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Internet shutdown: Online businesses count losses

Online businesses in Uganda were first hit by last year’s four-month Covid-19 lockdown and just when they were staggering to life, the government struck them down last month with the shutdown of Internet and social media.

Ugandans began experiencing restricted social media access on January 11 – three days to the January 14 presidential elections – before a complete shutdown on January 13.

After five days of total Internet shutdown and nearly a month-long blockade on social media, the government yesterday restored social media services, except for Facebook.

“Internet and social media services have been fully restored. We apologise for the inconveniences caused, but it was for the security of our country. Let’s be constructive, NOT destructive consumers/users of social media,” Mr Peter Ogwang, the state minster for Information, Communication Technology and National Guidance, tweeted Wednesday.

Mr Ogwang, however, did not explain why social media has been restored, but the decision came two days after this newspaper in an article exposed Cabinet ministers, including Mr Ogwang, who remained active on both Twitter and Facebook in defiance of the government’s own ban.

This newspaper understands that President Museveni met senior officials, including government communication experts, on Tuesday evening who informed him that it was unjustifiable to continue the embargo on social media in the wake of the Daily Monitor exposé.

In addition, the President was told that the shutdown was counter-productive as government was unable to respond to online attacks by its haters outside Uganda.

 Whereas the blockade on social media was lifted yesterday, MTN-Uganda informed its subscribers through short text messages (SMS) that access to Facebook, with which the government has a tiff, would remain restricted.

“Yellow Irene! Government has permitted Social Media access except FB (Facebook) starting today. Thank you for your patience,” read a message from MTN sent to this Reporter at 5:06pm yesterday.

Uganda Communications Commission (UCC) records, as of October 31, 2020, indicate that there are up to 20 million Internet users in Uganda, with 19 million of them active monthly users.

Online businesses react
Although both the Internet and social media have been unblocked, users’ experiences have not been the same compared to the pre-shutdown period.

“This is not the normal Internet we used in 2020. I have tried using it without Virtual Private Network (VPN), but it is too slow. I actually think they are still planning to restore it or it is a hoax,” said Mr Rogers Semakula, proprietor of New Fashion Designers, an online business selling women shoes.

Ms Farida Matovu, the chief executive of Kampala-based Fana Kitchen Ware, which sells kitchenware online,  says: “It takes a long time to upload or download pictures. The videos are not uploading.”

She added: “Covid-19 affected us but this Internet shutdown affected us more. We had to close the shop and go home. There are people like my old mum who knew nothing about VPN.

They are the majority of consumers who have money to spend on products like ours. The youth knew how to navigate and bypass the shutdown, but they are not the ones buying these goods. Majority are on social media for fun and connection with others.”
Ms Matovu said she closed for five days from January 13 to January 18.

Ugandans experienced widespread Internet disruption on platforms such as Facebook, WhatsApp, Instagram and Snapchat, when using the country’s data servers.
UCC, without giving any reason, instructed telecom companies to restrict access to social media from January 11, till Wednesday February 10.

That was when Uganda realised that perhaps no one can efficiently operate without the Internet, not even the government.
While connection to other Internet services were restored on January 18, 2020, two days after presidential results were announced, social media remained inaccessible except for VPN users.

Whereas there is no clear statistic of how much businesses lost during the Internet and social media shutdown, Jumia, a major online retailer in Uganda, says they could not immediately quantify the losses but it runs in several millions of shillings during the total shutdown from January 13 to January 18, 2021.

Ms Samantha Abaho, the Jumia public relations manager, said they were able to move on with orders for those who could use their emails when the Internet was restored. Unlike other businesses that depend totally on social media for orders, Jumia has an option for their customers to set up email accounts for orders.

Other businesses could not operate in that manner. Mr Robert Katimbo (not real name) sells bras of all sizes and make. He used to advertise or display his stock online, especially Facebook and WhatsApp and deliver to homes and offices at a cost.
“I could not sell anything when they removed us from social media,” Mr Katimbo said on Monday.

He declined to discuss details of the losses he incurred, but sounded elated over news of the restoration of the Internet.  
“Are you sure social media is back? Let me first check then we talk later. Let me check if there are any orders coming on my (Facebook) page,” Mr Katimbo said before hanging up.

Big businesses easily picked up off social media to reach their clients but there are small businesses that totally depended on social media to sell their products.
Mr Semakula, the dealer in women shoes online, has clientele spread across borders in Kenya, Tanzania and Sudan.

Losses
He estimates that he lost more than Shs20 million during the 29-day social media shutdown, with daily sales plummeting by half.

“Generally, everything was slow and low. Communication was hard, (clients’) orders were low and orders from suppliers came in slowly. Some of my clients out there did not know how to use VPN (to bypass government Internet shutdown). So, they just gave up and waited for the Internet to be restored,” Mr Semakula said yesterday.

He added: “I had to make direct calls or send SMS to clients. I just went back offline as something I could hold on to keep around. I cannot compare online to offline. Offline is just not organised because things are not on time.”

Despite his business suffering a setback during the Internet shutdown, Mr Semakula said he would still choose to do business online.
“The world is moving online. There is no way we can continue to operate offline. I cannot recommend for anyone to start a business or operate offline,” he said.

For those outside Uganda, explanations that Uganda was under Internet blockade fell on deaf ears for impatient clients who needed immediate deliveries.

“I kept calling and explaining that our Internet was shut down. But things online move fast. Whenever you delay, the customer looks for an available alternative,” Ms Matovu said.
Most businesses were still recovering from the shock of the four months coronavirus lockdown from March to June when the Internet shutdown happened.

Ms Matovu said the cost of doing business was already on the rise and new headwinds such as Internet and social media blackout make life more difficult for online entrepreneurs.
Some of the online businesses rent out premise for storage of merchandise and had incurred arrears by the time of the shutdown yet they had negotiated with the landlords to deduct payments on monthly basis.

“I know several people, workmates and associates who are offline. I know several businesses that are collapsing each day because they were surviving through online-related work. The Tourism, Education, Health and IT sector has been most affected. I also understand that the airline industry was greatly affected in the earliest stages of the shutdown,” wrote Mr Kato Mukasa, a human rights defender, in a letter published in today’s edition of the Daily Monitor.

According to the Ministry of Finance, the cost of Internet shutdown weighed heavily on the government too since it affected its ability to repay its debt burden, receive tax revenue and also pay wages due to civil servants.

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