has brought us to our current economic situation.

Of course they referred to the east Asian tigers and even further back to post-colonial America, to show how  other economies have defied the conventional wisdom to jump out of poverty  into modernisation.

I think they used their facts selectively, not least of all the ignoring or omitting the context in which 18^th century America or east Asian tigers operated to be able to do the things they did, some of which it would be relatively harder to do now.

My argument has always been it is neither neo-liberalism or central planning that is important but delivering an improved standard of living for the people. Whether one does it with markets or with government intervention is immaterial. After all, those same distinctions are political ones that neither the west nor the east follow to the letter...

But in all the neo liberalism bashing and the yearning for a return to state control, neither of the  speakers paid much or any attention to local resource mobilisation. Most especially mobilisation of financial resources.

This is important because history has shown that no country has transformed to a modern one with the use of foreign aid, suggesting that all developed countries became so largely on their own steam.

And it is at this point that the issue of financial inclusion becomes important, even critical.

Financial inclusion presupposes an ever increasing proportion of the population having access to and using the financial sector to carry out financial transactions, to save or use other financial instruments.

Interestingly according to the World Bank our gross domestic savings in 2016 stood at about 15 percent, woefully lower than those countries we want emulate – China 46 percent, South Korea 36.5 percent.

But according to a the most recent FinScope survey carried out in 2013, financial inclusion in Uganda rose to 85 percent in 2013 from 70 percent in 2009.

They make the point that the increase in financial inclusion came with the explosion in mobile money but at the time they also noted that most of the mobile money data represented transactions. This will definitely change when the new survey is out, as people are now actively saving on their mobile phones and accessing credit too.

The challenge of mobilising savings is made all the more difficult when there are no convenient channels to mop up our excess cash.

The expansion of deposit taking institutions, Savings & Credit Cooperatives and now mobile money means it is actually easier than 10 or 20 years ago to mobilise savings.

In more developed economies only about 80 percent of their currency in circulation is in the financial sector while in Uganda it’s the exact opposite. This has far reaching implication for our development ambitions.

If we can get more and more of this money into the financial sector it will grow lending to businessmen if for no other reason that lending rates will become cheaper. The mobilised resources would be put to use by those who need it rather than serving as dead capital under your mattress or in the hole in the ground in the banana plantation.

The issuse of who regulates the telecommunications growing pool of monies will be an ongoing challenge, which needs to be addressed quickly to increase confidence in the sector and grow savings.

"In under a decade the mobile money user accounts have grown to about eight million more than 7.5 million bank accounts. In 2016 it was reported that sh44trillion passed through all mobile money platforms in Uganda. This figure was more than the sh28trillion national budget in that year. And this figure keeps growing....

If you look into the not so distant future, you can see that there could be a real transformation in as far as how much money still remains outside the formal financial sector and what the net effect has been of this giant mopping up of cash has had on the economy.

Clearly it is in our best interest to keep this growth going, seeing as banks are scaling back their operations.

To begin with the government has to maintain macroeconomic stability so that people have the confidence to save but also to attract more investment into the sector. With the proliferation of mobile telephones there still may remain a skewing of financial inclusion towards the urban areas so there has to be more productive policies to ensure rural communities jump on the band wagon – taxes on phones may not be the best long term strategy in view of this.

To push the agenda forward government needs to look harder at the issue of mobilising long term savings. Thankfully it will not be very long and a private sector solution will emerge. A sit is now to have a fixed deposit account for instance banks only have a threshold amount, below which they would not be interested in your money – a few millions.

Imagine if a bank set up a product and sold it as a fixed deposit where people can save any amount for a given period of time through their mobile phones. So if I feel I have an extra one thousand shillings today I can put it on my fixed account, tomorrow sh2,000 the following day sh500 and so on so forth what a revolution it would be?

With modern technology the issue of administration is not a problem and you would be shocked how many people would be able to commit money for a year or upwards if only they had a convenient avenue to do so. A collaboration between government and other stakeholders would be needed to make this possible.

And then of course there has to be a deliberate, systematic and widespread campaign to improve financial literacy. This cannot be understated because often times we are poor or financially distressed for lack of knowledge of what to do with our money.

