Two days before the January 15 general elections, the government slammed the Internet shut and kept it locked for about five days. To make matters even worse, mobile money withdraws were also blocked countrywide.
Inevitably, the business community is now counting their losses after the blackout left thousands of businesses and households grappling with an acute liquidity squeeze.
According to the Financial Technology Services Providers Association (FITSPA), the nationwide internet shutdown stalled an estimated UGX 1.4 trillion in digital payments.
FITSPA officials say the digital economy lost about UGX 357 billion in transactions each day the internet remained disconnected.
By the fourth day, the association warned, the disruption had moved beyond inconvenience to become a financial services disaster, affecting consumers, informal traders, fintech companies and established financial institutions.
FITSPA Chairman Vincent Tumwijukye said the blackout struck at the heart of Uganda’s modern payments ecosystem, which increasingly relies on uninterrupted connectivity to function.
“When the internet went off, money stopped moving. That paralysis rippled across the entire economy,” he said.
Data from the Bank of Uganda for June 2025 shows just how central digital payments have become. Fintech firms and licensed payment service providers process approximately UGX 325 trillion annually, translating into an average of UGX 893 billion in digital transactions every day.
FITSPA estimates that about 40 percent of this daily volume equivalent to UGX 357 billion could not be processed during the shutdown.
Over four days, that translates into roughly UGX 1.43 trillion in stalled transactions, covering mobile money transfers, merchant payments, utility bills, transport fares, and business-to-business settlements.
“For each of the four days the internet was off, close to UGX 357 billion could not move through the system,” Tumwijukye said.
Whereas the Uganda Communications Commission (UCC) had proposed exemptions intended to allow digital financial services to continue operating, FITSPA said limited coordination among internet service providers meant that many fintech platforms were unable to stay online despite the exemptions.
“People could see their money, but they could not use it,” Mwijukye said, noting that this effectively locked liquidity out of the economy at a time when daily cash flow is absolutely critical.
With funds trapped in digital wallets, some businesses could not restock, pay suppliers or meet daily expenses, leading to temporary closures and lost income.
Larger enterprises were not spared either. Delayed settlements disrupted supply chains, slowed payroll processing and interrupted routine payments to utilities and service providers.
For banks and payment service providers, the shutdown meant deferred transaction fees, higher operational strain and a surge in customer complaints once services resumed.
FITSPA officials said the incident has underscored critical weaknesses in how digital financial infrastructure is safeguarded during periods of government-imposed restrictions.
As digital payments now handle nearly UGX 900 billion on a normal day, the association argues that fintech and payment systems should be treated as essential national infrastructure.
The association is calling for clearer protocols, advance communication and stronger coordination between regulators, telecom operators and fintech firms to ensure that essential financial services remain fully operational during any future disruptions.
“Digital finance is no longer optional it is central to economic stability,” the FITSPA boss said.
Beyond the immediate losses, analysts warn that repeated disruptions could undermine trust in digital financial services, slow financial inclusion and push businesses and consumers back toward cash-based transactions.
