Pick up the Pieces and Jump Start the Economy

The impact of the COVID-19 pandemic cannot be over emphasized. Many analysts and writers have explored this subject over the past two years and many have arrived at similar conclusions: the business environment has been uncertain with the situation remaining fluid for many businesses. Even with vaccines now available, the overwhelming demand and the mutation of this virus only raise more uncertainty for the foreseeable future. The biggest impact has been on human life with the virus ravaging through the globe causing fear, multiplied infections and deaths. All economies have suffered greatly, and many have been brought on their knees with certain sectors suffering the brunt of it all.

Here in Uganda, education, tourism, entertainment and hospitality have been worst hit. These have suffered partly as a result of the sustained measures being implemented locally and globally to contain the spread of the virus, but also because of the heightened phobia to travel and mingle. While other sectors have been resilient through, there is uncertainty about the evolution of the virus and the viability of the vaccines to protect against new variants. The recent terror attacks in Kampala have also not helped in as far as creating fear and anxiety, coupled with the slowed integration of the East African Community as member countries have been more inward looking over the past couple of years leading to closure or restriction of cross-border trade across three of Uganda’s borders, that is Rwanda, Kenya and Tanzania. This has affected a number of local producers especially in agri-business.

Many of the key players within the economy have struggled to stay resilient – with some laying off employees, effecting salary cuts, closing down business units, reinventing themselves through digital, and enforcing SOPs. The turnovers have stagnated or declined (apart from some obvious outlier sectors) and the anchor banking industry has consequently suffered declining credit quality, multiplied defaults and increasing levels of non–erforming loans . Resultantly, systemic risk in the economy has increased requiring both time and effort to even out.

What is becoming increasingly clear is that, a resurgence in the economy requires the combined effort of all players (public and private) in reviving aggregate demand. In the private sector more sophistication needs to be proliferated widely to reach clients efficiently and serve them effectively; data analytics and technology should be employed more than ever before to help optimise cost structures and align business models, products and market segments; more focus should be placed on the health (mental and physical) of workers to ensure sustained efficiency, empowerment and gusto to deliver on the entities’ value propositions.

On the other hand, the public sector must more than ever before create a conducive atmosphere for recovery and should explore more stimuli including faster settlement of arrears owed to the private sector, more localised procurement at all levels, implementing a more flexible and supportive tax regime, improving efficiency of all supporting infrastructure, spending more on sectors with higher multiplier effects, massively reducing the public wage bill through rationalisation of offices and agencies, fast-tracking the Oil & Gas Sector, building capacity of citizens at all levels, stamping out corruption and engendering more accountability across the board.

These need to be done with rigor and consistency even as we pick up the pieces to rebuild a more resilient, sustainable and inclusive economy.

Page 2 of 9 results