Dr Ramathan Goobi, the PS for Ministry of Finance

The restrictions put in place to contain the spread of Covid-19 in Uganda have had severe impact on the various sectors of the economy.

The instituting of the 7pm curfew has affected most businesses, especially those in the informal sector, including Micro Small and Medium Enterprises (MSMEs).

A substantial number of enterprise/ firms downsized to reduce operating expenses while others closed entirely. Consequently, there was a significant rise in unemployment.

But on December 31, 2021, President Museveni announced the reopening of schools and full resumption of public transport, adding that curfew will be lifted on January 24, two weeks after schools have reopened.

And now, the Ministry of Finance is hoping that resumption of the night economy will uplift economic growth.

The monthly performance of the economy reports released by the finance ministry, indicate that due to the effects of COVID-19, the government has been registering shortfalls every month.

For instance, combining monthly revenue shortfalls of July of shs144.3b, shs170b registered in August, shs197.9b recorded in September, and shs151.1b registered in October, the total revenue shortfall for the first four months of the current financial year is to the tune of sh663.38b.

The finance ministry is optimistic that with the full re-opening of the economy, revenue collections will significantly increase.

According to Ramathan Ggoobi, the Finance ministry Permanent Secretary, now that the President has reopened the economy, they plan to support recovery of households, businesses and economy.

He says the plan includes ongoing fiscal and monetary stimuli as well as new interventions such as capitalization of SACCOs and Emyooga to support micro businesses.

“Through the Microfinance Support Centre (MSC), GoU is going to continue targeting the financially excluded including farmer groups, active poor, and other informal businesses. A total of UGX 77bn and 260b has been disbursed to support SACCOs and EMYOOGA respectively. The interest rates charged by MSC are 8% for SACCOs/Groups and 13% for agricultural SMEs. MSC has so far established 6,602 SACCOs, and 205,710 saving groups. These are operating 4.1M accounts countrywide,” he says.

Mr Ggoobi says the government has also put in place the Small Businesses Recovery Fund (SBRF) where they have set aside UGX 200b to support formalized small businesses (employing 5 – 49 people with an annual turnover of between UGX 10m and UGX 100m) to recover.

Those eligible should submit application to their bank (no need to open a new account). All GoU owned banks (Housing Finance Bank, Post Bank, and Pride Microfinance) as well several other banks are lending the SBRF, he says.

The PS adds that the Uganda Development Bank (UDB) UDB plans to disburse credit of UGX 612 billion between January and Dec 2022 to medium and large businesses.

The minimum loan size is UGX 50 million (for SMEs and Youth) while maximum is US$ 10 million dollars (UGX 36bn).

“The loan application form requires (among others): a copy of registration or certificate of incorporation or any other form of licensing; details of business ownership; number of employees; annual revenue projections from the business; and loan amount required,” he explains.