Uganda's AI opportunity: A catalyst for inclusive growth

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OPINION

By Samuel Kalule Kibirige

Uganda is a nation of vibrant entrepreneurial spirit, with micro, small, and medium-sized enterprises (MSMEs) forming the backbone of its economy. These businesses account for over 90% of the private sector, contributing an impressive 75% to the national GDP and employing millions. However, a significant portion of this workforce, particularly the youth, finds themselves in the informal sector, often in low-productivity jobs with little to no formal protection.

As of recent data, a staggering 88% of the employed population in Uganda works in the informal sector. This reliance on informal work, with its inherent vulnerabilities, highlights a pressing need for innovation. Challenges such as limited access to finance, a significant technology gap, and a lack of formalised business records have created a chasm between the potential of Uganda's youth and opportunities for sustainable work.

Bridging this gap requires innovative thinking, and at the heart of this innovation lies Artificial Intelligence (AI). Instead of viewing AI as a complex, niche subject reserved for tech specialists, it's more effective to approach it as a powerful problem-solving tool. When we lead with a challenge like the difficulty small businesses have in accessing credit, AI emerges as a practical and accessible solution.

As Hon. Monica Musenero, Minister for Science, Technology, and Innovation, recently stated, "We are witnessing the first industrial revolution that Uganda is actively part of. This is our revolution!" It’s not about becoming an expert in algorithms; it’s about leveraging existing, user-friendly AI applications to solve real-world problems. For fresh graduates and non-technical people, this shift in perspective is crucial, as it demystifies AI and highlights its potential for growth and employment.

A primary challenge for many small businesses and informal traders is the lack of a credit history, which makes it nearly impossible to secure traditional loans.

However, AI provides a solution through alternative credit scoring. For example, several online money lending platforms in Uganda leverage AI to analyse a user's smartphone data, such as their mobile money transaction history and mobile line tenure. This data allows the AI model to accurately assess a person's creditworthiness.

As a result, individuals who were previously excluded from the formal financial system can now access micro loans, enabling them to invest in their businesses. This not only boosts the profitability of small businesses but also creates a more inclusive financial ecosystem, empowering entrepreneurs who were once overlooked.

Another powerful application of AI is in the healthcare sector, where it is being used to address critical health challenges. A notable example is Matibabu, a Ugandan AI-powered mobile device that diagnoses malaria without a blood sample. The non-invasive device clips onto a person's finger, and its AI-driven algorithms analyse the light to detect the presence of the malaria parasite.

This technology is a game changer for non-technical community health workers, as it provides a quick, accurate, and bloodless diagnosis in rural areas. By enabling rapid and accessible healthcare, this innovation not only improves public health outcomes but also creates new employment opportunities for individuals who can be trained to use and manage such devices in their communities.

These examples illustrate that AI is not a far-off fantasy, but a tangible reality transforming livelihoods. For Uganda, AI agents and generative AI can be used to create personalised business plans, manage simple accounting for small business owners, and generate marketing content. AI-powered chatbots can handle customer inquiries for a market vendor, freeing them up to focus on sales.

Code-generating AI can assist aspiring developers in creating applications for local needs without needing a deep technical background. The key is to start with the problem and then use these powerful tools to build a solution. By focusing on a problem-solving approach, Ugandans can harness the power of AI to uplift the entire informal sector, creating a new generation of opportunities and prosperity.

The writer is trained in Engineering Science and Technology Entrepreneurship