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Uganda Loses Nearly 500,000 Jobs During Pandemic

ADF STAFF

The COVID-19 pandemic has dealt devastating blows to African economies, shuttering businesses and leaving 13.5 million workers in Sub-Saharan Africa unemployed.

Uganda was not spared.

With a population of just less than 46 million, Uganda has lost nearly 500,000 jobs since COVID-19 hit, according to a study by the Economic Policy Research Centre (EPRC) at Makerere University in Kampala and Canada’s International Development Research Centre (IDRC). Published in June, the study was conducted at the end of Uganda’s second lockdown in late 2021.

The employment sectors most affected were education, which lost 293,000 jobs as schools closed; hospitality and tourism, which lost 90,000 jobs; and manufacturing, which lost 44,000 jobs. Youth and female workers were disproportionately affected.

“A considerable number of enterprises closed business permanently due to direct and indirect COVID-19-related factors,” according to the study. “COVID-19 episodes are also characterized by intermittent business closure of complete and partial nature. By the end of the second COVID-19 lockdown, businesses had not regained their pre-COVID-19 conditions.”

The study surveyed more than 1,500 micro, small and medium-sized enterprises (MSMEs), most of which were “severely impacted” by COVID-19 and related public health measures. However, 40% of those businesses had closed, and 39% could not be traced, implying that they also had closed.

More than half of the businesses surveyed also significantly reduced payroll to ease financial stress.

The study recommended several ways to strengthen the resilience of MSMEs, including:

* Enhance e-commerce.

* Invest in business information centers where small business owners can get support and advice.

* Bolster businesses’ ability to access external resources for growth and development.

* Develop innovative insurance plans.

* Establish or strengthen initiatives that promote innovation and diversification.

The EPRC/IDRC study concluded that the government should pay close attention to the cost of doing business during the pandemic.

“This is crucial for controlling inputs’ costs and ensuring minimal supply chain disruptions,” the study said. “Address key factors that determine the cost of doing business, including transport cost, removing barriers to supply chains, utility cost, and the cost of implementing COVID-19 [standard operating procedures] within the MSME business environment.”

Russian War Exacerbates Woes

Russia’s attack on Ukraine exacerbated the economic woes of Ugandans, as disruptions in supply chains increased the prices of food, fuel and other necessities. Even those who had not lost their jobs felt the pinch.

Ugandans took their frustrations to the streets in mid-July when police arrested eight people protesting inflation in the southeastern town of Jinja. Angry demonstrators burned tires and blocked a busy road, inciting motorists to join them in demanding that the government subsidize basic food items.

The inflation rate for food products reached 13.1% in May, while the price of fuel has doubled since February.

“We of course support this kind of protest,” Solomon Wandibwa, 28, told Agence France-Presse. “The government must act. People are going to bed at night hungry.”

During a national address in May, Ugandan President Yoweri Museveni urged citizens to be frugal when buying imported goods. Museveni has said he is reluctant to lower taxes, arguing that doing so will further damage the economy, AFP reported. Uganda gets much of its wheat, fertilizer and fuel from the warring nations.

Ziana Aigaru, a Ugandan agriculturalist, saw the issue through a different lens.

“Not only fertilizers, by the way, even the herbicides — all have hiked in terms of prices,” Aigaru told Voice of America. “For example, Bukoola [a local agricultural produce manufacturer] is hiking the prices because of the tax that he incurs in importing the chemicals. So, if the taxes are reduced, that means the cost price will reduce.”

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