The Purchase Managers Index (PMI) for March 2020, a survey published by Stanbic bank and mainly talks to owners of businesses show that confidence fell to 43 points, regarded as poor.
Empty streets and shut businesses as government scrumbles to stop covid-19 spread
in the country has fallen sharply for the first time since January 2017 as
companies come to terms with Coronavirus (COVID -19) wave, a survey has shown.
Managers Index (PMI) for March 2020, a survey published by Stanbic bank and mainly
talks to owners of businesses show that confidence fell to 43 points, regarded
Above 50 points is
regarded as high confidence that things are better.
The survey says “fall in new business, company
shutdowns and issues with the supply of raw materials have pushed the Ugandan
private sector into contraction.”
the Stanbic head of global markets said in a statement that “COVID-19 caused
issues in supply chains, with difficulties securing raw materials, particularly
He added that “lower the activity also contributed to declines in both purchasing and inventories, while
suppliers' delivery times lengthened in part due to border closures.”
According to the survey, central to the decline in business conditions were reductions in both output and new orders as
people were told to stay home and businesses shut.
The fall in the business will have an impact on growth as well as poverty. Economist Dr. Fred
Muhumuza has predicted that as many as 17 million Ugandans could fall below the
Bank of Uganda’s
executive director for Research Dr. Adam Mugume has said the economy will grow at
less than 5%, a drop from the earlier projected 6%.
On Monday, Bank
of Uganda is expected to announce a cut in the Central Bank Rate (CBR), a key
rate that will make banks to cut interest rates to support businesses to borrow.
But the lockdown
of the economy to stop the spread of covid-19 means businesses will hardly
operate – this means more job losses, closure of businesses and despair.