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State of the Nation Address: Will the economy stand?

By Chris Kiwawulo

Added 4th June 2020 12:50 PM

State of the Nation Address: Will the economy stand?

Left to right: Kayondo, Awori and Mayambala

COVID-19 | ECONOMY |

With the country's economy and social life paralysed by the global COVID-19 pandemic, there are high expectations in President Yoweri Museveni's State-of-the-Nation address Thursday.

Ugandans interviewed by New Vision overwhelmingly expect the President to address challenges relating to the COVID-19.

A State-of-the-Nation address is a requirement under Article 101 of the Constitution. The article requires the President to deliver the address at the beginning of each session of Parliament and at any other time agreed with the Speaker.

Traders, manufacturers and entrepreneurs

Everest Kayondo, the Kampala City Traders Association (KACITA) chairperson, said the President should talk about the way the Government plans to handle the effects of COVID-19 on the economy, especially businesses.

"We might have saved lives in the fight against COVID-19, but the pandemic has left the economy in tatters. We expect the President to tell the nation the concrete plans they have come up with to ensure that the economy recovers," he said.

Kayondo wants the President to tell the nation adjustments the Government has made in the budget to ensure that traders cope with the challenges brought about by COVID-19. Kayondo said he also expects to hear how prepared Uganda is in case the country experiences another wave of COVID-19.

The former executive director of Uganda Manufacturers Association, Haji Muhammad Ssebaggala Kigozi, said he expects the President to address matters pertaining to how the manufacturing sector will be rejuvenated.

"Manufacturers have lost a lot of money. Since about January, we have not had good business and some people have completely closed their businesses. Some of us had borrowed money from commercial banks, but the issue of servicing the loans in the face of COVID-19 challenges is not clear. We expect the President to talk about this with matters like the rescheduling of loans being made clearer," Kigozi said.

He also wants the President to talk about the issue of Buy Uganda Build Uganda (BUBU), as a way of empowering local content. Kigozi also expects to hear of money being availed to Uganda Development Bank (UDB) to enable manufacturers access affordable loans. "It should be a good figure so that it does not run out so fast," he also said.

Ali-Shah Jivraj, a budding entrepreneur, commended Museveni for his leadership in the fight against COVID-19, but said he hopes to hear how Uganda's post-COVID-19 economic challenges will be handled.

"The biggest issue now will be the challenges with our economy post COVID-19. The economy may feel a number of impacts. As an entrepreneur, I would like to hear the President talk about an increase in public spending and undertaking new ambitious projects as soon as possible," Jivraj said.

Jivraj, who is also a real estate developer, hopes to hear how the Government will ensure greater cash flow within the economy and create more job opportunities since there have been a number of casualties in the job market.

He also wants the President to explain how entrepreneurs will easily access funding with less stringent conditions from financial institutions such as UDB as a way of spurring investments and the flow of cash in the economy.

"While we do understand that the economy survives on the collection of taxes, it is critical to understand that just like every investment that has lost business, the revenue body is no exception. I expect to hear tax incentives for investments post-COVID-19. For instance, if someone decided to invest  in real estate or new projects, a preferential tax rate should be applied to encourage them to create more jobs," Jivraj said.

The Uganda Tenants, Needy and Squatters Association chairperson, Haji Muhammed Kigozi Katanyoleka, expects President Museveni to talk about how the rent impasse between the landlords and tenants created by COVID-19 will be resolved.

"Many landlords are already sending tenants messages demanding rent, yet tenants have not been working for over three months now. The landlords are also saying they have bank loans and the requirement to make monthly payments by commercial banks is what pushes them into asking rent for that rent," Katanyoleka observed.

Hoteliers, tour operators, construction

Kayondo, who is also the chairperson of Uganda Tour Operators' Association, said they expect the President to talk about the plans and standard operating procedures they will have to follow when they resume receiving tourists.

"Are there standards that the Government intends to put in place that we shall follow as tour operators? For instance, will tourists be required to produce COVID-19 certificates showing they tested negative? Or when the vaccine is found, will they be required to produce a certificate showing that they were vaccinated?" Kayondo wondered.

Tour operators also want the President to explain the Government's marketing strategy to attract tourists once the national, regional and international borders open.

According to President Museveni, Uganda is likely to lose $1.6b (over sh6 trillion) in tourism revenue due to the COVID-19 pandemic.

Eng. Pius Mugerwa Mugalasi, a hotelier, said he expects to hear about waivers for businesses.

"The hotel business is the worst hit. It is down because it moves with tourism yet borders and the airport are closed to tourists.

"It is likely to take long before hotels pick up, yet they are still using power and water. So, we expect the President to talk about waivers, especially on power, water, income tax and VAT because some of us have loans," he said.

On the construction sector, Mugalasi expects to hear about a stimulus package in the form of giving local construction companies priority when it comes to the awarding of tenders.

"In some countries, local companies have been deliberately given priority by their governments while awarding contracts. This will serve as a stimulus package since local companies employ more Ugandans and invest their money in the economy compared to foreign ones which repatriate it," he said.

Security, transport


Veteran politician and security analyst Aggrey Awori said he expects the President to be brief since he has been regularly addressing the country. He said the President should talk more about internal security in the face of COVID-19.

"So far the President is doing well. He has silenced the Opposition, who are the main source of internal insecurity through provocation. Regional and international security is okay for now, since we are unlikely to have insecurity from external forces since every country is pre-occupied with fighting COVID-19," he observed.

Awori said he expects Museveni to elaborate on the strengthening of internal and external security to assure Ugandans of safety in the face of the pandemic.

On the 2021 elections, Awori said the President should say how prepared the country is, since security must be in place for a country to hold elections.

"But he said holding elections will be determined by the prevailing situation regarding COVID-19. So, whatever he might say will be speculative." Uganda Transport Development Agency chairperson Mustapha Mayambala said the biggest issue they would want the President to address relating to public transporters is fuel.

"Globally, fuel prices have been reducing, but the prices in Uganda have remained high.

"We expect the President to talk about how he can help to ensure that fuel prices go down to reflect world prices so that we operate without hiking fares.

"Remember the number of passengers for each taxi will reduce by half. So, if fuel prices remain high, we might be forced to hike the fares. Besides, the President can choose to suspend taxes on fuel for the time being," Mayambala said.

School owners

Robert Kamasaki, who owns a school, said they want the President to talk about waiving taxes on their businesses since they play a pivotal role in filling the gap left by government-aided schools in educating Ugandan children.

"COVID-19 has affected us like it has other businesses. We expect the Government to waive the taxes we are required to pay because we are taxed more than double. We pay income tax and Pay As You Earn, on top of paying taxes on scholastic materials," he argued.

Kamasaki said he expect Museveni to tell the country whether the Government intends to help schools by availing a nurse or regular medical visits, equipment and sanitisers when the schools re-open.

"This is because the Government stopped us from asking for extra money from parents."

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