Pandemic stimulus not sufficient for Ugandan businesses

By Kabona Esiara

Ugandan businesses are still low on funds even after the Ministry of Finance, Planning and Economic Development injected a stimulus package of Ush13,208 billion ($3.7 billion) into the economy to help them weather the economic impacts of Covid-19.

As part of the stimulus package, private loans in commercial banks were restructured, development financer Uganda Development Bank (UDB) recapitalised to finance distressed companies, businesses directly benefited from tax rebates and deferrals and youth and women entrepreneurs got seed capital. However, businesses in Kampala The EastAfrican spoke to are still reporting a drop in cash flow and low foot traffic.

Data from Uganda brewers indicate that 60,000 bars countrywide employing 1.8 million directly and four million people indirectly remain closed.

According to the Uganda Bureau of Statistics, before Covid-19, the entertainment industry contributed Ush141.5 billion ($40 million) to the GDP in fiscal year 2017/2016.

“Over a million businesses in the country are struggling, explaining why the size of the economy has been halved,” Jjemba Mulondo, one of the leaders of Kampala City Traders Association said.

The slow businesses activity in the country has sent economic managers back to the drawing board.

This article originally appeared in The East African.

Photo: File