The IT Industry in Uganda: General Portrait

by Dan Irascu

The IT Industry in Uganda: General Portrait

Uganda’s ICT sector was worth an estimated $5.48 billion in 2017, constituting 31.7% growth from 2016. The telecommunications segment makes up the vast majority of this at around $3.2 billion. Other important contributors are broadcasting, data center services, cloud, IT, and BPO.

Uganda’s combination of relatively stable governance, strategic location, and young and innovative population has made it an attractive destination for multinational companies. Several notable firms such as Google, Microsoft, or SAP have offices in Kampala, and some have based their entire African operations from these offices.

Why you should work with Ugandan IT companies

Digital service providers in the cloud and BPO markets are largely involved in the provision, rather than the development, of services, whilst Ugandan firms are more prevalent in the fintech and eCommerce markets. The physical technology required for the delivery of digital services is typically imported, and it is not clear that Uganda could produce these products more efficiently. 

A key strength in the digital services market is the acceptance of mobile services. Any consumer solution entering the market would have to be mobile-compatible. Mobile healthcare services are expected to grow particularly rapidly as the sophistication of these offerings increases.

What to pay attention to when working with Ugandan IT companies and web agencies

On the consumer side, it is vital that any proposed digital service offering be mobile-compatible due to the prevalence of mobile usage in Uganda. Furthermore, smartphone penetration in the region is steadily increasing, thus increasing the sophistication of viable digital service offerings. 

Given the acceptance of fintech by the Ugandan population, a possible route to entry in the consumer market is to acquire one of the many smaller fintech firms in the industry. This would resolve some of the primary barriers to entry, most specifically bureaucratic red tape and a lack of local knowledge. 

On the corporate side, the most effective route to entry is likely through partnerships with smaller local resellers. This model is already popular in the Ugandan market. A key differentiating feature here will be how well the service adapted to the Ugandan market

How reliable are Ugandan-based IT companies?

Considered to be one of the biggest African IT hubs, Ugandan web agencies and IT companies compete only with Ethiopian ones in terms of reliability. As many foreign companies have already invested and thus developed the local IT infrastructure and industry overall, Ugandan IT companies find it easier than other neighboring countries to enter the global market and provide their services for accessible prices. 

How does the Ugandan IT industry relate to the neighboring countries?

Uganda is actively trying to establish itself as a key ICT hub in the East African region. The country appears to be making good progress in this regard, helped by having a strong connectivity infrastructure and a young, innovative population. Despite this, the country currently faces considerable political uncertainty, and issues surrounding the transparency of tenders remain a major barrier to growth.

Although Uganda’s score for the metric measuring the economic impact of ICT is not high in absolute terms, it ranks 54th in the world. This supports the conjecture that businesses, government, and consumers will be receptive to new technologies as ICT has already had a substantial impact on the Ugandan economy.


How will ICT Impact Uganda in 2022?

Uganda has lost one of the telecom investors and operators on the market - Africell. The change has an immediate effect on the labor market and telecom industry. The reasons behind leaving Uganda is in limited possibilities the country offers to the telecom operator. For Uganda, 2022 is a challenging year in ICT with a low internet penetration rate, tech education, and, competitivity. 

Dan Irascu

Head of Marketing

Researching, analyzing, and writing insightful stuff is what I do for a long time now at Mobiteam. At TechBehemoths, I put all my experience and knowledge work for IT companies and businesses and help them reach each other.