Trade Minister asks Ugandan businesses to adapt to coronavirus crisisKyambadde suggested the global pandemic creates an opportunity for Uganda’s industries to add value and do final processing of some of their products locally.
Ugandan industrialists and business people have been asked to take advantage of the current coronavirus (covid-19) crisis to explore sourcing more of their supply chain inputs locally.
The respiratory disease pandemic that broke out in China late last year is quickly spreading around the world and disrupting a whole range of leading economies. To date, about 6000 people have already died of the disease with those infected by the virus heading towards the 170,000 mark. Coronavirus causes respiratory illness, (like the flu) with symptoms such as a cough, fever and in more severe cases, pneumonia and at worse, organ failure.
“This epidemic will limit input sourcing from China and final consumables but creates an opportunity for Uganda’s industries to add value and do final processing of some of their products,” Amelia Kyambadde, the trade and industries minister told a dfcu Bank Customer Dialogue recently in Kampala.
She advised the business community to pull their resources together and aim towards local production of some of their inputs and other items they are currently importing. She said this would improve Uganda’s self-sufficiency, especially now with a breakdown in the international supply chains and markets.
By mid-day Monday March 16, Ugandan authorities had yet to report a confirmed case as opposed to neighbours, Democratic Republic of Congo (2), Rwanda (5) and Kenya (2). In tandem with Rwanda, on Sunday the Kenya government directed the closure of schools and other educational institutions while other governments in the region have stepped up mandatory testing at frontier points and advised against large gatherings. Restaurants and entertainment spots may soon become no go areas depending on the rate of the spread.
Delivering the keynote address at the dfcu Bank event, Francis Kamulegeya the Managing Partner at, PricewaterhouseCoopers (PwC) advised businesses to consolidate their resources and put up factories instead of importing everything from outside.
““The common consensus is that the coronavirus crisis will get worse before it gets better. For Uganda, there will be negative economic side-effects because most of the markets to which we import from have been substantially affected.
“The trade and retail sector which is a key aspect of our economy will be widely impacted by the coronavirus. We must accept that doing nothing is not an option. The business community and the government must work together to mitigate the negative effects of this pandemic,” he said.
The KACITA Chairman Everest Kayondo said Ugandan importers have not yet felt the true effects, because by the time the coronavirus became rampart, they had secured most of their stocks as China was going into the annual New Year celebrations.
“The real effect will be felt in April when the shelves become empty and we are unable to make new orders. Uganda Revenue Authority will also be highly affected because international trade contributes a big percentage to Uganda’s tax revenues,” he said.
According to a recent survey done by Oxford Economics, the spread of the virus to regions outside Asia would knock off 1.3% from global growth this year, the equivalent of $1.1 trillion.
Mathias Katamba, the dfcu Bank Chief Executive Officer said they are ready to support and stand with customers during these hard times. “In the financial sector in Uganda, we are yet to feel the actual effect, but we know that some of our partners in the hospitality, tourism, logistics and aviation sectors are quickly feeling the impact. It is estimated that the worldwide aviation industry will lose up to $113 billion this year. As the crisis disrupts global value chains, which are essential for economic growth, there is a need for companies to focus on preparedness and response to risk,” he said.
Katamba suggested businesses to among other things, look at their overhead costs and other cost drivers during this period and engage their banks in time in case of cash flow constraints alongside their financial obligations.