How Uganda's political tension could affect the economy

The political landscape in Uganda has been marred by heightened tensions in recent days, following the charging of three Ugandan lawmakers and dozens of others critical of President Museveni with treason. The charges stem from their alleged involvement in the stoning of the president's convoy. The implications of this latest development on the Ugandan economy are of concern to many, with fears of potential repercussions looming. Gideon Badagawa, the Executive Director of the Private Sector Foundation of Uganda, shed light on the situation during a recent interview with CNBC Africa. Badagawa highlighted the impact of the political climate on foreign direct investment in the country, emphasizing the importance of a stable and secure environment for businesses to thrive. Badagawa pointed out that Uganda has seen a growth in foreign direct investment in recent years, attributed to an improving business environment and security climate. However, the recent political unrest has raised concerns among investors, potentially diverting capital to other more stable markets in the region, such as Kenya and Rwanda. The uncertainty surrounding the political situation in Uganda has cast a shadow over the business community, particularly in sectors like agriculture and infrastructure. The Private Sector Foundation of Uganda has been engaging with the government to address the security challenges and restore confidence among investors. Badagawa underscored the need for a secure environment, highlighting the impact of security issues on investment decisions. He cited the example of northern Uganda, which has vast potential in various sectors but has been hampered by security concerns, deterring investment. When asked about the worst-case scenario if the current situation persists, Badagawa expressed cautious optimism, noting that the government appears to be taking steps to address the challenges. He acknowledged the disruptive nature of political events on the economy, particularly during election periods, but stressed the importance of reassuring investors and preserving stability. In conclusion, the unfolding political tensions in Uganda pose a significant risk to the country's economy. The uncertainty surrounding the political climate has the potential to deter much-needed investment and stall economic growth. Amidst these challenges, stakeholders are looking to the government to prioritize security and stability, in order to safeguard the interests of businesses and investors in Uganda.