The election period and its effect on manufacturing.
Manufacturing is one of the most sensitive sectors because it is long term in nature, highly capital intensive and has a lot of foreign direct investments in Uganda. The recently concluded electoral process poised speculation and threats of violence which affected the flow of FDIs into the country.
The election period, combined with the COVID-19 effect and the security issues that existed at the time, has not made doing business any easier. From the precedence of violence witnessed during the presidential campaigns, to the threats and speculation of violence that would ensue during or after the election period, meant that investors had to halt their activities.
“People who have invested here wouldn’t want to see a situation where there is a threat to their life, property, and businesses. So, in a way the tensions greatly affected their operations.” said the UMA Manager Policy – Mr. Muzamil Muhammad.
In situations of insecurity and speculation of violence, people tend to think that there is something that is cooking and, in many instances, they will either run out, or they will curb down their reinvestments. He added.
Scaled-down operations: Many manufacturers had scaled down operations for three reasons:
- Their workers had to exercise their civil right to cast a ballot and therefore these were allocated days off to participate in the voting exercise.
- Intimidation from the heavy military deployment and;
- Internet shut down: From the business perspective, this decision was unguided because there are so many ways to cut off social media without necessarily shutting down the whole internet infrastructure which is a backbone of the global economy.
Manufacturers do not just sell in Uganda, but are connected to other countries through the internet which has become a global backbone. With this shut-down, it meant that companies lost out on business that was occasioned by pending orders, confirmations, and delivery that could not be facilitated with the internet shut down.