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UGANDA’S ECONOMY DURING AND AFTER THE LONG-TERM PANDEMIC.

 

Uganda has been affected by the long-term pandemic of COVID-19 for two consecutive years. The pandemic hit Uganda around 09th June 2019 and the numbers kept on fluctuating as the president tightens the restrictions according to number of new cases and deaths. Time reached where the situation became worse and there was a total lock down and this led to total economic shut down and people were not working.

On 25th Jan 2022, the economy fully opened, curfew ended, bars fully open and many others. This sounded like nice music to many Ugandans’ ears and were too excited. Many locked businesses opened and resumed work which improved on the economy since some taxed businesses were locked up. There were also global supply chain disruptions as a result of factory closures in china. And this negatively impacted small and medium enterprises in Uganda.

Most businesses had to fight hard to get solutions for the pandemic to survive and Uganda as a country hardly got measures for the country to survive on and keep moving. Some entrepreneurs opted for other businesses that were working during lock down as others waited until the economy was fully opened.

The 17th Uganda Economic Update (UEU), from crisis to green resilient growth: investing in sustainable land Management and climate-Smart Agriculture, says that the COVID-19 shock caused a sharp contraction of the economy to its slowest pace in three decades. Household incomes fell when firms closed and jobs were lost, particularly in the urban informal sector. The country’s Gross Domestic Product contracted by 1.1 percent in 2020, and is estimated to have recovered to 3.3 percent the during 2021 fiscal year.

The government lost a lot of money since many businesses that are income generating were not working. Also spent money on donating food stuffs to the community especially in urban centers where they don’t grow crops, buying medicine and other COVID-19 facilities for the patients. Though some companies and individuals helped the government in donating food stuffs and other facilities needed. The government also got foreign support like free vaccines and loans to help to meet its needs.

The economy has been affected due to;

1.  Negative impact of anticipated economic growth rate

2.  Negative impact on imports.

3.  Negative effect on the balance of payments position.

4.  Foreign financial flow effects.

5.  Uganda shillings depreciation effects.

6.  Redundant domestic capital.

7.  Inflationary pressures due to supply side shortages.

8.  Reduced revenue collections.

9.  Unanticipated increase in health spending.

10.   Reduced investment and increased joblessness.

11.   Manufacturing sector effects.

12.   Reduced domestic trade effects.

13.   Oil demand shocks.

14.   Loan disbursements

The possible solutions put for the pandemic include

1.  Creation of a Uganda coronavirus Relied Fund.

2.  Creation of national task force.

3.  Intensifying the Buy Uganda Build Uganda policy and campaign.

4.  Creation and stocking of food banks.

5.  Increase of agriculture sector funding by government.

6.  Payment of government domestic arrears.

7.  Re-prioritization of the budget.

Uganda’s economy rebounded strongly as domestic economic conditions improved. The third wave of covid-19 infections was also milder and is now over. On 8th June 2021, the economic growth outlook is 2.6 percent in the 2022, and acceleration to 6.4% in the 2023 fiscal year.

 

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