Economic Policy Research Centre senior research fellow,Dr.Madina Guloba posits that the lock down occasioned by the COVID-19 leading to financial distress has revealed that Uganda needs to focus on industrialization. In an interview with the Daily Monitor, Dr.Guloba an economist argues that government needs to deepen agro-industrial linkages as a catalyst for the wider industrialization agenda.
“This is because investment in agriculture ensures that supply chains to the industry are sustained. This strategy will reduce dependency on imports and save on the much-needed foreign exchange,” she explains. As a result, Uganda will crawl out of the economic depression fast enough in recovery mode to catch up. But the recovery might not be up to the pre-crisis times.
“This is because jobs/employment will be granted progressively for those who have been laid off as business picks up,” Guloba adds.
Secondly, commodity prices will also remain high in the short term especially for the non-consumables (construction materials, electricity, and other amenities) as they try to cover-up the losses. Tax revenue collections will be at its lowest as both private and public ventures/ investments will be slow in take-off.
“Trade balance can be good if the government strategically places its self to undertake serious agro-industrialization in import replacement and increase export volumes of agricultural value-added products to Europe and regional markets that have been hard hit by Covid-19.”
She adds that, if the ‘Buy Uganda Build Uganda’ (BUBU) policy and the campaign is intensified with leading key priority commodities identified, then the possibility of crawling out of the looming depression is possible. Tax revenue collections will be at its lowest as both private and public ventures/ investments will be slow in take-off.
However, the public should be rallied to buy domestically and only import what can’t be produced locally. In addition, the government should be looking for markets for Ugandan products abroad
N.B:The original article from which this information was extracted, appeared in the Daily Monitor of …under the title “Economists advise on crawling out of crisis”