How to improve economy amid Covid-19

Towards the end of 2019, the world was hit by Covid-19, which fast devastated China and later spread across the world. In March 2020, the government put in place measures to curb the spread of coronavirus. This includes closure of schools, places of worship, bars, public and private transport, and shopping mall, among others. While these were targeted to curb the spread of the virus, they disrupted a number of economic activities in an unprecedent manner, it led to the slow down of the economy both economically and socially.

Today, the number of confirmed Covid-19 cases and deaths worldwide is skyrocketing.  This has also resulted in low demand for oil. There is also a growing  rate of underage marriages that has been worsened by the closure of schools.
 
Covid-19 has also led to the decline in the foreign currency inflows and remittances from Diaspora as a result of the disruption in the business and economic activities in many of the countries where the majority of Uganda Diaspora live and work. Currently, about 42 per cent of all the tax collected in Uganda comes from international trade.  This tax is mainly in form of VAT and import duty on imports, and excise duty on the importation of petroleum products and this has led to massive negative impact to tax collections. 

The situation has been worsened by reducing economic activities in retail and trade services, hotels, tourism and manufacturing sectors, which translates into both reduced VAT remittance and corporation tax payment to  Uganda  Revenue Authority. However, the impact of coronavirus affects people every day. Mostly the lockdown, which  was imposed as a mean of reducing the spread of coronavirus, has created a lot of uncertainties on the global economy. So what does a business man or woman faced with Covid-19 challenge do? 

Doing nothing should not be a solution nor an option. You will have to be creative and innovative to mitigate coronavirus’ economic disruptions to  your business. If you are in manufacturing sector and you now faced with a risk of running out of imported raw materials, consider scaling down production as we wait for the situation to stabilise. And if you are in trade and retail sector, review your current stock level and assess how long they are likely to last, carry out robust and regular review of your cash flow.  

However, more needs to be done in order to keep citizens safe from the Covid-19 pandemic, there is need for coherent, coordinated, and credible policy responses in all government ministries, authorities, and directorates, to ensure that the virus does not result into a public health and economic tragedy in our country.  

More so, there should be continuous and consistent advocacy and sensitisation of all government ministries and agencies, international NGOS and development partners, and faith based communities, among others. The public should be given guidelines on how to access medical surveillance teams. 

Ireen Twongirwe,
[email protected]