MBALE – Just before March 2020, Mr Silas Wodulo, a local businessman in Budadiri town council who owns a retail shop, used to sell up to Shs 700,000 in a single day.
This was before the government of Uganda imposed a lockdown on all businesses and restrictions on how to conduct business as part of global and local responses to control the spread of COVID-19.
The government implemented a number of social distancing measures that included ordering citizens to shelter in place, shuttering “nonessential” businesses and placing restrictions on businesses that were allowed to continue to operate.
Mr Wodulo like any other businessmen in the country, therefore, registered losses and are still facing staggering losses due to the interruption of their business operations.
He says today he can’t go back to business because he used most of his capital during the lockdown and that even the rent for the shop he was using has accumulated to Shs 900,000.
“I have no work to go to because my capital is used up and I can’t go back to the shop because I can’t afford the rent, this is what COVID 19 has done to me, I now have no business to do,” said Mr Wodulo.
Mr Wodulo is not alone, there many businessmen across the country whose businesses have crumbled due to COVID 19 lockdown and sent the owners out of business.
The Brookings Institution in Washington, DC says due to Covid 19 pandemic micro and small businesses experienced a larger decline in business activity compared to medium and large firms—an unsurprising finding since most of the micro and small businesses halted operations due to their inability to implement preventative health measures.
The Brookings institution findings come at the time a fact sheet by Twaweza’s flagship Sauti za Wananchi survey, Africa’s first nationally representative high-frequency mobile phone survey also indicated that one out of 10 citizens has no work to go back to after the lockdown.
The fact sheet says that this is slightly higher in urban areas (10%) compared to rural (7%) and that among those who have no work to go back to, four out of ten (39%) say they will have to depend on friends and family, while three out of ten (29%) say they produce more food and/or use food stocks they already have.
The survey adds that among the businesses that are no longer operating, three out of ten (27%) have shut down or suspended operations due to the lockdown, either because they have been directed to do so as part of the national measures to prevent the spread of COVID-19, or because such measures (such as transport restrictions) have made it impossible to operate as normal.
The data comes from Sauti za Wananchi survey, a nationally-representative, high-frequency mobile phone panel survey of public opinion and citizens’ experiences and were collected by the Food Rights Alliance and Twaweza.
The data was released by the Food Rights Alliance and Twaweza in a factsheet entitled, Livelihoods under COVID-19: #1 Livelihoods and inequality and is based on data collected from 1,600 respondents across Uganda in May and June 2020.
Dr Fred Muhumuza, an economist says that at least 43 percent (18m) of Ugandans are vulnerable and because of the lock-down, it means a huge fraction of these will easily fall back into poverty.
He revealed that as many as 15 to 17 million Ugandans will likely fall into poverty as the coronavirus (COVID -19) blockade takes a toll on the economy with their day-to-day income sources shut down, analysts have said.
“And those most likely to fall into poverty are the vulnerable Ugandans that have been sitting on the cliff – occasionally falling below and above the poverty line whenever there is a small shock,” said Dr Muhumuza.
Mr Matia Kasaija, the minister of finance, planning and economic development while addressing the nation also said “the low activity in industry and services sectors will result in loss of jobs further leading to a decline in economic growth and an increase in the level of poverty. The number of people that could be pushed into poverty is estimated at approximately 780,000.”
The data released on 9 July reveals that among the businesses that are no longer operating, three out of ten (27%) have shut down or suspended operations due to the lockdown, either because they have been directed to do so as part of the national measures to prevent the spread of COVID-19, or because such measures (such as transport restrictions) have made it impossible to operate as normal.
The fact sheet reports that on the side of businesses, a significant 4 out of 10 (41%) are no longer operating because of the lockdown or due to other Covid-19 mitigation and management measures.
“And significant numbers have drawn on savings (16%) and others depended on government assistance (14%). In rural areas, depending on family and friends has also been significant (25%) along with harvesting food from their garden (17%),” reads the fact sheet seen by PML Daily.
The data says that a quarter of households (26%) report that when there is not enough money to cover daily needs they find ways to cut expenditure and that this is more common in urban areas (32%) than rural (23%).
“And urban households are also more likely to get items on credit while those in rural areas are more likely to borrow money, sell something or seek casual work,” reads the report in part.
The data reveals that as COVID-19 takes its toll on Ugandan’s pockets, households are spending 30% less compared to January 2020 and that more households are finding their income does not meet their daily needs.
“On average, Ugandans report that their households spend UGX 10,800 per day, down from UGX 14,100 in January of this year. The drop has been sharper in rural areas (from UGX 14,600 to UGX 10,300) than urban (UGX 13,100 to UGX 12,300). Despite this, more households find their income does not meet their daily needs now compared to January (26% compared to 22% previously)” reads the report further in part.
Ms Marie Nanyanzi of Sauti za Wananchi at Twaweza, said these data provide some early insight into a new economic order for Ugandans following Covid-19 and that the intensifying pressure on citizens’ ability to meet basic needs is clear.
“Important changes in people’s spending and financial management are already apparent – from quiet belt-tightening to growing unwillingness to ask for help from our neighbours. The data also reveal that, contrary to expectation, rural households are facing even greater financial strain than their urban counterparts. Without thoughtful and assertive intervention, all Ugandans may face even harder times ahead,” said MsNanyanzi.
Ms Agnes Kirabo, the Executive Director Food Rights Alliance said the data shows the gap in Uganda’s food governance system; whereas household food security has been more resilient to shocks such as pandemics, national food security suffers under such shocks, weakening household food security further.
“Enhancing national food resilience requires a holistic approach with a well-defined and significant role for the state,” she added.
She said COVID 19 serves to remind the government to put back food in its primary position as a national priority due to its significant role in macro-economic stability, human security, and national stability overall as well as, as an underlying determinant of other social outcomes such as health.”
“Appropriate frameworks are required as a matter of urgency to govern food production, food trade and food consumption to ensure sustainability, stability and safety,” she concluded. –