Ugandan authorities said the riots that rocked Kampala and other towns last week threatened revenue collections and could hamper efforts to attract tourists and investors to the country.

The Uganda Revenue Authority (URA) said the riots were a threat to its revenue collection as they disrupted business activities in the central business district of Kampala and in some other towns.

The Kampala City Traders Association said city traders had lost merchandise worth Ush800 million ($437,158), on top of being forced to lock up their businesses for three days.

Looters and supporters of Dr Kizza Besigye's Forum for Democratic Change (FDC) fought running battles with police following the arrest last Monday of the opposition leader.

He was charged with treason, concealment of treason and rape, and remanded in Luzira Prison on the outskirts of Kampala.

Paul Kyeyune, the URA spokesperson, said that the demonstrations that followed Besigye's arrest forced most businesses in the city to close down.

The three day political unrest in Kampala also delayed companies' submission of returns to the authority. He said the timing of the demonstration had particularly hit their operations because it was the middle of the month, when the authority expected most businessmen to pay their taxes.

This had, however, been made impossible due to the abrupt closure of many financial institutions where customers were supposed to pay their dues.

The authority gave a one-day extension of the deadline for revenue payments to enable those who had failed to pay up because of the riots to clear their accounts.

"The government is doing its best to get the situation back to normal because if these troubles escalate, we fear that there will be a gross effect on revenue returns in the country," said Mr Kyeyune.

Separately, officials of the Uganda Investment Authority (UIA) said the riots and looting could have a negative effect on foreign direct investment in Uganda as they created an impression of an unstable country.

"All the burning, shooting and looting are a threat to the investment environment," said Margaret Kigozi, the executive director of the investment authority, adding that the riots had come at a time when the country was in the process of promoting its image in the international community.

Kigozi said the "Brand Uganda" promotional campaign running on CNN, as well as Uganda's participation in the ongoing World Travel Market exhibition, the annual international travel fair in London, were expected to help Uganda attract investors and tourists.

The official said the Ugandan investment climate had improved tremendously in the past 16 years, and that the government had last week moved swiftly to arrest the disturbances that threatened to tarnish this goodwill.

Last Thursday, traders who spoke to The EastAfrican said business remained down as the CBD was largely shunned for fear that rioting would resume.

The presence of security personnel from the police, the army and a newly created Black Mambas Urban Hit Squad continued patrolling city roads, scaring shoppers away from the city centre.

Asuman Mugenyi, the police spokesman, said two government vehicles were burnt by rioters last Monday while two others were smashed. Several call boxes were either smashed or burnt along Burton, William and Luwum Streets. He said a number of phone shops, pharmacies, and general merchandise shops were looted.

Police on November 15 arrested 57 suspects in connection with the riots. One person was shot dead, allegedly while trying to break into a shop.

The Besigye riots came three days after Makerere University students staged a demonstration against a new fees structure, and looted suburbs around the university, some 5 km from the city centre. Riot police battled the students for two days. Two students died from injuries suffered during the melee.

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