CAPE TOWN - Uganda has lost 130 billion Ugandan shillings (R597m) in two months due to the coronavirus pandemic. Local newspaper Daily Monitor said between February and March offshore investors have halted their investments.
The newspaper said officials from the Bank of Uganda (BoU) have seen investors exit Uganda’s economy, causing an investment decline. Another contributor to the loss is the closure of factories.
Daily Monitor reported that the country's local manufacturers and traders struggled with operations as some of them imported supplies from high-risk countries such as China and Europe.
Due to the country’s strict travel restrictions, the tourism sector - which is a major boost for Uganda’s economy - was also on a decline.
“For instance, between February 21 and March 13, the offshore holding of government securities declined by Shs130 billion (R597m). This, plus negative sentiments, resulted in the shilling depreciating against the US dollar from Shs 3,676.9 in February to Shs3,820 as of March 20, a depreciation rate of 3.9 percent,” the newspaper quoted director for research at BoU, Adam Mugume as saying.
Mugume told the publication that the current economic state would result in the Ugandan currency value declining against the dollar.
On March 20, the BoU set out measures to mitigate the economic impact of Covid-19.
The measures included intervention in the foreign exchange market to smoothen excess volatility arising from global financial markets, providing liquidity assistance for one year to financial institutions supervised by the BoU, and waiving limitations on the restructuring of credit facilities.