Can Uganda go fully cashless and digital?

I am seated in a restaurant, eating as I read about Uganda’s 10-fold growth strategy on my mobile phone.

We aim to transform Uganda’s economy from $50 billion to $500 billion by 2040, focusing on four key sectors: agro-industrialisation, tourism, mineral development, and science, technology, and innovation. It’s such a nice and ambitious one. Every Uganda needs to be told about it like the PDM (Parish Development Model).

In its blueprint, there’s a need for government to mobilise revenue domestically. Oneidealingersonmy mind: to go this way, Uganda needs to go cashless and digital so that financial/ economic transactions are detectable and curb informality.

As I’m there, a small argument begins between a cashier and a client. The issue? “Boss, I only have mobile money, I can pay on MoMo,” says the client.

The cashier sighs, scratches his head, then fishes out an old Nokia, its screen barely visible.

“Network is down and boss doesn’t accept MoMo payments,” he grumbles. This small exchange captures a bigger question: Can Uganda truly go cashless, digital, and finally bring the informal sector into the financial system? What’s the answer?

Quickly, it’s not just in the technology. It is in the culture, policies, the willingness, and mindset shifts. You see, as Ugandans we love cash. From street vendors to market traders, boda boda riders to landlords, embezzlers, cash is king.

This attachment stems partly fromdeep-rootedinformality. Alarge deal of Ugandans operates outside the formal economy. Cash transactions leave no digital footprints. This also makes tax obligations easier to ignore and financial inclusion harder to achieve.

Times can and are changing. Mobile money services, online banking, and digital payments are growing. The pandemic had accelerated the trend, but we bowed out fast. Could we look at it (digitalisation) as a golden opportunity; to widen the tax base, increase financial transparency, and improve economic efficiency.

Money doesn’t make noise when it’s even digital. It doesn’t even like noise. The road to a cashless Uganda is not just about switching from paper to pixels. It’s about building trust, infrastructure, and incentives.

A cashless economy to thrive, digital infrastructure must be reliable, fast, and accessible. Uganda’s internet penetration stands at around 30%, with smartphone usage growing steadily.

However, network disruptions and high data costs make digital transactions frustrating. We need to invest in broadband expansion, reliable 4G and 5G networks, and cheaper internet will be crucial. Public Wi-Fi in markets and trading centres could also encourage adoption. Efficient investors in telecos, please come quickly to Uganda, it’s becoming so favourable to invest here.

Leave alone the naysayers. People follow convenience and incentives. If digital transactions are made cheaper, faster, and more rewarding than cash, people will switch. Some suggestions here; lowering transaction fees on digital payments to make them more attractive than cash; incentives for businesses that accept and promote digital payments; loyalty programs, where frequent digital transactions earn rewards, cashback, or discounts; tightening controls on large cash transactions such as requiring businesses to pay suppliers digitally.

This would gradually reduce cash dependency. But for the wananchi to go cashless, every citizen must have access to financial services. Our current financial inclusion rate stands at around 78% and only in urban areas.

Many remain unbanked, especially in rural areas. Financial institutions need to rethink their approach. The formal banking system still feels elite, with high fees, complicated paperwork, and intimidating branches.

Imagine me from Nyamiyaga and the bank asks me three referees, a utility bill, and a land title to open an account. The informal sector, which contributes nearly 50% of Uganda’s GDP, prefers cash because it avoids regulations and taxes. Digitalisation offers a nice alternative: formalisation!

Simplification should be seen as a benefit not a punishment or for it to be abused. This could serve as inspiration. Digital payment data can also help banks assess creditworthiness, allowing informal businesses to access loans without collateral. Imagine my chapati guy getting a micro loan just based on his digital sales history.

No land title needed. But we need to trust the system and put measures to curb online fraud and cybercrime, so they don’t sustain the growing concerns. Phishing scams, fake Mobile Money messages, and digital wallet hacks can shake confidence.

We need stronger cybersecurity laws, public awareness campaigns, and digital ID verification. These could be linked to secure digital wallets, reducing fraud risks. The journey is not overnight.

It requires a blend of policy reforms, infrastructure investments, and cultural shifts. It’s not just about going digital. It’s about unlocking economic potential, achieving the 10-fold growth vision.

The author is a concerned citizen.