UGANDA’S ELECTION YEAR ECONOMY DOWN THE YEARS

Uganda’s economic data carries a quiet election-year signature. You see it not in speeches, but in slowed investment, cautious banks, thinner trading volumes, and postponed decisions.

For three decades, elections have tended to coincide with softer GDP growth, not because the economy stops working, but because it starts waiting...

The numbers bear this out.

Growth slowed in 1996 after a strong recovery year. It dipped again in 2001 despite a liberalised economy that was otherwise expanding rapidly. In 2011, inflation surged, household purchasing power collapsed, and growth fell to about 4 percent. In 2016, drought and political uncertainty combined to push growth below 4 percent once more. Only 2006 escaped the trend, buoyed by exceptional post-war momentum and a services boom strong enough to drown out political noise.

The mechanics have always been familiar. Elections inject uncertainty. Businesses delay expansion. Government spending tilts toward consumption rather than productivity. Agriculture—still the economy’s backbone—suffers when extension services stall and inputs become politicised. As

Shillings & Cents has argued for years, productivity lost in election seasons lingers well beyond polling day.

After 2016, however, a new variable entered the equation: internet shutdowns.

In earlier cycles, the internet was limited by how peripheral the digital economy still was. That is no longer true. By 2026, Uganda’s economy is deeply digitised. Mobile money underpins daily trade. Logistics depend on constant communication. Government revenue systems, e-commerce platforms, and service providers assume connectivity as a given.

That is why the January 2026 internet blackout matters in a way earlier shutdowns did not. The disruption lasted roughly five days, from January 13 to 18, and initial estimates suggest a direct economic loss of about $15–18 million, or roughly $3.8 million per day. That daily cost is almost double the estimated impact of a similar shutdown in 2021. The reason is not politics; it is structural change.

Critically, while the general blackout was lifted on Sunday 18 January 2026, connectivity did not simply snap back to normal. Access to social media platforms remained constrained, muting the recovery in commerce, advertising, communication, and informal trade that now relies on these channels. For many small businesses, it is social media—not websites or emails—that drives orders, payments, and customer engagement. Partial restoration, in practice, meant partial economic recovery.

This matters even more when viewed against a longer backdrop.

Access to Facebook has remained restricted in Uganda since 2021. That means a significant portion of the economy has been operating for years in a permanently constrained digital environment. When analysts speak of “internet access,” they often assume full functionality. Uganda’s reality is different. Even in non-election periods, businesses have adapted to a throttled digital ecosystem, shifting to workarounds that are often slower, costlier, and less efficient.

The January 2026 shutdown therefore did not occur in a neutral digital space. It landed on top of an already incomplete recovery of online freedoms. That magnified its impact.

The sectors hit hardest illustrate this clearly.

In logistics and trade, communication gaps disrupted cargo coordination, including clearance processes linked to regional supply chains. E-commerce platforms such as SafeBoda and Jumia reported near-total operational halts. Government portals for tax payments and social security contributions were inaccessible, delaying revenue collection at a time when fiscal stability matters most.

Against this, the macro outlook for 2026 still appears strong. Real GDP growth is projected between 6.5 and 7.6 percent, driven largely by oil and gas infrastructure investment and a rebound in agricultural exports. Oil investment, running into the billions of dollars, does not pause for political events. Pipelines do not wait for internet access to be restored. That scale provides a cushion capable of absorbing multimillion-dollar short-term losses.

But this is where analysis must become more precise.

Internet shutdowns function as a digital tax. They may not derail headline GDP growth, but they disproportionately burden the non-oil private sector—SMEs, traders, startups, media houses, and service providers. These are the sectors expected to create jobs, diversify the economy, and absorb young entrants into the labour market. Lost days for them are not easily recovered.

There is also a longer shadow. Repeated shutdowns and persistent platform restrictions raise Uganda’s perceived digital risk. Investors price in uncertainty. Startups hesitate to scale. Innovation slows not dramatically, but cumulatively. Growth becomes less broad-based, more dependent on capital-intensive sectors like oil that create fewer jobs.

Yet here lies the uncomfortable trade-off policymakers confront, and it should be acknowledged honestly. The economic cost of a temporary digital shutdown, while real and rising, is still bounded and measurable. A breakdown of law and order is not. Disorder does not shave decimals off growth; it resets expectations, drains confidence, and inflicts damage that can take years to repair...

That is the real election-year calculus. But as the economy digitises further, the cost side of that trade-off is changing fast. What was once tolerable disruption is becoming material economic drag.

The likely outcome for 2026 is therefore nuanced. The blackout—and the continued constraint on social media will not collapse the growth story. Oil investment is too large for that. But they may prevent Uganda from reaching the upper end of its projected 7.6 percent growth, while quietly weakening the very private sector meant to carry the economy beyond oil.