Over sh1.49 trillion needed to mitigate coronavirus economic effects — report 

By Michael Kanaabi

Seven million Ugandans need direct help from the Government to go through this uncertain period as most economic activities are halted to prevent further spread of COVID-19

Coronavirus attire 350x210


KAMPALA - The Centre for Budget and Tax Policy has called for an injection of over sh1.49 trillion into the economy in order to mitigate the possible disastrous effects of the coronavirus disease (COVID-19) in the country.

In a report released by the think-tank's executive director, Patrick Katabazi, it is noted that about seven million Ugandans need direct help from the Government to go through this uncertain period as most economic activities are halted to prevent further spread of COVID-19.

"Low paid civil servants, including the men and women of the armed forces, nurses and teachers earning below sh500,000 a month need at least sh100,000 top-up for three months. These workers are about 150,000 and the total cost of this intervention will be sh45b."

Another group of wage and salary earners that needs to be looked into are those employed in the private sector who may lose jobs as companies scale down or close due to the redundancy resulting from the COVID-19 pandemic.

There are about 800,000 people who fall in this category, according to the statement and these will require an extra sh240b to be helped.

"The reason this category deserves all the help they can get is they contribute a big part to Uganda Revenue Authority's (URA) Pay as You Earn (PAYE) collections, which topped sh2.8 trillion last year," the report says.

A recommendation to revise PAYE downwards by at least 10% is also included to help reduce the burden on this group at this critical time.

According to a 2019 report from the World Bank, salary and wage earners make up 21.9% of the local workforce, and these require government intervention to keep things in balance. 

Over 200,000 elderly persons are already being supported by the Government with a monthly grant of sh25,000, something the Centre for Budget and Tax Policy recommends should be revised upwards during this time.

Resulting from the increased pressure on the funds disbursed through these grants because of people returning to villages, the amount should also be doubled to sh50,000, the report suggests.

Already, sh142.4b is being spent on the elderly grants, but another sh257.5b is required for the recommended additional support over the next three months.

And to motivate frontline workers who are already under immense pressure in the fight against COVID-19, the experts recommend extra working allowances and insurance for especially the medical workers, security personnel and the journalists.

The informal sector, which is a key sector of our economy and employs a critical mass of four million people, according to the report, requires the largest intervention totalling up to sh800b. This is because a lot of their work has been brought to a halt by the social distancing intervention.

Mainly made up of bodaboda riders, taxi drivers, market vendors and petty traders, these can be verified through their various associations so that the right people get the assistance, the report suggests.

Sh50,000 per month for a period of four months is recommended for this group.