Uganda shilling weakens over Bobi Wine protests

Uganda shilling weakens over Bobi Wine protests
Politician Robert Kyagulanyi (C), better known as Bobi Wine, joins a demonstration in Kampala to protest tax on the use of social media, July 11, 2018.

The Uganda shilling, which had gained against the dollar in the last three weeks, weakened last week trading in the range of 3,750/3,800.

In the two to three weeks running to last week, the shilling had gained significantly against the dollar and other foreign currencies, trading in the range of 3,600s.

According to Stephen Kaboyo from Alpha Capital Partners, which watches the financial markets, the falling of the shilling is on account of negative sentiments triggered by recent political events in the country.

In particular is the brutal arrest of leading opposition politician Robert Kyagulanyi, also known as Bobi Wine, as well as three members of parliament and dozens other people.

Bobi Wine’s driver was also murdered by suspected members of the security agencies, who claimed that supporters of Kassiano Wadri, who won the Arua Municipality by-election and is himself in detention, smashed the windscreen of a presidential car.

Initially Bobi Wine was charged in military court with illegal possession of arms, but that has been dropped and he has now been charged with treason and remanded to Gulu prison.

The arrest of Bobi Wine has triggered lots of protests in many parts of the country, with the most violent and widespread one in Kampala on Monday this week.

The events have not only been condemned by many leaders, organisations and people in Uganda, but regionally and across the world.

In an unprecedented case in recent years, the arrest of Bobi Wine has been headline news on major international news platforms like the BBC, Voice of America, Reuters as well as many other platforms across the world.

Kaboyo says the negative political events have a negative effect on the economy, as it scares away potential investors and visitors.

He forecasts that the shilling will stabilize and perhaps also strengthen as political tensions ease.

Kaboyo also forecasts that the stability of the shilling will be dependent on non-governmental organisations’ conversions and export flows which will improve the supply side.