42% of firms suffer higher costs in lockdown - UBOS report

BUSINESS   CORONAVIRUS

A new report released by the Uganda Bureau of Statistics (UBOS) shows that about 42.7% of Ugandan businesses saw big spikes in the cost of doing business in March and April.

This was after the government imposed a nationwide lockdown, followed by tough guidelines to companies and the population so as to stop the spread of coronavirus.

Part of the measures required companies such as factories to keep workers on site if they were to continue operating during the lockdown. 

"The findings indicate that 42.7% of the establishments reported that their costs of doing business were above the normal range during March and April 2020," UBOS said.

The report aimed at establishing the impact of COVID-19 on businesses in the economy.

UBOS executive director Chris Mukiza said the survey covered a sample of 2,377 private business establishments. However, only 1,182 businesses responded to UBOS, representing a 49.7% response rate.

The most hurt companies were those that operated during the lockdown given the essential nature of their services.

According to UBOS, 75% of the businesses surveyed in the financial and insurance sector reported a higher cost of doing business during the period.

These were followed by establishments in the information and communication sector (66.4%), transport, and storage (61.6%).

Companies were also required to transport workers from home to work, a measure that increased the cost of doing business. 

In April, Trade minister Amelia Kyambadde said that 4,200 industries had shut down as a result of the lockdown. 

She explained that the affected industries could not adhere to governments standard operating procedures that were issued by President Museveni.

Kyambadde said some companies simply had no facilities to shelter their staff on-site while others failed to cut essential staff to operate critical production.

In the last six months to June, MTN Uganda, for instance, reported a 6% jump in operational costs to sh456b.