TWENTY YEARS AFTER MOBILE PHONES CAME TO UGANDA

In the wake of all the brouhaha about SIM cards, my mind raced back 20 years to when the mobile phone really took off in Uganda.

It’s true that mobile phones first emerged in Uganda in 1994 with Celtel, but it really became a necessity rather than a luxury in 1998 when South African based MTN set foot in this town.

There are a lot of things that happened then that most would find hard to wrap their minds around.

Can you imagine that airtime used to be billed in dollars? And that there was something called a service charge -- $10, which was charged weekly? If you didn’t renew it, your phone would go dead – you couldn’t receive or make calls.

Can you imagine that for the longest time you could only buy airtime from the Celtel office on Wampewo Avenue? And this was only from Monday to Friday, excluding public holidays. So if you run out of airtime on Friday evening you were doomed till Monday morning. There was no Me2You. Can you believe the lowest denomination of airtime available was sh10,000?

Even I would find it hard to believe if I had not witnessed it for myself.

That mobile phones are now ubiquitous is thanks to MTN, whose story is an interesting one and one which maps quite well, the changes and changed perceptions around mobile phones in this country.

It all started with local businessman Charles Mbire trooping down to MTN offices in South Africa to make a pitch for the company to come to Uganda. At that time MTN was only in South Africa, content to be a small fish in a big pond. Vodacom was and still is the gorilla in that market.

"The MTN strategists referring to donor statistics – The World Bank reports that our per capita GDP in 1997 was $287, didn’t think Uganda was a good mobile phone market...

But Mbire put his money where his mouth was --- all of $2m, and offered to partner in the venture. Which made them think if a local businessman was willing to take the risk they needed to take a second look.

They eventually came and bid for the Second Network Operator (SNO) License, which they won. As part of the conditions of the license they were required to have rolled out (we were still thinking in terms of physical lines) 89,000 lines in five years.

Today, MTN Uganda reports that it has just under 11 million subscribers but at that time the total number of lines in Uganda stood at 50,000 lines! Or that in 35 years of independence Uganda Posts & Telecommunications (UPTL) as it was called then, had managed to roll out about 1,500 lines a year.

So we thought they were setting MTN up for failure. How would they roll out in five years what the mighty UPTL couldn’t do in three decades?

Well, on day one in November 1998 MTN opened shop. And their main switch promptly collapsed.

The story goes that the 14,000 line switch installed at Mbuya, which was thought would be more than adequate for at least the first three months, crashed under the weight of the new demand. And this was before noon.

And what was the price of SIM card? Sh70,000!!

Long and short of it, Ugandans snapped up those lines like nsenene on a November evening and the 89,000 target was surpassed before the year was done....

A lot has gone on since then that to sum it up with the cliché “and the rest is history” is to seriously short change the story.

Since that first day we started paying our phone bills in Uganda shillings, the weekly service charge was dropped, the lowest denomination for airtime is now sh500 and we discovered texting.

About the sh500 airtime denomination, I remember then marketing manager Eric Van Veen declaring that they may never go below the sh5000 denomination airtime card – they were made of plastic, about the size of a playing card, because it didn’t make economic sense. 

Since then we moved away from voice where, only but ten years ago in 2007 MTN Uganda was reporting an Average Revenue Per Unit (ARPU) of $10,  which has now fallen to $2.11 in 2016.

The action has moved to data service where MTN now has 1.5 million active data subscribers and 5.2 million mobile money users.

As a journalist reporting for a foreign media agency, I used to type or handwrite a story, walk over to the post office to have it faxed. Depending on demand I would have to wait for my story to be faxed after which I would call Nairobi to find out if they had received it. More often than not they transmission would be incomplete and would have to be repeated or just page two and four of a five page fax. And then I would have to stay by the phone at the office in case Nairobi had any questions.

Numbers were hard to come by, but that mobile telephony has forever altered the economy of Uganda cannot be disputed. The anecdotal evidence alone is overwhelming.

Today I could send my story over the phone, having already downloaded background off Google and can even transmit audio and video file, and all in a fraction of the time it took then. Leaving me time to chase other stories. I shudder to think at what my output today would be compared to then. 

This improvement in efficiency and output is mirrored in whatever sector you can think of – manufacturing, transport and general trade. And they say we haven’t even begun to tap the full potential of the mobile phone...

