DENIS JJUUKO: Government should pay its debts to the private sector, have a roundtable with the banks

The politics and COVID-19 infections and deaths may be stealing the limelight at the moment but something else is happening in the country that is leading to heartaches. It is the economy. When you open the newspapers, you see businesses and individuals facing foreclosures. Roko, a famous construction brand comes to mind but there are many others.

Some of the deaths should be attributed to the economy as foreclosures and debts are said to be leading to heart attacks of businesspeople. It is that sad.

If you take a walk in the neighborhoods, you see properties inscribed on “Bank Sale” in the biggest and boldest fonts you can ever imagine. Although some of the lockdown measures as a result of the outbreak of the COVID-19 pandemic may have been lifted, the economy is reeling from these effects. Buildings are empty of businesses as many closed. Of course many other businesses such as entertainment are still facing an unprecedented crisis. Yet, given the current wave of the pandemic, more lockdowns might even be imposed.

A friend who owns a beautiful boutique hotel in one of the new cities told me that he the bank wants to sell his property unless he finds the money within six months. Conferences and travels aren’t happening at the scale he was a year ago and he has more empty rooms than he had ever imagined. He doesn’t think the business will pick up in the time frame given unless if he gets outside investment into his business. He is willing to sell shares in the hotel to avoid the bank sale but those investing are few to come across.

I have two other friends with businesses on Nasser Road. One small and the other fairly big. The small business owner told me he is planning to abandon the paper industry as his sales have plummeted by about 90% since the lockdown. He has to pay workers and rent. He is thinking of another business line as the current one is no longer tenable.

The fairly big business friend is worried of the industry as a whole. The government has issued a statement banning public sector players from buying diaries, calendars, and of course Christmas and end of year parties. He has been one of the biggest sellers of diaries and he sees a collapse of his business. The banks that he used to print for are even awarding their customers who transact digitally. Many have discarded payment and deposit slips. Can the Nasser Road industry survive COVID-19 and the new digital technologies? Perhaps not even though there will always be a need for printing.

I recently had a meeting with a government technocrat who told me that she doesn’t have much work to do at the moment. Apart from her salary, there is no money for fuel and such other things for her department to work. So she spends days in office whatsapping or reading reports and differing implementation to another time. She works in a critical ministry which deals with a key sector of Uganda’s economy.

Yet she says she is lucky her salary is paid. Nurses and other medical frontline workers were last week threatening to go on strike if their salaries aren’t paid. If workers get paid, the money boosts the economy. If they aren’t paid, the economy suffers. Imagine the impact salaries of teachers in private schools had on the economy.

But the government can play a role in keeping the economy afloat by paying their debts to the private sector. Suppliers to government ministries, departments and agencies should be prioritized so that they don’t see banks and other creditors foreclosing them. Since the lockdown, apart from seeing statements from public officials urging banks to be lenient, I never saw any news regarding meetings with banks to find ways to differ loans and keep the economy up and running. Where did all the borrowed money in the name of COVID-19 go?

COVID-19 was already bad for business and then we have elections that always over the last many years keep investors away. Many businesses don’t want to invest money when they aren’t sure of what will happen next. Ugandans may prefer to keep their money idle today than investing it pending the outcome of the elections.

The government needs to prioritize the economy as well by ensuring that everything is possible to pay their debts to the private sector, negotiating with banks to differ loans, and put in place incentives so businesses can keep running during this very difficult time.

The write is a communication and visibility consultant. djjuuko@gmail.com