Gov’t-ordered internet shutoffs cost Ugandans Shs7.5 trillion

  • by Ignatius Liposhe
  • February 22, 2017
Man using the internet

NRM gov’t only focused on the impact of the shutdown on political discourse but ignore the impact on flow of revenue


Uganda’s business community is still sweating at the realization that trillions of shillings were lost when government in February 2016 ordered telecom companies to shut down social media and mobile money.

A new research to indicate the actual economic cost of Internet shutdowns done by Brookings Institution has quantified $2,160,617 (approximately Shs7,505,335,272) as the actual cost is if the impact on Ugandan society.

The ruling National Resistance Movement (NRM) government has always cited security reasons for shutting down social media.

Released this week by Darrell M. West, director of governance studies and founding director of Brookings’ Center for Technology Innovation, the report showed how the cash-flows and the extent to which businesses online or exchange of funds online like mobile money and mobile payments were affected by the shutdowns.

“As long as political authorities continue to disrupt Internet activity, it will be difficult for impacted nations to reap the full benefits of the digital economy,” West wrote.

Between July 1, 2015 and June 30, 2016, 81 temporary internet blackouts in 19 countries cost those economies at least $2.4 billion.

His analysis is based on 2014 World Bank gross domestic product data and the Boston Consulting Group’s 2016 projections for how much each country’s GDP is derived from the internet economy. He also measured the financial impact of turning off mobile devices using information about subscriptions and referenced a Massachusetts Institute of Technology study on how free messaging apps help growth.

India suffered the biggest impact valued over $968 million and Uganda at 16th position lost more as compared to Bahrain ($1,246,616), Libya ($414,194) and North Korea ($313,666) according to the report.

Former Principal Judge James Ogoola castigated the government for shutting down social media.

“The act of closure was bad. The timing of the closure was worse. The intention and the implications of the closure were horrifying,” Justice Ogoola said.

In Uganda, the shutdown on social media was effected by the telecom companies on the orders of the Uganda Communications Commission, where Whatsapp, Facebook and Twitter were rendered inaccessible by users.

The telecoms did lose revenue because people did not purchase actual internet bundles during the two-day shutdown. Additionally, the mobile money services shutdown disrupted payment for services such as Pay TV, water bills, and electricity bills.