Before I arrived to Uganda, I had been working with some ideas. An attempt to inspire new approaches and unconventional solutions.
A few facts about Uganda:
- Population: 36 mio
- People with sanitation: 12 mio
- People with electricity: 3 mio
- Life expectancy: 57 years
- Dominant religion: 84% Christianity
- Literacy rate: 67%
- Fertility rate: 6 children born pr. woman
And the finances:
- Total tax revenue: 8 trillion shillings (US $3 Bn)
- Estimated black economy: 50% of GDP
- Fake notes in circulation: > 3 trillion shillings (US $1 Bn)
In addition to all these somewhat saddening facts, surpricingly enough mobile penetration is extremely high and the Ugandan telecom system offers Mobile payments. Real mobile payments - transanctions between phone subscriptions, excluding the banks completely from the equation. They call it Mobile Money. This is primarily used by the broad, poor population, and most of them do not hold bank accounts.
- Mobile subscribers: 17 mio
- Mobile money transactions: 22 trillion shillings (US $8 Bn)
Uganda has lots of problems. We know that, they know that. It almost seems like the ones who knows this better than anyone, are the ones stealing all the money.
And here is what we do:
Hey, Uganda - why don't you just build more schools and sewers and make electricity available to everyone, - just like we did in Europe? We'll lend you the money, if you buy our toilets, employ our engineers and sell us your powerplants (we think it is going to be a goldmine).
It is a rude selfish offering, disguised as generosity!
It simply doesn't make sense to increase the national debt, without growing the local businesses. Neither does it make sense to blindly repeat all our mistakes, when they have the option to skip them all together.
They don't have the money to take on any real tasks on their own, regardless of how much it makes sense and they also want to. However, if they could increase their tax revenues and limit the financial corruption, then maybe ...
To get anywhere, I decided to focus on these challenges:
- difficulty in taxing the broad population
- limited access to education and information sharing
Here is what I came up with
- Provide free internet in the entire country.
- Build a digital education system, with a few educational hubs for specialized classes.
- Introduce real-time transactions based taxation and remove all deductions and current taxes.
Free internet is simple. Free means free. Free for everyone. It costs a penny, but we'll get to that. First, think of the media value - everyone will look in awe. Then they will come. Most will bring money. Some will stay.
Almost everyone who needs to learn, already has access to a mobile phone. If we give them free access to the internet, we can reach them and teach them. All study material is available online. When appropriate for your education, you will contribute to developing and maintaining the new educational system and Senior compendium includes creating study groups for the youngest students.
Building a few educational hubs costs a fraction of regular schools distributed across the country. The hubs are open for external teachers and free to attend whenever you can to balance out survival and education.
In my opinion this is an opportunity to build the educational system of the future. It could be implemented throughout the entire 3rd world. People will help. Open source is already here and this is what it is meant for.
Ok, so we need some money to get started. My guess is, there is EU and possibly UN financing available for a project like this. And then there is the tax.
Introducing a real-time financial transaction based tax across the banking and mobile sectors (all electronic financial transactions) of about 5%, would multiply current tax revenue, given the available numbers are credible.
It is a complete replacement for all current taxes and deductions no longer makes any sense. Let cash be tax free for an easier transition, but stop producing new coins and notes. The modern way of making financial transactions for purchases already exist and has a broad market penetration even among the poor.
A real-time transaction based tax implemented like this will remove the need for tax related administration (both public and private) and make it a lot harder for the black economy to thrive. Tax ovation is practically impossible as taxes are paid automatically and instantly on every transaction you make. It really is very simple.
The free internet and the online educational system, is the incentive the population needs to pursue the digital revolution willingly, and thus the reason it can succeed. A taxation plan like relies on a digital population.
Even after building a revolutionary educational system and providing free internet, there is likely a penny left for investment in additional infrastructure. Spend it wisely.