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Uganda moves to phased reopening amid rising of COVID-19 cases
In Uganda, according to president Yoweri Museveni, the country will go ahead with its plan to re-open the country despite recording more than 150 Covid-19 cases in three days. Moreover, European Union gives Uganda about $198 million to fund coronavirus response. CNBC Africa spoke to Qatahar Raymond Mujuni, a journalist for more.
Wed, 03 Jun 2020 15:11:05 GMT
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AI Generated Summary
- Uganda faces severe economic repercussions from the extended lockdown, prompting the government to prioritize reopening to alleviate financial strain on the population.
- The reopening poses a substantial risk to Uganda's tourism sector, with an estimated $1.6 billion loss in earnings and a pivot towards agricultural revenue as an alternative income source.
- The country secures $198 million from the European Union to support small and medium-sized enterprises hit by the economic crisis, focusing on capital injections to sustain SME operations.
Uganda is forging ahead with plans to reopen the country despite recording over 150 COVID-19 cases in just three days, President Museveni announced. The decision to lift the lockdown stems from the harsh economic impacts the lockdown has inflicted upon the agrarian economy that heavily relies on the consumption of locally produced goods. The government found itself in uncharted territory, resorting to borrowing billions of Ugandan shillings to sustain itself and provide relief food to its citizens. The economic toll has been severe, prompting the government to prioritize reopening to alleviate the financial strain on the population. However, with new safety measures in place, including mandatory mask-wearing and limited occupancy in public transport and private vehicles, the government is aiming to strike a delicate balance between reviving the economy and curbing the spread of the virus.
The reopening poses a significant risk to Uganda's tourism sector, which is estimated to lose approximately $1.6 billion in earnings due to the pandemic. The country heavily relies on tourism, particularly drawing tourists from the United Arab Emirates and Europe. With international flights grounded and borders closed, the prospect of attracting tourists remains bleak. The government anticipates a complete halt in tourism revenue for the fiscal year, leading to a pivot towards bolstering agricultural revenue as an alternative income stream. Amidst the challenges, there are discussions around fostering domestic tourism opportunities to compensate for the loss in international arrivals.
To mitigate the economic fallout, Uganda has secured $198 million in credit and grants from the European Union to fund its coronavirus response. The funds are earmarked for supporting small and medium-sized enterprises (SMEs) hit hard by the economic crisis. SMEs form the backbone of Uganda's economy, driving both production and consumption activities. Many of these enterprises, particularly in the agriculture sector, have experienced disruptions to their earnings, necessitating capital injections to sustain their operations. The government's focus is on channeling the EU funds towards the Uganda Development Bank to ensure SMEs have access to the essential financial support needed to weather the economic storm.
The phased reopening of Uganda amid the persisting threat of COVID-19 underscores the delicate balance between economic recovery and public health safety. While the government grapples with the complexities of jumpstarting the economy and safeguarding its citizens, the road ahead remains uncertain. The gamble to reopen carries both risks and opportunities, shaping Uganda's trajectory in the post-pandemic landscape.
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