Impact of COVID-19 on the Stock Market
For Uganda to recover its economy, it needs to emphasize remedies both immediately and post the pandemic to boost the economy and be able to be competitive. Currently, people are systematically being checked in Uganda, lockdowns are happening, hands are being washed, quarantine is taking place, masks and gloves are worn. This increases the welfare of the Ugandan people and preserves the economy as the economy of Uganda highly depends on its people.
A need for the government to revise the budget to prioritize expenditure in the health care systems such as infrastructure, pharmaceutical, medical equipment. Budgeting can allow an opportunity for emergency funds to protect and shield its people due to the pandemic. Also funds can be set for medical research.
As tax collection reduces and expenditure increases, the nation may experience a fiscal deficit. For Uganda to balance the situation, borrowing from international markets can be considered to support expenditure as the commercial interest rate are presently low.
The country can target to process raw materials on-site and this will increase the nation’s food and resource supply in Uganda. This activity will add value to the economy by ensuring employment, earnings, and the flow of money. Uganda can elevate to compete regionally and look forward to supporting the domestic market and reduce dependency on external countries unless needed. Uganda can proceed to promote economic recovery by adapting to technology and digital solutions to encourage agricultural production and trade.
The banking system is significant for boosting the economy. Uganda can benefit from broadening digital financial services reinforcing the economy to adapt to the crisis now and develop advancement later. The Bank of Uganda can enact solutions by interceding in the foreign exchange market to smoothen out surplus volatility proceeding from the global financial markets.
Furthermore, banks can support potential businesses heading into insolvency because of the inadequate credit and give exceptional liquidity support. Also, banks can waive limitations on the restructuring of credit facilities at financial institutions that may be at risk of going distressed.
The Central bank as well can continue to lower interest rates to increase loans to businesses and provide commercial banks with more liquidity to support business activities and boosting the economy. At the beginning of April, Uganda had a high jump in lowering the Central Bank rates.
Post Pandemic Actions for revamping the economy are as well important for sustaining the economy after the pandemic. Uganda can be competitive post the pandemic by engaging in the continental free Trade Zone and financial institutions to obtain industrialization fast.
Effective industrialization in Uganda, will accelerate to the digital revolution and boosting the Ugandan economy to achieve agenda 2063 and address youth employment as enterprise are encouraged highly.
The initiation of fiscal stimulus packages to reduce the impact of the coronavirus pandemic on the economy is important. This includes the preparation of fiscal stimulus to Taxpayers impacted by Covid-19. Tax payments as well can be waived in critical sectors and local sourcing can support SMEs and businesses, ultimately upgrading the economy.