{UAH} How is coronavirus hurting business in Uganda?

Trucks being unloaded in Kikuubo, Kampala's leading trade hub. File photo.

Uganda is surrounded by countries that have confirmed cases of coronavirus, apart from her northern neighbour, South Sudan.

Countries that Uganda trades with have been significantly hammered by the pandemic, which has claimed over 7900 lives across the world and more than 199000 people are stilling battling with it.

According to the Ministry of Finance, Asia, the East African Community (EAC) and the Middle East are the largest sources of Uganda's imports.

For context, in November of last year, Asia contributed 38 percent of goods imported into the country, EAC (17.3%) and Middle East (17.1).

For that period, India, China and Japan supplied 80.7 percent of the imports to Uganda.

95.1 percent of the imports were sourced from Kenya and Tanzania, according to the Finance Ministry.

Current statistics indicate that China has registered over 80,000 cases of coronavirus and 3237 deaths.

In India, 152 cases have been confirmed and three people have died.

In Japan, 882 cases have been recorded and twenty-nine people passed.

To contain the spread of the virus, most of these countries have instituted quarantines, which led to closure of most factories, airlines suspended flights and traders are worried about moving to these countries.

"… Even if you give me money I can't go to China right now," Eddy Mugisha, a prominent importer of jewellery and photo albums & frames told me in a phone conversation.

"However, there are some who are not worried and have found ways of travelling to China…"

Here in East Africa, Kenya announced four cases while Tanzania announced three. No deaths have been registered.

Remember EAC is Uganda's top destination for merchandise exports, absorbing close to 30 percent of the total exports.

The Middle East, which is the second main destination — has also not been spared by the virus.

Saudi Arabia, the second consumer of Ugandan goods after UAE, has suspended flights. The UAE has also suspended flights to some locations.

Looking at coronavirus counts, 113 cases have been confirmed in UAE and 171 have been registered in Saudi Arabia.

No deaths have been filed.

The United Arab Emirates has prohibited non-resident foreigners from entering the country.

According to a 2019 Bank of Uganda report tracking seven months of exports ending in July, about Shs9.1 trillion was recorded in export earnings, with around Shs2.8 trn coming from the Middle East.

UAE contributed almost total the amount at $758.95m, Saudi Arabia ($2.78m).

The rest, $10.15m, was to Israel, according to the report.

According to the ministry of trade, industry and cooperatives, Uganda mainly sells gold, fruits and vegetables to its biggest buyer.

Talking to traders, authorities

The first item that has shown how the future will be in the event that coronavirus persits is sanitizers.

Their prices are already escalating as families and organisations buy in bulk to ready themselves.

Some traders have decided to hoard them as they anticipate a shortage in supply which will prompt an uptick in prices.

I moved around the Kampala suburbs of Ntinda area and Kiwatule, visiting top supermarkets and pharmacies and most of them had run out of sanitizer stock.

Those that had them were already raising prices. Some were planning to.

When it comes to other goods, some traders are yet to feel the shock since they had stocked a lot before the coronavirus pandemic hit countries they source goods from.

Others had already ordered for goods so they were already on the way.

But those that hadn't are depleting stock and they know the future will be tough.

"Prices are going to increase because we can't travel," Mugisha said. "So, becuase we can't travel, we are going to run out of stock. When the supply reduces, that means prices will spike."

In an interview with a communication executive from the Ministry of Trade, she said that they are planning to release a detailed statement about the impact of coronavirus.

"We had a meeting with other people and we are supposed to write a report and share with the public," the executive told me.

"I can only do that maybe Thursday or tomorrow," she said when I asked for stastical feedback. "We can't give you figures right now… it just happened… we don't have statistics yet…"

She said at the moment the economic shock can't be felt since some traders had stockpiled goods or have some in transit but in a few months the impact will be felt.

"Obviously, there is effect, there is an impact, everyone can see that. At the end of the day even if you have not seen the impact right now it's going to affect us in two, three months, you know… things are going to be really bad for traders, to be more specific, I think they are the ones that are going to be most affected."

There are people who source their goods from local manufacturers. But these manufacturers import some raw materials.

Dr Adam Mugume, the director of research at Bank of Uganda, recently said that Uganda imports 25 percent of its goods from China and 70 percent of these are raw materials used by local manufacturers.

With fewer imports, it also means fewer tax revenues at the time when the Uganda Revenue Authority (URA) is failing to meet its targets.

Meanwhile, as the coronavirus ramifications beckon, Uganda is still grappling with trade wars with its neighbours like Kenya, which is rejecting milk products, Tanzania had, until recently, banned our sugar, and Rwanda has closed its border.

For instance, reports show that these trade wars and border blockades cost Uganda about Shs1.6 trillion worth of export revenue for the year ended December 2019.

Also, Uganda has seen a fall in imports from China in January by Shs6 billion.

Officials did not factor in the coronavirus impact, predicting tougher times.

Uganda's imports from China stood at $108.14m in January from $109.82m in December of last year, according to the central bank.

Europe, which has also been heavily hit by coronavirus, registered a drop in its imports to Uganda.

Uganda's import bill from Europe stood at $41.7m (Shs154b) in January down from $44.8m (Shs165b) in December.

It's only imports from the Middle East and Comesa (Common Market for Eastern and Southern Africa) that grew.

According to the Bank of Uganda report, in January Uganda imports from the Middle East stood at $107m (Shs395b) up from $89m (Shs329b) in December while imports from Comesa stood at $98m (Shs362b) from $84m (Shs310b) in the period under review.

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"When a man is stung by a bee, he doesn't set off to destroy all beehives"

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