Approximately 1.9 million people are likely to fall into poverty as a result of the first eight weeks of lockdown alone, according to a report that, among others, analyzed the socioeconomic impact of the lockdown measures imposed to control transmission of the novel coronavirus disease (COVID-19) in Uganda.
The report by the United Nations in Uganda says the increase in poverty among wage earners will be felt most in the Eastern and Northern regions of Uganda where many households are already highly vulnerable. The report warns that COVID-19 will have far-reaching impacts on the entire economy and society, although some areas such as tourism and manufacturing will be hit disproportionately harder.
“The widespread impact of COVID-19 across key economic sectors will most likely slow down the speed of economic transformation, expansion of the industrial base, job growth and delivery of essential social services, envisaged under the third National Development Plan (NDPIII), which came into effect on July 1, 2020,” reads the report. It adds, “Although the economy is projected to gradually recover starting from the second half of FY2020/21, the emerging output gap is projected to persist until 2022.”
Titled “Leaving No One Behind: From the COVID-19 Response to Recovery and Resilience-Building,” the report is a joint initiative of the UN Country Team in Uganda. The UN Secretary-General designated the United Nations Development Programme (UNDP) as the technical leader on socioeconomic assessment of COVID-19. This is the first COVID-19 UN inter-agency effort led by UNDP under the overall leadership of the UN Resident Coordinator, to generate understanding of the pandemic at the country level and potential entry points for recovery.
Guided by the 2030 Agenda for Sustainable Development and its central objective to ‘Leave No One Behind’, the report quantifies losses for Uganda’s economy and vulnerable groups as a result of COVID-19, identifies who might be the hardest-hit, or left behind in the response, presents the most effective interventions to address impacts, and assesses implications for the achievement of the Sustainable Development Goals (SDGs). Building on existing assessments of the socioeconomic impacts of the pandemic and government recovery proposals, this report is pertinent to shaping the recovery plan and development planning in Uganda.
Effect on women, older persons, refugees and the tourism sector
The report estimates that national poverty rates could rise by between two and eight percent, disproportionately impacting women, older persons, those with refugee or migrant status and marginalized groups. Informal micro small enterprises (MSEs) have also been affected with 46 percent of workers employed in informal businesses in the manufacturing sector pushed below the poverty line. There has also been a similar impact in the hospitality industry (43 percent) and trading and services (41 percent), with women disproportionally impacted.
The report predicts a loss of USD $5 billion in the tourism sector by 2025, decline in revenue collection, and deterioration of foreign direct investment arising from the likely global recession. The agricultural sector is also not immune to the pandemic, and is likely to be heavily affected, with disruptions in food supply chains threatening food and nutritional security. The sector is likely to experience increased labor shortages, disruption in the supply of farm inputs for both crops and animals, and an increase in post-harvest losses. While subsistence farmers’ food production has not been severely impacted and many are likely to maintain minimal food requirements, non-farm incomes have taken a critical hit.
However, the report also finds that expanding social protection measures could play an important role in cushioning the impact of the pandemic and a containment response for poverty and vulnerability. This could include expanding emergency one-off cash transfers, for example targeted to informal workers, or scaling up existing social protection programmes.
The report utilizes a mixture of qualitative and quantitative approaches. These include modelling the implications of the pandemic for the macro economy, collection and analysis of survey data to capture business behaviors across sectors, use of national household surveys to assess poverty and vulnerability dynamics, and use of the integrated Sustainable Development Goals (iSDG) model to assess the potential impact of Government response on achievement of the SDGs.
The full report and policy brief are available for download here.