BusinessShould Uganda Impose Another Lockdown?

Joyce ObuyaOctober 16, 202121411 min
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The Covid-19 in Uganda is part of the ongoing worldwide pandemic of coronavirus disease 2019. The virus was confirmed to have reached Uganda in March 2020. In January 2020, the WHO confirmed the novel coronavirus was the cause of respiratory disease and that it had its origin from Wuhan,China.

According to Wikipedia https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Uganda, the fatality ratio of Covid-19 is much lower than the SARS of 2003, but the transmission has been significantly greater with a significant death toll.

When the first announcement of the covid-19 patient was confirmed, the government put in place a 14-day quarantine for those who were getting into the country. This was done back in 2020. After the 14-day quarantine for those traveling from countries that were ‘high risk’, stern nation-wide lockdown measures were put in place between March and May 2020, limiting all non-essential business activities and public gatherings in the country. Also, personal motorized travel was banned, a national curfew was put in place, and airports were closed for all travel.

Up until towards the end of May 2020, most businesses had to remain closed. Food markets remained open, but many vendors were unable to return home and had to sleep in markets due to the suspension of public transport. A small number of businesses such as factories, garages, hardware shops, metal works and restaurants for takeaway were allowed to reopen while others such as hair salons and business arcades remained closed.

The number of young people who have been infected have presented severe symptoms unlike the first wave where the elderly were the most affected. This rules out the myth that COVID only affects old people. Private hospitals have started turning away Covid-19 patients to public health facilities.  The increase has come at a time when schools were preparing to reopen for Primary One pupils on June 7th 2021.

With the advancement of Covid-19 virus all over the world, many countries and institutions have tried to come up with vaccines and cures to combat this. Uganda has started using the AstraZeneca vaccine which is said to help reduce the effects of covid-19. Ugandan Health Minister Jane Ruth Aceng received the COVID-19 vaccine injection as the first person in the country’s inoculation campaign. Other prominent people in the government also took the jab as a show of unity. Healthcare workers have received the AstraZeneca jabs as part of a phased rollout.

According to The Daily Monitor, https://www.monitor.co.ug/uganda/news/national/lockdown-looms-as-museveni-set-to-address-nation-over-surging-virus-cases-3427434 , the transmissibility of an imminent third wave that has already seen the country register nearly 4,000 cases in just four days presents the country with not many alternatives other than resorting to previous methods aimed at combating the virus. Uganda’s case tally rose to 51, 676 with 374 fatalities with nearly 750, 000 vaccinated people in a 41 million people- state, since the March 2020 outbreak was confirmed.

The last lockdown affected the economy because there was an increase in the number of poor people in the country by 2.6 million. The severe reduction in exports and tourism made the GDP growth of the country go down significantly. Decline in economic growth in FY 2019/20 from 6% to about between 4.6% and 5.1% under the worst-case scenario. Reduction in worker’s remittance and also laying off some led to decreased growth.

According to the Uganda Revenue Authority, https://www.ura.go.ug/openFile.do?path=//webupload//upload//download//staticContent//TOPMENU//9907//10192_RPR.pdf, an anticipated loss of UGX 116.26 billion in customs revenue by the end of June 2020 due to this crisis alone, expanding the overall revenue loss UGX 513.26 billion by close of June 2020.

Should Uganda impose another lockdown?

If the country goes into lockdown there will be some drawbacks experienced. There will be a likely increase in poverty as the economy slows down. This is because people will be forced to stay home instead of doing their daily duties to help take care of themselves. Uganda’s growth forecast was revised down from a previous estimate of 6% to 3–4% from the second half of FY2019/20 due to the impact of Covid-19. The service sector which accounts for over 50% of Uganda’s GDP will be most affected as the lockdown and other Covid-19 response measures have halted key activities such as tourism and hotels which are Uganda’s top foreign exchange earners.

According to The International Trade Administration, https://www.trade.gov/country-commercial-guides/uganda-import-tariffs imported goods are charged a value added tax (VAT) of 18% and a 15% withholding tax, which is not reclaimable.  Combined, these taxes effectively charge a 33% tax on all foreign goods and services. A slowdown in international trade as a result of the coronavirus is likely to have a massive negative impact on tax collections this year.

The research done by UNDP  https://www.undp.org/content/dam/rba/docs/COVID-19-CO-Response/Socio-Economic-Impact-COVID-19-Uganda-Brief-1-UNDP-Uganda-April-2020.pdf states that according to the UN Economic Commission for Africa (UNECA), the developing coronavirus crisis could worsen Africa’s already stagnant growth. For Instance, oil-exporting nations are estimated to lose up to US $65 billion in revenues as crude oil prices continue to fall. UNECA estimates that the pandemic may result in a 78% decline in GDP growth from 3.2% to 1.8%, while OECD anticipates GDP to grow by only 1.5% due to disruption of global supply chains and other factors. UNECA further anticipates a decline in employment by 48%, and 48% decline in the size of the population expected to move out of poverty.  It is estimated that the continent will require US $10.6 billion in unanticipated increases in health spending to curtail the virus from spreading, while on the other hand revenue losses could lead to unsustainable debt.

Flattening the curve comes at a cost–it also flattens the economy. Purchasing stops, jobs are lost, and investments cease. The Ugandan government can design an exit strategy. This means that once the harms of the COVID-19 suppression policies begin to outweigh their benefits, there is a swift switch from lockdowns and curfews to a more practical way that will help the people and the economy. The government can help by strengthening broader healthcare and social safety. The faster people get well the better it is for the economy. They can also help in containing the spread of the virus by setting up campaigns to educate the public on best practices, including promoting good hygiene and social distancing, discouraging large public gatherings, and encouraging employers to protect the jobs of employees who require quarantine or treatment.

Joyce Obuya

Relevant experience as a content writer. Highly proficient in Keyword Research and its tools. Experienced writer in both short-form and long-form blogs as well as Business Publications

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