Time for a new normal as East Africa eases lockdown restrictions

Saturday June 6 2020

A view of deserted streets as part of

A view of deserted streets as part of coronavirus measures in Kampala, Uganda on April 3, 2020. PHOTO | ABUBAKER LUBOWA | AFP 

CHARLES M. MPAGI
By CHARLES M. MPAGI
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After two-and-a-half months of almost exclusive focus on interventions to curb the spread of the coronavirus pandemic, Ugandan President Yoweri Museveni has turned his attention to the economy.

Outlining his bailout plan for an economy straining under the choke of a stringent lockdown, President Museveni addressed the nation on Thursday, as commuters and public transport operators struggled to adjust to new conditions set as part of the phased re-opening of the economy.

Bus and commuter taxi operators failed to resume operations as officials at the Kampala Capital City Authority and the Ministry of Transport raced to restart their operations and harmonise the implementation of Standard Operating Procedures (SOPS).

The authorities had also sought to take advantage of the lockdown to re-organise what many see as a chaotic public transport sector dominated by private operators of 14-seater commuter mini-buses, 32- and 60-seater buses and motor cycle taxis known as boda bodas.

The confusion left hundreds stranded in the city and upcountry.

President Museveni, for the first time in his 35-year rule, delivered his address to Parliament via video link from State House with only First Lady Janet Museveni by his side.

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Under the dictates of physical and social distancing due to the pandemic, Speaker Rebecca Kadaga chaired the session from tents in Parliament’s former parking grounds. In attendance were Vice President Edward Kiwanuka Sekandi, Chief Justice Bart Katureebe and his deputy Alfonse Owiny-Dollo.

Relief for businesses

In a raft of 11 stimulus plans, the president announced relief for businesses by suspending payment of Pay As You Earn (PAYE) for four months, and said the government would expedite payment of its domestic debt to provide liquidity for private firms that have been affected by the Covid-19 lockdown.

Corporations and medium-sized enterprises affected by the lockdown will be allowed to delay payment of corporation tax or presumptive tax due between April and June, while those in manufacturing, tourism, horticulture and floriculture have up to September 2020.

President Museveni also proposed waiver of interest on tax arrears and said the Bank of Uganda had already announced measures to ease pressure of loan repayments to commercial banks. The Uganda Development Bank will be recapitalised to the tune of Ush1 trillion (about $2.5 billion).

He said the economy had remained resilient in spite of the lockdown measures.

Fred Muhumuza, an economics lecturer at Makerere University, said the President’s intervention could only go so far, as he has little room to manoeuvre.

“He is limited on what he can do,” Mr Muhumuza told The EastAfrican.

“I would advise those businesses that can afford to pay, for example, PAYE, because this is not a waiver it’s only a suspension to aid short-term liquidity pressures. But you will still have to pay later so you don’t want to be under pressure to make bulk payments in December when you can afford to pay it today,” he said.

Commitments

Godbar Tumushabe, of the Great Lakes Institute for Strategic Studies, a Kampala-based policy think-tank, said the president fell far short of providing an annual accountability of commitments he made at his last State of the Nation address.

Mr Tumushabe said President Museveni missed the opportunity to address the challenges presented by the Covid-19 pandemic.

“Parliament already appropriates hundreds of billions of shillings to the president for handing out as donations or gifts to people. How do you tell me that an allocation of Ush100 billion ($27 million) to the Uganda Development Corporation is a serious intervention at a time like this?” Mr Tumushabe posed on the NTV talk show On The Spot on Thursday night.

President Museveni said that the country was doing well despite being besieged by the Covid-19 pandemic, floods and locusts all at the same time.

It is not clear whether the interventions will be included in the budget speech to be presented next week, given that it has already been passed by parliament.

The president presented his stimulus interventions as “proposals” by the Ministry of Finance.

“The president said the Ministry of Finance is proposing the following measures to provide liquidity to private firms affected by Covid-19, but is not clear whether these are actual policy positions,” said former leader of opposition in parliament, Nathan Nandala Mafabi.

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