William Kaggwa, the secretary-general of the Hardware traders’ association, said they were holding on orders and this has potentially had pressure on the fewer goods remaining in the shops around the city.
Traders who import most of their goods from China say they have
been unable to send money for goods or fly to China as most factories supplying
them are closed due to the outbreak of the coronavirus.
This will likely have an impact on the prices of most of the goods, including
building materials, clothes, iron sheets among others.
William Kaggwa, the secretary-general of the Hardware traders’
association, said they were holding on orders and this has potentially had
pressure on the fewer goods remaining in the shops around the city.
//Cue in: “Fe nga abasubuzi…
Cue out: …ku market.”//
At Kidde Enterprises in Kampala, one of the biggest importers of
construction materials, officials told us they were waiting up to the end of
March to see if the disease is controlled for them to place an order.
“The fear is that you may send money and you find the person is actually in the
area where it is quarantined,” one official said.
Kaggwa says the goods affected include soap dishes, transparent sheets.
//Cue in: “Okutankila ddala…
Cue out: …eziija China.”//
Some traders who received goods in December or early January are hoarding their
goods to push up artificial shortages so that they can sell at higher prices,
we have been told.
Chinese businesses in Kampala have already had a hit. For instance, some
Chinese hotels have told local staff that they will not be working as normal as
many of their customers – who are Chinese – have either been quarantined or are
stuck in China because they can’t fly back to Uganda.
The Bank of Uganda has said the situation is serious. Dr Adam Mugume, the
director of research at the central bank, said the impact was likely huge if
the disease is not controlled fast.
He revealed Uganda imports 25% of its goods from China and 70% of these are raw
materials used to make other things in Uganda. This will see not just an
increase in the prices of imported goods but also push up prices of locally
made goods whose raw materials are sourced from China.
Richard Walker, the World Bank Uganda economist, said it was still
uncertain to see how the desert locusts in north-eastern Uganda and coronavirus
in China will affect the economy this year. He said they expected Uganda not to
grow below 6% even with these happenings. He agreed the locusts will have an
impact on agriculture.
//Cue in: "The assumptions …
Cue out: …tough to say.”//.
This thought is in line with other economists. Dr Enock Nyorekwa, an
infrastructure economist, said the impact will largely depend upon quarantine measures
and sentiment, and whether there is more clarity around these.
For Uganda, fewer imports mean less government tax revenues at the time when
the Uganda Revenue Authority is failing to reach its targets. Doris
Akol, the URA commissioner general, told reporters at the start of this month
that in the six months to December 2019, traders imported fewer products
cutting government expected revenues. Coronavirus in China will likely extend
Yet the government needs more money to divert from core activities to
cater to Ugandans stuck in China and fight the desert locusts.
Meanwhile, Kaggwa advises all the traders to suspend their plans for
imports and not send their money until they are sure the factory or the person
they are sending money to are working.