PDM: How technology went from good to bad

As a first time user of the app, Mr Ngobi was told by his Sacco leader that the money had been wired “in the traditional way as mobile money” on October 3, last year. He, however, did not get a notification in the form of a text message of any money received.

First, he sought assistance from a random mobile money agent for help but in vain. He later turned to nearly everyone else, from his Sacco to district authorities but the said money could hardly be extracted nor traced.

During a recent baraza, a distressed Ngobi and several other residents, who described themselves as “not tech savvy” expressed dismay at the surprise shift from receiving their Parish Development Model (PDM) funds via banks to the Wendi app.

According to multiple reports, Kaliro District in Busoga Sub-region in eastern Uganda is one of the hardest hit by breaches—scamming and hacking—of the e-money platform that the government owned PostBank Uganda Ltd first unveiled last July, as a partnership with a local telecommunications company, and launched later in November.

The breaches continue to unfold across the country ostensibly due to ill-preparedness for the bank to e-wallet transition, and the country-wide high levels of digital illiteracy. 

The Ministry of Finance issued a directive about the bank to e-wallet switch on January 8, three weeks to the quarter three releases of Shs4 trillion, which included Shs50m for each of the 10, 594 parishes in the country.

A March 2023 Uganda Communications Commission (UCC) performance report showed the country had 34.3 million telephone subscribers, of which only 27 million were enabled to use the internet. Of the 37.3 million people subscribed to mobile money services, 19.6million were active users while only 12.7 million had smartphones. 

Even then, several research reports have highlighted that digital literacy levels per capita remain low. A 2019 state of ICT study in Uganda showed that over one-third (36 percent) of non-internet users were digitally illiterate, 23 percent did not know how to navigate the net, while 13 percent were negative about using and needing the internet at all.

The Ministry of Finance premised its decision on the argument that the e-wallet has a wider reach than most banks and “provides full visibility and traceability of all funds up to the last mile beneficiary.”

It remains to be seen how Wendi app users in the far corners of the country such as Kabong, Buvuma, and Kalangala will circumnavigate the hurried transition.

Matters are made worse that once PDM money transferred to a Wendi account via any bank is lost, the bank is not liable for the transaction in case of loss of funds. Also, withdrawing money from Wendi accounts requires a Wendi agent but PDM regional coordinators have told the secretariat in Kampala they have hardly seen agents in their respective regions.

If at all anything, the spate of hacking and scamming of Wendi app accounts is another testament of how technology that has proven helpful in simplifying life, if used judiciously, is also a bane for the majority who do not catch up with the latest trends fast enough. The debacle comes of the back of recent hacking of telecommunication companies and bank’s internet systems which sent shockwaves across the country.

The Police Annual Crime Report released last week details that Shs1.5 trillion was lost in cybercrimes, including hacking and scamming, in 2023 out of which only Shs377b was recovered.

Pillar Six
Technology was encompassed in PDM, the government’s latest poverty antidote flagged off by President Museveni in February 2022 in Kibuku District, as pillar six of the seven on which the programme was modeled. Other pillars are, production, storage, processing and marketing; infrastructure and economic services; financial inclusion; social services; community mobilisation and mindset change; and governance and administration (one-government approach).

This led to building of an online tool, the Parish Development Management Information System (PDMIS), as a backbone of the system—deployed across all local governments—capturing the data of 22.8 million Ugandans from 7.8 million households registered across the 10,594 PDM Saccos, and the 157,006 enterprise groups.

“Further to this, the PDMIS has enabled the disbursement of Shs801.058b to 818,997 beneficiaries across the country. The ministry continues to support the system usage, which is currently at 1,738,029 users,” the Ministry of ICT Permanent Secretary, Dr Aminah Zawedde, said.

PDMI encompasses three key modules; household registration and financial inclusion, citizen participation information system, and monitoring and evaluation. 

The system, Dr Zawedde explained: “ensures a comprehensive approach to development, it streamlines the management of the Parish Revolving Fund (PRF), supports the electronic registration of enterprise groups and Sacco’s, and improves transparency and accountability in reporting.”

In effect, all verified beneficiary groups and Saccos are tracked through the system and all monies disbursed can be traced in real time as it moves from the source to individuals or groups.

In the unfolding debacle, PDMIS is yet to be fully integrated with the Wendi app, which leaves the assessment of risks probable. Previously, all the 13 banks engaged to disburse the PDM cash to pockets of the country—as part of pillar three, financial inclusion— had (have) plug in to the system only for the Ministry of Finance to change goal posts that the banks should integrate Wendi in their apps: this the banks remains jittery about as the intellectual property of the application remains suspect.

The Ministry of Finance spokesperson, Mr Jim Mugunga, however said the e-wallet is intended to ease access.

“The commercial banks also have issues because they have been receiving this money and it has been sitting idle on accounts. The app should be treated as a mobile money service accessible anywhere,” he said.

However, according to earlier guidelines issued by the Ministry of Local Government, all processes and transactions shall be computerised using a dedicated platform to monitor performance of the funds disbursed, even for remote supervision.

The Ministry of Finance/Treasury, under the guidelines, in consultations with the Ministry ICT shall prescribe/ approve both the proposed PRF financial management system, and digital modalities of disbursement and management of funds.

However, the Ministry of ICT was hardly involved in discussions before the hurried transition from banks to the e-wallet, which has sparked jitters.

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