The combination of mobile phone technology and the internet has had a transformative effect on many parts of Africa. By leapfrogging the landline stage of telephone development, a host of services, particularly banking, have brought economic and social gains.
Which is why it’s sad to see the Ugandan government introducing a social media tax, with predictably damaging consequences. Following a series of protests against his leadership, Yoweri Museveni, Uganda’s president since 1986, instituted a daily tax of 200 shillings (4p) on anyone using one of 60 social media sites, including WhatsApp, Twitter, Facebook, Skype and Uber. This was apparently to prevent Ugandans from taking part in “idle gossip”, as well as boosting government coffers.
Unsurprisingly this policy has had disastrous results with the Ugandan Communications Commission announcing, ironically on Twitter, that internet subscriptions had declined by 2.5 million users. And the number of people paying the social media tax fell by 1.2 million. And crucially for a country that relies on phone banking, the value of mobile money transactions fell 24 per cent, or 4.5 trillion shillings ($1.2m). The policy caused a backlash online with internet users uniting under the hashtag #ThisTaxMustGo and protests also spilling out onto the streets. The use of VPN’s (virtual private networks) to shield a user’s location has increased.
“The tax has not generated the revenue the government anticipated” Irene Ikomu, a lawyer based in Kampala, told the Guardian. One businessman who sells data in the capital has had to lay off workers and a mobile money agent said she had lost business because of the levy.
Africa already has the most expensive internet in the world. The UN Broadband Commission’s target is for 1GB of data to cost no more than 2 per cent of average monthly income. In Africa it is 8.76 per cent, far higher than Latin America and the Caribbean at 3.58 per cent and Asia at 1.54 per cent. In the three most expensive countries, Equatorial Guinea, Zimbabwe and Swaziland, 1GB costs more than $20.
Considering small businesses with access to the internet grow twice as fast as those that don’t, African governments should be seeking to drive down the price of internet access, not making it even more expensive by taxing it.
The obvious way to do this is to boost competition. The greater the number of rival firms offering internet services, the cheaper it is. In African countries with only two mobile networks, the average cost of 1GB of mobile data is $13.03. In countries with three providers it drops to $9.17 and where there are four it falls to $5.25.
Worryingly there is a growing trend among some autocratic regimes in Africa curtailing online freedoms as a way of silencing dissent. It now costs $900 a year to register as a blogger in Tanzania. Egypt has blocked numerous websites, banned calls made via social media apps and even proposed a state-owned Facebook platform. Thankfully there have been successful cases that have seen such attempts reversed. In Kenya video bloggers were told they would need to pay $280 a year for a licence with punishment of five years in jail for those in breach before a backlash forced a U-turn. In Benin a social media tax was scrapped after ten days of protests.