With the global economic impact of the novel coronavirus mounting, Uganda has braced itself for the effect, said a senior official on Thursday.
Ugandan Minister of Finance Matia Kasaija told parliament that the east African country has suffered the effect of the pandemic, which forced the country to lower its economic growth projection for this financial year by 0.3 to 0.8 percentage point.
Kasaija said the projection was downgraded from the targeted 6 percent for the financial year 2019/2020, adding that in the worst scenario millions of Ugandans would be pushed into poverty.
The minister said the government has taken measures to mitigate the economic impact of COVID-19, even though it has yet to report any case.
“To deal with this economic shock, both fiscal and monetary policy adjustments would be required,” Kasaija said.
He noted that fiscal policies will play a critical role in mitigating the negative impact of the pandemic on economic activities and challenges in the affected sectors, while monetary policies will help reduce the impact of the deterioration of the Balance of Payments (BoP).
The minister said regarding the negative influence on the BoP, Uganda will seek support from the International Monetary Fund, and its assistance would help Uganda’s central bank, Bank of Uganda, ensure that international reserve buffers remain strong and the exchange rate remains stable.
Kasaija said the government will also seek a concessional loan from the World Bank to deal with the financing gap in the national budget for the financial years 2019/2020 and 2020/2021. The amount would be 100 million U.S. dollars and 90 million dollars for the respective financial years.
Uganda has been considering beefing up the implementation of the import substitution and export promotion strategy, the official added.
“This will reduce our dependency on imported inputs and final goods in case of trade disruptions and other global economic shocks,” Kasaija said.
During a televised national address about COVID-19 on Wednesday, Ugandan President Yoweri Museveni said the misfortunes of the pandemic should be turned into an opportunity.
Regarding the outbreak as a wake-up call for Africa to stop entirely depending on others, the president said that the continent’s huge import bill can be turned into a boost for domestic manufacturing capacity.
Museveni said Uganda’s import bill is 7 billion dollars.
“Everything you have been importing, except for petroleum products for now, now make here. The 7 billion dollars you have been using to import, keep it here. Turn misfortune into an opportunity,” Museveni said. (Xinhua)