The current disruptions world trade may soon impact Uganda’s job market with the government projecting a decline in economic activity which may result in job losses.
Finance and Economic Planning Minister, Matia Kasaija in a statement to Parliament on Thursday said that an estimated 780,000 jobs will be lost due to low activity in the industry and services sectors.
“Given the current situation, the projection for economic growth in Financial Year 2019/20 has been revised downwards from 6% to between 5.2 – 5.7 percent depending on the severity of the COVID-19 impact on Uganda,” Kasaija said.
The services sector will be the worst hit given the travel restrictions that are already affecting the tourism sector with reduced hotel and travel bookings.
“Supply chain disruptions are hampering trade, and this is expected to continue until the virus is contained at the global level. Tourism will be severely affected by a sharp drop in tourists coming to Uganda following extensive travel restrictions in the USA, Europe, and Asia,” Kasaija said.
“Tourism earnings are expected to decline significantly in the last four months of the financial Year,” he added.
The government also anticipates a decline in the country’s exports during the last quarter of the financial year on account of a sharp reduction in global demand and travel restrictions imposed by Uganda’s key trading partners in the Middle East, European Union, and Asia.
“Imports will also be affected by travel restrictions and a reduction in demand within the local economy. The majority of Uganda’s imports come from Asia, particularly China which has been the most affected country. Overall, imports are expected to decline by 44% in the last four months of this financial year,” the Minister said.
Coronavirus, a novel infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) was first identified in Wuhan, in China’s Hubei province in December 2019 and recognised as a pandemic by the World Health Organization (WHO) on March 11, 2020.
The WHO has recorded more than 200,000 cases of COVID-19, and more than 8000 people have lost their lives.
Although there is no confirmed case of coronavirus infection in Uganda, President Museveni on March 18, 2020, ordered for the closure of schools and suspended religious gatherings, music concerts, political and social gatherings across the country in an attempt to prevent the spread of coronavirus.
Museveni also banned travels by Ugandans to high-risk countries notably Italy, France, South Korea, China, UK, USA, Sweden, Belgium, Germany, Spain, Norway, Malaysia, Pakistan, San Marino, Austria, and the Netherlands.