Since that exciting day in November 1998, MTN has paid sh3.7trillion in taxes to the treasury –sh450b alone last year, contributed sh120b to the Rural Communications Development Fund, which is now 2 percent of their gross revenues and It employs thousands directly.

And it has been good business for MTN too, last week they reported revenues of about sh1.6trillion in 2017.

If mobile telephony has become such an integral part of our lives and the general economy, one needs to look to MTN as the trailblazer.

As part of the liberalisation experiment, MTN has to have been the most successful in creating improved efficiencies, increased output and revitalising an industry.

If we can only match the changes that have happened in the last twenty years over the next two decades, I shudder to think how life will have changed by then … no more offices? Ownerless cars? And for the kids? No School?

REDUCING TAXES ON SMARTPHONES IS SMART ECONOMICS

In 1999 Uganda’s GDP growth jumped to 8.1 percent from 4.9 percent the previous year. There was no coffee boom that year. There was El Nino, the freak weather pattern which manifested itself in Uganda as an unusually long rainy season, in 1998 which affected the harvests.

But something else happened in 1998 whose effect rolled into 1999. A second network operator was licensed in 1998 and in 1999 Uganda became the first country in sub-Saharan Africa were mobile phone coverage exceeded the number of land lines.

It was not saying much at the time seeing that Uganda only had 50,000 landlines, but it illustrated the explosion in mobile phone uptake. Essentially mobile users had skyrocketed from about 4,000 the previous year to beyond 50,000 in about 12 months.

So the spike in growth in 1999 was in no small part to the heavy investment required to roll out the network across the country but also, down to the increased economic activity the little gadgets stimulated...

While around that time it was reported that Ugandans were burning the wires talking to all and sundry – each user was earning the networks about $8 per month or about $100 a year, this was not only idle gossip. They were saving time and money finding out about markets, supervising projects remotely and catching up with relatives and friends at less cost to both sides than previously.

Then the only service provided was voice there were no text messages, no WhatsApp and no Facebook.

I couldn’t find any research in Uganda on how much economic activity has been generated as a result of mobile phones and more specifically smartphones, but the anecdotal evidence cannot be ignored.

Businesses are growing up around smart phones.

Numerous goods and services can now be bought off the phone from food to houses to counselling services. Then there is mobile money which in 2016 saw sh44trillion changing hands on all platforms. A figure that continues to grow. This is not only one and half times the current national budget but it is almost half the national GDP.

How do you think this money was being shifted before mobile money?

My guess it only a fraction of these sums were changing hands. Think what it took to get money to the village those days. One would often have to know someone who was going in that direction and then there had to be the happy coincidence that when they were going you also had money on you. 

And when the messenger reached the village he did not necessarily make a beeline for the beneficiary’s doorstep meaning the person may get the money days or even weeks after it was sent or not at all.

What happened when you got home and found that your power had been cut off?

 If you were law abiding you grit your teeth through a candle lit night, go to the bank then go settle your bill at power company and then beg them to reinstall the fuse – which was what they confiscated when you hadn’t paid. There was no guarantee the man with a fuse would reconnect you that day.

And what would happen if you jumped into a cab and at the end of the journey you didn’t have enough money for the fare?

You did surrendered some item in your possession as compensation or as collateral for when you could pay the taxi driver, but in worse case scenarios you might beaten to within an inch of your life or worse.

Long story short. These maybe small transactions but they are economic activity that was not there before and when aggregated is significant and growing every year.

"The growth in internet connectivity Uganda, now at about 30 percent of the population – below Kenya’s 68 percent,  has seen a jump in recent years with the falling prices of smart phones. It therefore follows that a fall in taxes will lead to an increase in smartphone users who can then be exposed to and take advantage of this new economy...

The conservatives will argue that smart phones will only be abused for their social media applications, so why should we forgo revenue for unserious people?

Mobile phones demonstrate the network effect, that a mobile phone becomes more and more useful the more people have one. And the more people have one the more people will get one – a virtuous cycle.

In the early days of mobile phones when they were just a handful of them snapped to their owner’s belts, mobile phones were merely a status symbol – people used to walk around with them even when they had no credit or the battery was flat, just to be seen.

