Uganda's Pre-Election Internet Controls and Their Implications for Tech-Dependent Markets

Uganda's 2026 presidential election has become a focal point for global investors and policymakers, not just for its political stakes but for the broader implications of internet volatility in emerging digital economies. As the country navigates a history of pre-election internet shutdowns and evolving regulatory frameworks, the interplay between geopolitical risk, investor behavior, and technological resilience is reshaping the landscape for tech-dependent markets. This analysis unpacks the dynamics at play, drawing on recent developments and institutional strategies to mitigate systemic risks.

The Political-Economic Context: Internet as a Strategic Tool

The Ugandan government has consistently denied allegations of planning internet shutdowns ahead of the 2026 election, with officials like Dr. Aminah Zawedde and Hon. Nyombi Thembo emphasizing "no official directive" to restrict connectivity. However, the opposition National Unity Platform (NUP), led by Robert Kyagulanyi (Bobi Wine), has proactively developed an offline monitoring app, Bitchart, leveraging Bluetooth technology to circumvent potential blackouts. This tension reflects a broader pattern: during the 2021 election, a four-day internet shutdown cost the economy an estimated USD 10 million, disrupting mobile money, healthcare, and e-commerce.

The government's stated rationale for such measures-preventing misinformation, incitement, and the illegal dissemination of election results- has been met with skepticism by human rights groups and international observers. While the state insists on "responsible media practices," critics argue these policies disproportionately suppress dissent and undermine electoral transparency. This duality-between state control and digital freedom-creates a volatile environment for tech-dependent sectors.

Investor Behavior: Navigating Uncertainty in a Fractured Ecosystem

Uganda's tech sector, though growing, faces a paradox: it is both a driver of economic resilience and a casualty of political instability. According to the 2025 Investment Climate Statements, Uganda's economy grew by 6.1% in FY 2023/24, partly fueled by oil and gas investments, yet FDI inflows remain constrained by corruption, democratic backsliding, and restrictive regulations. The 2019 Investment Code Act offers tax incentives but imposes stringent performance requirements, including penalties for "tarnishing Uganda's reputation."

Investors are increasingly adopting cautious strategies. For instance, 87% of institutional investors globally anticipate higher digital asset allocations in 2025, a trend mirrored in Uganda as tech-savvy millennials pivot toward cryptocurrencies and exchange-traded products (ETPs). However, regulatory ambiguity-exemplified by the 2021 Facebook ban and recent Starlink restrictions-introduces friction. The Uganda Communications Commission's (UCC) demand for Starlink to halt operations without a license underscores the government's capacity to disrupt even satellite-based connectivity.

Geopolitical Risk Mitigation: Institutional Responses and Tech Resilience

International financial institutions are playing a critical role in mitigating risks associated with Uganda's internet volatility. The Financial Sector Deepening Uganda (FSD Uganda) has partnered with the Personal Data Protection Office (PDPO) to develop a , aiding fintechs and MSMEs in complying with the 2019 Data Protection Act. This initiative reduces compliance costs while fostering trust in digital financial services-a sector with 30.4 million active mobile money users in 2024.

Similarly, the United Nations Capital Development Fund (UNCDF) and the Bank of Uganda have prioritized expanding digital finance beyond payments into credit, savings, and insurance, aligning with Uganda's National Financial Inclusion Strategy (NFIS II). These efforts aim to build a robust financial ecosystem less susceptible to internet disruptions. Meanwhile, global chief risk officers (CROs) have elevated geopolitical risk to their top-five priorities, with 38% of CROs in 2025 citing it as a critical concern-a 22% increase from 2023.

The Path Forward: Balancing Connectivity and Control

For investors, the key lies in hedging against internet volatility through diversified tech resilience strategies. The opposition's Bitchart app and grassroots adoption of VPNs and satellite internet highlight the ingenuity of local actors in circumventing state control. However, systemic risks persist: the OECD and African Union have emphasized that digital public infrastructure is essential for AI-driven economic transformation, yet Uganda's fragmented regulatory environment hinders such progress.

Geopolitical risk mitigation will require a dual approach. On one hand, international institutions must continue supporting digital literacy and infrastructure projects. On the other, investors should prioritize ventures with offline capabilities or hybrid models that blend digital and traditional systems. The Ugandan government's pledge to maintain "open but regulated" internet access ahead of the 2026 election offers a glimmer of hope, but its enforcement remains uncertain.

Conclusion: A Test Case for Emerging Markets

Uganda's pre-election internet policies are more than a domestic issue-they are a microcosm of the challenges facing emerging digital economies. As geopolitical tensions and technological disruptions converge, the ability of investors and institutions to adapt will determine not just Uganda's economic trajectory but the broader resilience of tech-dependent markets in Africa and beyond. The coming months will test whether Uganda can balance political control with the digital freedoms necessary for sustainable growth.