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Social media for Ugandan regulators

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COMMENT: By David Birungi 

The slippery road to creating awareness and mandate without the benefit of a guard rail

Stanbic bank’s recent announcement of their mid 2016 unaudited financial results included a declaration of a 57% growth in profitability. This comes on the heels of media frenzy about demands for bailouts by some struggling Ugandan businesses. The government has insisted it will not release the cash for this.

In early 1990s when government pulled out of business, leading to the controversial Stanbic acquisition of Uganda Commercial Bank, the move was intended to let the market allocate resources more efficiently. That is how we are here now with a profitable large bank that has been prudently managed under a sound regulator in Bank of Uganda.

The privatisation process required the government to strengthen the regulatory function by setting up entities that would ensure equity, fair play, and a good return on public good.

In sectors where they did not exist, many regulatory organisations been created and they include; the National Planning authority, Uganda National Roads Authority, Uganda Revenue Authority, Electricity Regulatory Authority, Dairy Development Authority, Equal Opportunities Commission, Uganda Communications Commission, and many more.

The progressive regulators have utilised social media to create awareness about their mandate. A few retrogressive ones have shied away.

For the novices, social media can be cruel, irresponsible and damaging. Regulators stepping in this space must be prepared to keep a fair and lawful arms’ length with the private sector they regulate.

Previously, regulatory agencies would buy time to prepare responses, some guarded, to some of the contentious issues in the spaces they regulate. Social media removes the guard rail. Once the agency goes social, it must remain the undisputed fair regulator it is supposed to be.

Information coming through the social media channels of any regulator must be above reproach, foster equity, and guarantee information symmetry to the public. Some have made great strides, of course after a few falls, yet some are yet to grasp this simple fact.

In early February, the Central Bank of Kenya (CBK), while placing the closed Chase Bank under receivership blamed “inaccurate” social media reports about the bank’s cash position, and the hasty changes in management that triggered off the social media frenzy in the first place.

It later turned out that CBK was willing and had allowed the owners time to salvage the bank from management wrangles that had their origins in non-compliance with insider lending regulations.

A month later, the Bank of Uganda had to come out twice in less than seven days to dispel unfounded rumours of an unreal threat about closing Barclays Bank and to announce the Exim Bank smooth takeover of Imperial Bank. Bank of Uganda must be applauded for surmounting the ruthlessness of social media to ensure stability in our banking sector during this period.

Then in June, the Uganda Revenue Authority Commissioner General found herself in a spot of bother for the unfair administration of tax on gifts. While she agreed that gifts above Shs5 million are taxable, she went mute when it was put to her that URA was reluctant to tax the Shs5 million shillings gift the president handed over to newly elected MPs to hold victory parties.

The Authority arranged a public dialogue on twitter without sufficiently preparing for the ruthless and sometimes unforgiving empowered online audience.

On July 19 the judiciary also slipped and fell when it tweeted: “Police Cane-squad in court today”. The suspects are yet to appear in any court, be it Makindye Magistrates Court. Such passed incidents may have gone unnoticed to many people but they are clear demonstration of the slippery road walked by handlers of such accounts. Many of them must be assisted to separate their emotions from their regulatory work.

The National Drug Authority (NDA), which is recovering from a leadership vacuum, has taken a more cautious approach. Much of the information shared on their social media handles focuses on creation of awareness about substance abuse among school going children. They have roundly avoided the controversial debates on substandard drugs in our dispensaries, and growing self-medication.

The electricity sector is even more interesting. The Electricity Regulatory Authority (ERA) sits on a pedestal to ensure a fair power price that spurs effective power demand. The regulator must also allow a good return on investment for players, and safety of the public and the national grid. Up to now, ERA has done a commendable job in regulating for this.

We have seen tweets by ERA announcing outages to western districts even when operators have provided alternative power to would be affected customers. Some gaffes have included an invitation for complaints like the on Aug. 4 tweet to “Anyone still suffering a blackout resulting from yesterday’s heavy pour?” This blurred the complaint resolution mechanisms established by law for power companies to follow.

The framers of regulatory statutes did not envisage the arrival of social media which makes prescribed communication channels like “a newspaper of nationwide circulation” obsolete.

Many regulators now issue guidelines using social media. They must, however, lead the efforts to improve such obsolete statutes and prepare to take the bitter sweet fruits of being on social media platforms without blurring lines of fair play.

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David Birungi is the manager Digital Media Services at UMEME

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editor@independent.co.ug

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