Kyambadde meets business leaders over Coronavirus crisis impact on trade

Dfcu Bank customers, have this morning spent time discussing how their businesses will survive the global COVID-19 (Corona Virus) outbreak. The engagement comes at a time the viral disease is taking a toll on world economies, with some markets experiencing the worst financial plunge since the 2008 financial crisis. As the human cost of the outbreak continues to rise, the economic cost also continues to mount as well.

According to a global survey done by Oxford Economics, it has been forecast that the spread of the virus to regions outside Asia would knock 1.3% off global growth this year, the equivalent of $1.1trillion in lost income.

The World Health Organization declared the Novel Coronavirus outbreak a pandemic and it's now affecting 138 countries according to BBC news. Over 129,587 cases have been recorded of which 68,667 have fully recovered and 4,749 died.

The current impact on the global economy; the virus outbreak has become the biggest threat on the global economy and financial markets, the global economy is expected to have a lower development growth of 2.4% in 2020 than the projected growth of 2.9% before the outbreak.

Speaking during the engagement the Minister for Trade, Industries and Cooperatives, Hon. Amelia Kyambadde said;

“The persistence of this pandemic may limit input sourcing from China and final consumables from traders. But this creates an opportunity for Uganda’s industries to add value and do final processing of some of their products."

"Uganda is the food basket for Africa and therefore we ought to process and package our products and export to the region. Additionally, this is also an opportunity to embrace digitalization as members of the business sector so as we can reduce the cost of doing business. E-commerce should be highly considered during this time.”

"This creates an opportunity for Uganda's industry to add value to do final processing in some of the consumables like foot ware, we've been exporting our animal hides and skin in raw form which reached a tune of USD34 million per annum, this is the time for Ugandans to wake up and look at this as an opportunity. Clothing averaged to USD 23.3 million."

“Government is committed to doing business with the local business community and Uganda Development Bank is working on offering affordable credit lines. We would also like to encourage Ugandans to utilize domestic tourism to create an opportunity for the country so that we retain the money within the economy. I reiterate my appreciation for dfcu Bank and I am impressed with the way they manage their business with a lot of care and concern. The way they look after and encourage women’s businesses as well,” she added.

“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 need for companies to focus on preparedness and response to risk.

Business leaders should take initial steps now to monitor and prepare for the impact on their operations. We need to deploy short-term strategies to become more resilient and make longer-term considerations that will reconfigure supply chains to protect against risks,” added Mr. Katamba.

The impact to Uganda, China is a leading market for Uganda inform of inputs and other commodities, from 2015 - 2018 on average, China accounted to over 16% of Uganda's imports implying USD 5.51 Billion on average of inputs per annum for Uganda. So Uganda's imports from China stood at USD 0.87 Billion per annum. With the virus effect, this trend is expected to drop drastically.