The Impact of Shutting Down the internet on manufacturing

On 14th January 2021, the citizens of Uganda went to the polls to vote in the Presidential and Members of Parliament.

Citing a threat to "national security," the Ministry of ICT ordered mobile network operators to shut down key social media sites (WhatsApp, Facebook, Twitter).

Many mobile users defied government warnings and turned to Virtual Private Network applications; a lesson they had learned from the 2016 elections which saw a similar ban on social media countrywide.  ­­­­

With more alternatives to circumvent the social media ban, the government made a radical decision to shut down the internet completely. According to Mr. Muzamil Muhammad, the Manger Policy, “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 world”

The abrupt shutdown of the internet without any prior notice left millions of customers stranded without access to their pages, emails, clients, and suppliers plus the much-needed funds because banks also fell prey to this shutdown.

To the business community, this has had unprecedented effects on the operations of manufacturing. During the same period, the tax body was migrating from the analog way of doing business to digital. The introduction of DTS, EFRIS system are all electronic and depend entirely on the internet.

Interrupted production patterns: Where lines of production have been fixed to work with the DTS specifically in the beverages sector; soft drinks, beers, cigarettes, etc, in all these facilities and machines could not run because of the internet shutdown.

Filing of returns: The Government also suffered direct and indirect financial losses from the shutdown. The Uganda Revenue Authority taxes revenues the business community at 60%.  The manufacturers are among the largest taxpayers in the country. By shutting down the internet for six consecutive days, the government deprived its revenue agency of much-needed tax revenues. Even then, the schedule for filing returns which is every 15th of the month was not possible due to the internet shutdown.

Digital marketing: manufacturing today, depends so much on social media to promote and supply goods. With the shutdown, there was a big slump in business. Preliminary, almost 65%of the companies depend on social media for marketing. Due to this, their revenues have gone down because people could not access their pages and clients.

Manufacturers do not just sell locally but are connected to other countries through the internet. Perhaps the biggest impact is that the manufacturer may have lost faith in a system that can be turned off and on at the whim of the government regulator.

As the UMA, we are still analyzing the internet shutdown to ascertain the extent of the damage to manufacturing.  

 



 

Sector Statistics

0

Members

UMA has over 1221 Members in all Categories
Industry Contribution To GDP21%

Power

Electricity Consumption 66%

Uganda Manufacturers’ Association
P.O Box 6966, Lugogo Show Grounds
Kampala
Tel: +256 414 221 034 /287615
Fax: +256 414 220 285

We invite you to connect with us on

       

Copyright 2021 All rights reserved. Uganda Manufacturers Association
Website Design by Lete Technologies