Though loosely regulated and informal, eCommerce continues to rapidly grow in Uganda due to the widespread use of “mobile money” (telephone-based financial transfers) and the rapid growth of mobile phone usage. While there are 23.5 million bank accounts in Uganda, there are 27.5 million active mobile money accounts.
In May 2021, Uganda’s central bank, the Bank of Uganda, took over regulation of all payment systems, including FinTech and mobile money transactions. The Bank of Uganda has broad oversight authority, including the power to block eCommerce and mobile money transactions when it deems necessary. The bank generally cautions against transactions using cryptocurrencies, warning that some of these could be scams.
B2B/B2C sellers typically market their goods and services online, with consumers and sellers connecting first by phone and then by physical meeting. Payments are typically made in cash or by mobile money transfers. Although shopping directly from a website is a relatively new phenomenon in Uganda, it is fast growing. One key advantage for eCommerce in Uganda is the expanding middle class with a growing taste for U.S. consumer items (regarded as being of superior quality than those from China and other countries). Young people (18 to 30) constitute the bulk of online sellers and buyers.
Advertising in Uganda’s eCommerce market remains largely unsophisticated and is mainly limited to social media platforms. WhatsApp, Instagram, TikTok, and X (formerly Twitter) are the most used online platforms in Uganda. A government ban on Facebook remains in place since the January 2021 elections. As a result, internet service providers operating in Uganda block access to Facebook, but the platform still receives heavy traffic from Ugandans with access to virtual private networks (VPNs).
Ugandan law provides for the protection of intellectual property rights, but enforcement mechanisms are weak. The country particularly lacks the capacity to prevent piracy and counterfeit distribution. As a result, theft and infringement of intellectual property rights is common and widespread. Uganda does not track seizures of counterfeit goods or prosecutions of intellectual property rights violations.