Today a mobile phone is not just a necessity, it is  an appendage to ourselves. No one leaves home without their mobile phone. It would mean being out of touch, unreachable by your business partners or unreachable from your bosses at or from the interviewer for your next job.

And its not the most radical tax reform we have done in recent memory.

In the 1980s at time when we need every penny we could get as a country, we scrapped taxes on coffee exports – which accounted for at least seven in every 10 shillings in revenue the government collected. The leap of faith was taken because it was believed the sacrifice would stimulate coffee exports and pay off in higher exports, more jobs and higher hard currency earnings. Even then there were loud naysayers and prophets of doom – mostly older technocrats who couldn’t fathom a country without the coffee export tax (where are they now I wonder).

They say that a normal phone has more processing power than the computers that put a man on the moon in 1969. Smart phones have multiple times more processing power than a non-internet enabled phone has. Imagine how that economic activity that a phone connected to millions of other phones can unleash?

DATA IS THE NEW SLICED BREAD

In his first press interview in 2010 after taking over the helm of Kenyan telecommunications firm Safaricom, CEO Bob Collymore said that in the future voice services will be an add-on – will be given away free. That data services is where the money would be.

He has been proven right several times over. While revenues from mobile data have not yet outstripped revenues from voice services it is just a matter of time.

Last year data revenues grew by 46 percent compared to voice revenues which grew by just over one percent. And you are not even talking about revenues from mobile money, considered data services, which on their own grew 34 percent last year. Data and mobile money revenues came in at Kshs39b (sh1.2 trillion) and one can expect they will soon outrun voice service receipts, which stood at Ksh46b last year. The company’s total revenues came in at just under Kshs100b last year.

Compare this with the Kshs3 billion data, M-Pesa and SMS revenues brought in 2010, against a company revenue of Kshs84b then.

It is no wonder then that in our own market discussion over data services has been kicking up dust in recent weeks.

Earlier this month telecom company MTN announced a new data offer that while raising the cost expanded what subscribers could do with the service.

The regulator, The Uganda Communications Commission (UCC) took issue with the rate changes arguing that all such changes must be past by them first before being offered to the public.

MTN argued however unlike a tariff – a cost of service that all mobile users are affected by, an offer is optional with subscribers taking it up if it suits their needs and therefore they had no legal obligation to inform UCC in any change it may choose to make.

As with most of such spats it is often that each has a point and a seat down around a table would bring the discussion to a happy middle ground.

"It does not take a rocket scientist to see with more and more people hooking up to the net via their mobile phones, tablets and laptops that Collymore’s prophecy will come through in our market.The fact that some telecom companies have decided to curve out a niche for themselves in data provision and not voice is another pointer....

The point too can be made, that you don’t hear the regulator complaining about similar offers on voice services which are being launched at every turn.

The context for the regulator’s concern is not misplaced, if data services are to get wider adoption.

Clarity in the sector is needed sooner than later seeing as data services are going to be a major driver of growth in coming years.

At the beginning of the month a law allowing for agency banking came into force. Under the law banks will be able to contract retailers, petrol stations and other businessmen to help the collect deposits and pay out monies from their clients’ accounts. Advancements in communication technology, more specifically data services, means this service is more easily available now than even five years ago.

The various uses to which data services can be employed are already being seen --- transport and logistics management, financial services, health and educational services.

For a society that likes to talk a lot, it may be hard to wrap our minds around the revolution that data services herald, but they will come with or without our understanding of the subject.

Think of it like the paradigm shift that came with the invention of the printing press, which took the written word out of the exclusive enclaves of royalty and the monastery to the everyday man. What this meant is that information’s storage and distribution was no longer the preserve of a select few. It actually diffused their power, led to the downfall of kings and queens and the rise of democracy and also other kinds of despots.

Data services will ensure the storage of information within easy reach of every one with access to the net, as well as the rapid transmission of that same information.

Think of it.

Small businessmen, like consultants had to saddle themselves with getting physical offices to not least of all house their telephone, fax machines, the petulant receptionist and generally look serious. 

"Data means that when you really boil it down to the bare essentials, a physical office is fast becoming redundant for certain sections of the economy...

This is important because down history wealth has accrued to people and societies that had knowledge --- distribute it and employ it for their benefit. Now with the democratization of communication things are set to change, hopefully for the better. More and more people will have a shot at social climbing than ever before.

