Dr Muhumuza: Financial Inclusion Hinged on General Economic Empowerment of People

Renowned academic and policy expert Dr Fred Muhumuza has advised government to seriously work towards economically empowering all Ugandans as one way of enhancing financial inclusivity. 

He made these remarks in response to Bank of Uganda Joseph Mubiru memorial lecture that was held under the theme “The role of financial innovation and in scaling up growth in Uganda” at Kampala Serena hotel on Thursday.

Muhumuza said much as there has been a breakthrough in the number of financial services on the local market courtesy of technological innovations, they alone are not a measure of financial inclusiveness given the fact that a large cross section of Ugandans are too poor to use them. 

As a matter of importance, he says that government must devise brilliant economic strategies aimed at greatly improving the incomes of all Ugandans for this important milestone to be achieved.

“These are financial matters, if you have no finances then personally you have no business in the financial markets. You see, the financially excluded is stagnant at 22% and some of these people it does not matter whether the technologies are there, they literally have no money. So we need to be discussing the question of how do we raise people’s incomes so that they have money to enter the financial markets,” he explains.

In relation to this,  he says that this is reflected in the usability patterns of financial technologies which he says is still appallingly low given the fact that majority of Ugandans simply use these tech services occasionally.

His words re-echo Professor Benno Ndulu’s words on Thursday at the annual 26th Joseph Mubiru annual lecture.

While addressing participants, the emeritus governor of bank of Tanzania said that whereas East African countries notably Uganda, Kenya and Tanzania have made great strides in financial service provision and innovation is concerned, a lot still desires to be done as far as universal access is concerned.


For this to happen, Ndulu says regional governments should consider incentivising the use of such services through absolving them of excise taxes which he says are likely to discourage citizens from fully utilising them in the long run.

“This great success has gathered momentum there is an appearance of money flowing and the temptation to tax it like hell……By overtaxing this set of services, you are killing or discouraging this set of services and undermining the tax base,” he explains.

This he says is the only way Uganda can scale financial inclusion without disenfranchising any citizen no matter the strata. 

According to Uganda Communications Commission quarterly report titled “post, telecommunications market and Industry Quarterly report of 2018”, as of June 2018, an estimated 22,733, 823 Ugandans were using mobile money subscription. 

The same report also puts the number of mobile money agents all over the country at 166, 194. 

Additionally, an estimated 18,502,160 Ugandans were using the internet according to the Uganda Communications Commission (UCC).


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