Workers feel the pinch of Covid-19

The blood on Baluku Herbert’s gloves was still etching into the latex when he stepped out of his nursing shift at a health facility in Kasese District.

As he made his way to the cafeteria to grab a cup of tea, he passed by a notice board where he was shocked to see his name before realising he was being laid off.

Like him, Anyaka Maleng found out through a phone call that her and 20 others would no longer be required to come in at an NGO she had recently taken up a job with.

For Maureen Alinda, 50 per cent of the March salary came in late April and the April salary (still unpaid) carried a letter of redundancy.

Whether it is the floating letters on social media or the buried emails on company servers, many salaried employees are bearing the brunt of pay cuts, redundancy or termination all together.

The global pandemic, together with killing millions is expected to take 1.6 billion people out of the workforce and disrupt the work spaces of some 430 million companies, the United Nations, predicts in a report.

Situation in Uganda
For Uganda, the Minister of Finance estimated it would drive some 780,000 people into poverty.
Some governments have stared this bleak figure in the eye with all round economic stimulus packages which have included cuts to Pay As You Earn and corporation taxes like the Kenyan government.

While others are simply putting money in people’s pockets and sacrificing a tenth of the national input like South Africa.

As for Uganda, speech after speech, workers have worn out seat-edges and rationed free government flour and beans in earnest.

“I do not feel the government has even begun to do anything for the economy to be honest,” Damalie, a laid-off marketer decried.

Damalie had been laid off by a technology firm with global operations.

She was typing away a communications proposal for the firm when midway, an email, interrupted her informing Damalie that her source of livelihood was being taken away.

Later that evening, she watched a news clip in which the Minister of Finance, Mr Matia Kasaija, said a prospective economic stimulus package was on its way.

There had been stop-gap measures taken; the central bank had lowered its lending rate to an all-time low of 8 per cent and promised banks ‘exceptional liquidity’.

For the central bank, if the manufacturing and distribution remained intact, then the economy would stay afloat. But Damalie, Baluku, Anyaka and Alinda lay on the other side of the coin.

The one that consumed these products using salaries they earned working in formal employment.

To save them, government needed to take very radical measures in approaching the effect of Covid-19 on the economy.

When Mr Kasaija, packed his briefcase for cabinet, he took with him the magic-bullet. A 26-page cabinet memorandum that outlined what the government could and could not save.

First, the hotels and tour companies, those could not be saved – atleast not until the globe-trotting resumed.

Schools, bars and churches, those too, (pun-intended) were past redemption. Their revenues from early closure would only be on the downward spiral.

But he had marked up some 59 billion shillings to buy relief food to give to homes that would be hit hard by a loss of these revenues.

Kasaija had a very small wallet to work from.

Limited resources
A day before drafting his memorandum, Uganda Revenue authority had put in their numbers, and every sector – except agriculture, forestry and farming, had recorded a down-turn in the first quarter.

The combined GDP losses also meant that what he had predicted, with a whistle, as an economy on the rise was headed for reduced growth and the conservative estimate was that growth would come down to 3.5 per cent from a previous 6 per cent projection.

To feed the national budget which Parliament had passed and also keep the economic stimulus package hopes alive, the ministry was banking on six quick loans from the World Bank, IMF, French Development Fund and the African Development to raise close to two billion dollars.

The IMF and World Bank had jointly deposited some 506 million dollars but the gap left behind was huge to imagine a good economic stimulus package.

If any package would come, according to the documents this paper has seen, it will be to bail out manufacturers, and support trade in exports majorly.

The relief leaves the big question that doctors like Baluku are asking; “Who is saving my job?”

Government collected Shs2.8 trillion in Pay as You Earn Taxes, which was the biggest and most compliant tax collected and another Shs1.1 trillion in Corporation tax.

With a bleak future ahead for corporations and their employees, these may be foregone.
Mr Kasaija has promised to present an economic stimulus package to Parliament in the coming week.

Impact
The coronavirus pandemic has turned out like a flood swallowing workers, wiping out the national celebrations and dumping a very unfortunate debris on thousands of workers in the country inform of non-payment of salaries.

As heads of schools donated to the National Task Force on Covid-19, several teachers, especially in private schools, cried out for relief food saying they had not been paid since the president closed all education institutions in March to combat the pandemic. This sad irony is playing out in other sectors as well.

The Uganda Hotel Owners’ Association revealed that their members have been forced to send at least 400,000 employees on unpaid leave due to the Covid-19 lockdown that has plunged tourism, the country’s biggest foreign exchange earner and other sectors of the economy, into disarray.
But the same hotels have donated at least Shs30 million to the Covid-19 taskforce.