Already The Economist magazine has already announced that data is the new oil, coupled with Collymore’s prophecy and one can see why the battle lines are already been drawn around data.

Whereas it was the UCC seeking clarification on the matter, one can expect market leader MTN, which for its own very survival needs to dominate the data space will be the target of a lot of competitive action from its market rivals above and below the table.

We can expect more of these kind of spats in coming times as competitors, both existing and yet to come jostle for position in this new market of the future.

Watch this space.

IT’S EASY TO PREDICT THE FUTURE, WATCH THE INTERNET

It is that time of the year again when we try to peer into the future to make out what is coming and to plan for it. An exercise in futility. But fun nevertheless, especially when at the end of the year you realise how off the mark you were.

But a useful trend to monitor in attempting to understand coming events has to be the development of the internet.

I am no internet expert, my use of it being restricted to how it helps in my everyday life – my work and my leisure.

Fortunately or unfortunately, I am old enough to have seen it develop from the early days when its symbol was the noisy, screeching sound of a table top modem, to the much higher speed of satellite connectivity, to the current optic fibre cable enabled internet. All in the space 20 years.

But the internet first came into my consciousness much earlier.

My father returned from Canada with tales of a computer system, which could make computers distances apart communicate with each other. Exchanging volumes of information in hours even minutes (well the alternative was the postal service!).

This was 1984.

We still had a black-and-white TV. Video decks were a novelty. Computer games were run off cassette tapes. And mobile phones were restricted to sci-fi cartoons.

The story goes that the internet was developed by the US millitary as a secure means of communicating internally. Academia found some use for it and it really gained traction in the wider community with the creation 25 years ago of the Wide World Web --- what we know as WWW, a system for cataloguing information, making the internet easier to navigate.

At this time there were a few hundred computers connected to the internet, but barely a decade later 16 million people were online. Today almost three billion or half of the world population are on line.

"The internet long hit its tipping point. It is now riding on the rapid uptake of mobile phones in the underdeveloped world. At the rate at which internet connectivity is increasing it will not be stretching the imagination to say that with a decade we will all be connected as the cost of mobile technology and connectivity plummets...

The power of networks is that, the sum of the whole is much greater than the sum of the individual parts. In a functioning network one plus one is not two, it is eleven.

That has been the story of the internet. The more people that log on annually, improves efficiency, reduces the cost of doing business and is unlocking value in places that were previously written off as god forsaken wastelands.

And just when we think it has reached the outer limits of its innovation than another leap of faith is made.

A few years ago a thing called the cloud was the rage.

Essentially, that as long as you have connectivity you can shift all your data off site. So for instance instead of managing servers in your office with all the attendant costs you outsource that function and only need internet connectivity to the site where your data is stored. It is actually more involving than that.

But a spinoff from this what is being called the internet of things (IOT). That increasingly machines are talking to each other. That from my desk at the office or from my phone in the car I will be able to turn on my security lights, regulate the temperature in my fridge or open the door to an expected guest.

That is at a very basic level.

Google already has a driverless car. In advanced stages of development are devices so small that they can be injected into your body to zap cancerous cells or roam around monitoring the state of your health and beam back the results to your computer, phone or watch. Maybe even diagnose your condition if you are sick.

How do we adapt to this brave new world?

The challenge is that we are operating with incomplete information. Our best guestimates of how the world will change from year-to-year or decade-to-decade is guaranteed to be wildly off the mark.

We were the first class to use calculators in O-level. Previous generations thought this would hurt mathematics. Now it’s normal for primary school kids to use calculators. Maybe that’s why As are going out fashion at every level of education.

We have to embrace these changes. You think you are already with the program? Believe me you can embrace it even more. If you won’t you will be found obsolete faster than you can reach for a dictionary to see what that means.

Look around our offices, the number functions whose importance has been reduced or removed altogether.

Where are the typing pools? The typesetters?  The proof readers? The bookkeepers?

"It is clear that manual labour is being taken over by the machines and the internet is at the center of this creeping revolution...

Just like I could not wrap my little mind around the concept of the internet 30 years ago, it is that much harder to try and conceive how the internet will have changed the world in the next three decades.

So in 2015 I will be joining my sons as they watch sci-fi cartoons, I hope you do so too.