Coronavirus Effect: Uganda seeks $190 million to support the national budget

Uganda seeks $190 million to support budget over Coronavirus disease (COVID-19)

Uganda plans to borrow $190 million to support the national budget as a result of the shortfalls Coronavirus disease (COVID-19).

Uganda through the Ministry of Finance is seeking parliament approval of $190 million to support the national budget as a result of the shortfalls caused by the deadly Coronavirus.

This was in a government statement presented before parliament during the Thursday 19th March 2020, sitting on the economic impact of COVID-19.

The Minister of Finance, Matia Kasaija says, as a result, the country’s GDP growth is likely to stag from 3.9 to 2.4 per cent and the country has started experiencing shortages in the supply of different goods, medical equipment, and smartphones.

“Coronavirus outbreak is already harming the global economy. The projection for economic growth in the financial year 2019/2020 has been revised downwards,” Kasaija said.

Minister Kasaija says the effect of Coronavirus is now felt in the aviation sector, the tourism sector which has left the economy staggering.

“Travel restrictions are already affecting the tourism sector, including hotels, accommodation and transportation. The supply chain distraction is accompanying trade and this is expected to continue until the virus is contained at a global level. Travel restrictions at the global level will also affect the flow of imports into the country leading to distraction in the supply of inputs into the industry sector,” Kasaija said.

“The pandemic has already laid shortages of drugs, industrial chemicals, medical equipment and consumer goods like smartphones as factories in China shut down,” Kasaija said.

Over 770,000 Ugandans according to Kasaija are likely to be pulled back into poverty because many employees are expected to lose their jobs causing a decline in economic growth.

Kasaija said importation of goods into the country is to reduce by 44 per cent asking Ugandans to adapt to the changes. He, however, said Ugandan should produce some of the imports locally in line with the country’s import substitution and export promotion strategy.

The minister also said that there’s likely to be a slowdown of the implementation of some government projects like roads, construction among others.

Now, as a result, Kasaija said his ministry is seeking a loan of 190 million USD in a bid to support the national budget.

“My Ministry will seek for a budget support loan on quotation terms worth 100 million dollars and for this financial year and 90 million dollars for the year to come,” Kasaija said.