Coronavirus: Draw plan to save economy
What you need to know:
- The issue: Coronavirus.
- Our view: Government needs to reassure people that the economy will suffer less shocks and business will resume so that taxes can be paid and the State collects revenue to run government. There is need of an initiative like a marshal plan well in time to prepare for any eventualities.
The world probably did not expect this to happen, and when it occurred, there were no contingent plans to either fight the spread of the pandemic, or even prepare for worst case scenarios that would hit the economies.
In the latest measures to curb the spread of the coronavirus in Uganda, government has banned public transport for 14 days and has partially allowed markets to operate, but to only sell foodstuffs in an effort to scale down further spread of Covid-19. On Wednesday, government confirmed five new cases, bringing the total number of victims to 14.
Last week, President Museveni announced a raft of measures intended to control the spread of coronavirus, including closing schools, bars and churches, among others.
What, however, remains to be seen is how government will come up with a stimulus package to mitigate the effects coronavirus disease outbreak is going to cause on the economy.
The closure of bars, shops and banning of public transport, that involves omnibuses, matatus and buses which employ a sizeable number of people, is likely to impact negatively on the economy, worsening the already bad unemployment problem.
Therefore, acts of criminality such as burglary are likely to soar because a good number of the youth who are engaged in these transactions and other petty businesses will be staying away from their work. These acts are likely to become a security problem.
The stalling is also going to happen to businesses. During the partial lockdown, government is going to collect less revenue, because businesses will not be able to remit all taxes because they are closed, which is a legitimate concern. The resource envelop is thinning and this not being a welfare state, government may not have the resources to go around everyone in the event of a total lockdown.
However, there should be a way, either in providing subsidies, or introducing waivers during or shortly after this pandemic to try to resuscitate both the economy and individual businesses. This will mitigate the after-effects of the coronavirus outbreak.
That is why government needs to reassure people that the economy will suffer less shocks and business will resume so that taxes can be paid and the State collects revenue to run government. There is need of an initiative like a marshal plan well in time to prepare for any eventualities.
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