While digital payments are transforming financial systems across Africa, Ugandans face significant hurdles in adopting these technologies. Poor internet connectivity, unreliable mobile networks, and subpar customer service are the primary barriers to using digital payment platforms for everyday transactions, according to a new report by AfricaNenda, the Economic Commission for Africa, and the World Bank.
Despite the growing importance of digital financial tools on the continent, where mobile money solutions have driven financial inclusion and cross-border trade, Uganda lags behind. Although 61% of Ugandans use digital financial services, most rely on basic feature phones, primarily for purchasing airtime and saving money rather than making payments for goods, services, or peer-to-peer transfers.
Unlike other African nations where smartphone-based digital payment apps are gaining traction due to their reliability and functionality, over 75% of Ugandans access digital financial services through USSD codes. These codes, which work on feature phones and require minimal network connectivity, are a lifeline for basic financial services but limit users to simple transactions such as airtime purchases.
In contrast, neighboring countries like Kenya have seen a broader adoption of mobile money services for transferring funds, paying bills, and conducting business transactions. This disparity is largely attributed to Uganda’s lower mobile network coverage and internet penetration, which stand at 31% and 30%, respectively, according to the International Telecommunications Union (ITU).
The report highlights Uganda’s inadequate mobile infrastructure as a critical barrier to digital payment adoption. With internet penetration significantly lower than regional peers, many Ugandans, particularly in rural areas, are excluded from the full spectrum of digital financial services.
“Complete lack of or limited internet access is a significant access barrier for surveyed non-users, especially in Uganda,” notes AfricaNenda.
Smartphone adoption, which is essential for accessing more advanced digital payment platforms, remains low. In contrast, countries like Kenya boast higher internet penetration and smartphone usage, driving the widespread use of mobile money for diverse financial transactions.
The challenges facing Uganda’s digital payments ecosystem underscore the urgent need for investment in mobile network infrastructure and internet access. Expanding coverage and improving network reliability could unlock the potential of digital financial services, enabling more Ugandans to participate in the digital economy.
Until these issues are addressed, many Ugandans will remain limited to basic mobile money functions, unable to fully leverage the benefits of digital payments that have become a cornerstone of financial inclusion and economic growth across Africa.
As digital payments continue to reshape financial landscapes, closing the connectivity gap in Uganda will be crucial to ensuring that no one is left behind in the continent’s digital transformation.