For many businesses, the pain and anguish from the spike in coronavirus-related deaths and the subsequent lockdown measures to control the spread of the pandemic, were quite visible in their financial books.
Many banks recorded drops in profit; sales in downtown Kampala – the pulse of retail trade – dipped; while companies slashed jobs just to remain afloat.
With the year 2022 underway, SAMUEL MUHINDO talked to experts to see whether the gloom of last year will be replaced with a business boom this year.
DANIEL BIRUNGI, the executive director, Uganda Manufacturers Association
The major positives were on lifting of inter-district travel, and the extension of curfew hours to 9 pm, although it came back to 7pm. Our products are still unable to access the regional markets of Rwanda, Kenya and Tanzania.
The closure of schools has hurt most of our members dealing in plastics and stationery. Stationery manufacturers had invested over $300 million [in the last couple of years]. These investments are now lying idle.
Continued lockdown of the night economy has greatly affected the tourism and the beverages sectors.
The introduction of excise duty on plastic granules and the new tax measures that were not planned for have distorted all our plans.
For 2022, we expect schools and the lockdown on the night economy to be lifted so that we make more money.
We need a candid discussion on regional markets. We need a more sustainable approach like the European Union does where penalties are hefty for partners that go against the community trade principles. The EAC must have powers to rein in on errant members. Before unrealistic tax measures are rolled out, they should be studied, understood and stakeholders engaged through the entire process.
Jean Byamugisha, CEO, Uganda Hotel Owners Association
The anticipated recovery of the tourism sector in 2021 was anchored on the reopening of most countries, which could influence travels.
We had vaccinated all our staff and were ready to host visitors before the mid-year lockdown, and the twin bomb attacks on Kampala, which forced countries from our source markets into releasing travel advisories to Uganda.
The outbreak of the Omicron variant during December has forced people from our source markets to cancel travels. We had anticipated more bookings because tourists would be escaping the winter for our warm weather here for their Christmas holidays.
Some source markets introduced the PCR tests and strict quarantine policies on one’s bill upon return to their countries, which became expensive on travelers.
We still have the 7pm curfew yet the tourism industry makes money from the night economy. Economic recovery has been low and we are not sure whether 2022 shall be any better with the mutations of Covid-19, which make it difficult for us to be confident.
For 2022, we shall be very cautious, embrace vaccination and booster shots.
Daniel Bwambale, Uganda Legal Information Institute
The year 2021 has been a bad one for most businesses in Uganda. Coupled with reduced purchasing power and an unrelenting taxman in URA, plus the heavy burden of poorly thought-out and even more bizarrely implemented lockdowns.
For the first time in decades, Ugandans experienced massive [destruction of] livelihoods, altering contractions in business income.
The emergence of such fields as the pathogenic economy means that businesses must repurpose for the future. I don’t see a better 2022 than 2021.
I anticipate a minimum recovery of the economy since our government has proven to be weak in terms of project implementation, which has tied down massive resources that could have spurred a speedier growth and recovery.
Robert Mutebi, Secretary, Uganda Bus Owners Association
The year 2021 has been the most challenging, exacerbated by Covid-19. While observing SOPs, our buses were operating at half capacity.
To keep afloat, transport fares were increased but the profits were small. Prior to Covid-19, most buses were operating at 70 per cent. When the pandemic hit, the number dropped to 50 per cent and some companies cut down on their fleet because people were not travelling.
During the first and second lockdowns, we pleaded with banks to allow us to pay the principal on the loans and delay the interest but they declined the request. We tried pleading with the ministry of Finance for stimulus but they thought we had money and we were never listened to.
Several bus owners have had their property taken by banks. Increases in taxes, fuel and tyre prices, and bus fares have made it the worst year for business.
For 2022, Omicron has set in and we can only speculate at how the next year shall look like. Government had promised to allow buses operate at 70 per cent capacity but we are now uncertain with the increasing Omicron cases.
Keith Kalyegira, CEO, Capital Markets Authority- extract from the CMA 2020/21 report
Looking ahead, over the twelve-month period from 1st July 2021 to 30th June 2022, the Capital Markets Authority will focus on the following key initiatives: increasing liquidity in the debt capital markets; reviewing the CIS framework to ease market access by intermediaries and strengthen controls; operationalisation of the Deal Flow Facility in conjunction with FSD Uganda and the European Union; advancing policies to strengthen domestic institutional investor participation in the capital markets; and reviewing the rules governing the commodity exchange subsector to facilitate the approval process for commodity exchanges.
Judy Kyanda Rugasira, MD, Knight Frank: Extract from H1 2021 Report by Knight Frank
The first quarter of 2021 of the office market started at a slow pace compared to the same period in 2020. It began picking up in March 2021 until the 40-day national lockdown brought the country to a halt.
Here, organizations were still re-configuring their workplace layout and strategies to incorporate the Standard Operating Procedures and social distancing requirements.
Knight Frank registered a 3 per cent drop in occupancy of Grade A/AB office to 81 per cent in the first half of 2021. The decline was attributed to downsizing of space requirements, relocation, increased supply of prime office space and working from home.
Following the signing of the tripartite East African Crude Oil Pipeline agreements in April 2021, opportunities for revitalization in office activity are envisaged, which should stimulate demand for office space and boost confidence in the future of the office market performance.
For 2022, we project an overall improvement in several property market segments at varying rates although the uncertainty surrounding Covid-19 remains the great threat to the improvement.