Political factors always determine the extent to which government my influence the

economy. Policies developed by government determine the initiatives that will be

introduced which either favour certain sections of the economy or may be against them.
These can be through trade regulations or taxation and include; employment laws,
consumer protection laws, environmental regulations, trade restrictions or reforms, health
and safety requirements.

Government policies like emyoga, bonna bagagawale, parish development model.

A stable political environment is known to create a favourable environment for different

categories of businesses while an unstable political environment always creates uncertainty
in the business environment. This will either attract investor or alienate them. Times of
Amin where investors where chased away and the stable environment that has occurred
since 1986. This has attracted investors again. it builds confidence in existing and potential
investors. Without confidence that a business will grow based on a government’s political
status, investors and business persons will shun off. The northern Uganda had been ignored
by investors because of the LRA rebels where by nobody was willing to do any business
there. Today, the region is starting to flourish for example Gulu has greatly developed and
businesses are thriving because for the currently stability there.

Political groups can also influence the government to allow for establishment of certain
businesses or cripple them. Before establishing or when running a business, it is important
to consider the role of politics. This will enable you to employ necessary strategies to
cushion your business from political influences. Forexample promoters who used to work
with bobi wine always counted losses fo all his cancelled shows because of his
involvement in politics while those who are pro government like Balaam and Bebe cool
have enjoyed a smooth ride.

Government trade policies. These impact and determine the success of any business in the
country. Where government allows free trade, businesses easily grow however where the
policies are restrictive, businesses will not flourish. Reforms such as trade liberalization,
privatization over the last decades have attracted investment hence contributing to
economic growth.

Diplomatic events withing the country and region greatly afecct the existence of businesses
within the country. The East African community has greatly led to the establishment and
growth of different businesses as a result of availability of market arising out of free
movement of goods and services. Further to this, cooperation between member states have
been a contributing factor in the flourishment of these businesses. Rwanda had closed its
border with Uganda and businesses around katuna were greatly affect. Since its reopening,
business is slowly returning to normalcy.

Government legislation creates rules and regulations that promote specific businesses while
stifling others. It can prevent specific business for special reasons or consumer interests.
For example, the government of Uganda Prohibits and/or Restricts Importation of among
others used motor vehicles in that it is hard to import a car over 15years, Used computers
and appliances, Imports which are also banned under international agreements to which
Uganda is signatory. They normally tend to put a heavy penalty or tax on these items.
Uganda Revenue Authority imposes an environmental levy on vehicles over eight years
old, and the Ugandan government has banned the importation of used computers and used
refrigerators. Therefore as a business person or a potential entrepreneur, it is critical to
consider these factors before and when running a business. It helps one to make an
informed decision.