The dire straits in which the world finds itself is unprecedented in modern times. Our technological advances which have shrunk the world turning it into a global village, the great strides in the medical sciences and the new frontiers of artificial intelligence have so far stood helpless against the Coronavirus pandemic
First reported in faraway China, the scourge of Coronavirus has become a threat to human life everywhere. The plague of corona virus has spared no one. Princes and paupers alike are threatened and afflicted. Coronavirus, like death has become the great equalizer.
The virus has proved not only a challenge to the survival of human life but has also changed the way we live. As social beings, we now find ourselves keeping our distance from our kith and kin. We have to travel but we are now confined in our homes. Economic activity is slowly grinding to a halt as demand for goods and services decline rapidly. The ability of people to work and earn has been severely restricted. With the decline in purchasing power, the cash flow of business is in jeopardy.
We salute the people who are fighting in the frontline against this scourge. From the Head of State to the line ministers, from the doctors and the village health teams and volunteers. From the ambulance drivers to the security personnel ensuring law and order. We owe you a debt of gratitude. Thank you!
This is a trying time. We are at war. A war against an invisible enemy. An enemy who strikes without warning. The question is now whether we shall raise the flag of surrender to this new scourge or stand our ground and fight. As humans we were granted dominion over all the other creatures by the Almighty Himself. Our destiny is to be masters of the universe subject to none but the Divine Will.
We have survived the scourge of deadly wars and other afflictions. So as we face this new enemy lets recall our past struggles to resist all forms of threats to our way of life. We as the human collective have brought the edifices erected by tyrants tumbling down. We have confronted hunger. We have confronted diseases ranging from the common cold to HIV/AIDS and Ebola. Even the new scourge of coronavirus shall crumble before our collective assault
We are threatened but we are not helpless. We may be isolated but we are not alone. We are together in this. United by a common cause, we cannot fail. Hereby the coronavirus is being beaten back through certain measures.
Let’s comply with the medical advice that requires us to adopt the habits that will prevent the spread of this deadly scourge. This requires discipline and each of us has a choice to make. Given that it is a matter of life and death; this is not a difficult choice to make.
My friend Joel Aita, a man with a great mind has developed a mathematical model that shall put sense into even the most-stubborn and undisciplined among us. He says if we simply carry on with business as usual, we can easily have 9.3 million infections in the next 50 days. If we adhere to a social distance of 4 meters, always wash our hands and not touch our faces, we will likely end up with 1,281 infections in the next 50 days.
On the other hand, a total lock down can reduce the infection to 328 in the next 50 days. It therefore goes without saying that the coronavirus has to be taken very seriously. As a historical note, let’s remember that in 1919 the Spanish flue affected over 500 million people and left 50 million people dead worldwide. Therefore, the inconvenience, hardship and suffering imposed on us by the need for Uganda to stay ahead of coronavirus, has to be understood in the context of the danger we face from a laissez affaire attitude:
A lot has been said about the ethics required by those enforcing the lockdown. The point to note is that our constitution remains in force. Human rights have to be respected. High handedness and violence cannot be accepted.
Finally, there are certain things that can be done to cushion the society and provide a social safety net for the most vulnerable of the vulnerable. These measures are of an economic nature. I call them coronavirus because they stem from the economic impact of the coronavirus.
I am already assuming that we are at war and there is an undeclared state of emergency. If infections rise this will become formal. A state of emergency will give the President powers to set the economy on a war footing to commandeer industries and assets for the common cause of defeating coronavirus. Most industries will be focused on production of safety wear – overalls, gum boots, masks, gloves. Others will produce medical supplies. Distilleries will produce enough sanitizers to saturate the entire society
As we adapt to the mind-set of a society at war, there is need for citizens not to be lose confidence in the government. We note that the sudden closure of schools caused a panic and hiked the costs of transport. All the uncertainty caused by information gaps leads to rise in prices of essential commodities and triggers panic buying. Panic buying leads to hoarding and artificial scarcity. Artificial scarcity can lead to theft, robbery and lawlessness. Widespread lawlessness can lead to break down in law and order and eventually anarchy.
As a response, we need to create a distribution chain of supply for sanitizers at a low price of 500/= each. The means for a total lockdown should be communicated.
Other steps to a total lockdown are:
- Take control of transport infrastructure
– Create reserve fuel supply to all fueling stations
– Register and equip truck drivers and turn-men with safety wear and allocate routes for delivery
– Register and equip pickup drivers with safety wear and allocate routes to deliver supplies to towns, trading centres, sub counties and trading centres
– Remove back seats of vans to transform them into cans. Register as equip them as for lorries and pick ups
– Register and allocate 1 boda boda for every 10 households (as in the mulango kumi model)
- Take control of communication infrastructure
– Telecom companies to allow and create equal call rates and waive mobile money transaction rates to enable vendors link to customers (E-commerce)
– All TV and radio stations should coordinate messaging countrywide
– Media centre to coordinate official information across all platforms
- Coordination and control
– District CORD-19 task forces to take the lead with support from the army, police and LDUs
- Ethics and Enforcement
– Proven cases of corruption, robbery and theft to be dealt with swiftly and severely
– Security officers who enforce the breakdown with unwarranted and excessive brutality will also face swift and severe punishment
- TOTAL LOCKDOWN
Declare a total lockdown with only security personnel and transporters allowed to move
Economic Impact of Coronavirus
I have been talking to various economists and analysts on the coronavirus. For instance, among others, I spoke to my friend Conrad Nkutu. These are the likely economic impact of the coronavirus we should brace for:
– GDP growth will slow from 6% to 2%
– The economy will contract due to high population growth rate of 3%. With a GDP growth rate of 2% it means actual growth will be -1%
– Banks and SACCOS should brace for mass borrower default. Credit growth will fall from 12% p.a. to 0-4% this year.
– BOU has suspended commercial banks shareholder dividends. Small banks may collapse
– The Uganda shilling will fall to 4100 against the dollar. This will be a blow to shillings’ savers, earners lenders and asset holders
– A litre of petrol may climb to between 4000 – 5000 shillings
– Inflation will match the depreciation in the shillings and may reach 8-10%
– With border closures GDP will fall from 3.2% to 2-2.4%. Supply chains have been disrupted. Coronavirus is also a rude awakening and challenge to the NRM policy of leaving our economy wide open to foreign invasion. We hope the talk of import substitution is not mere hot air. We should pick up the lessons from how vulnerable our economy has become due to the coronavirus and protect local industry.
– Airline and hotel sector experiencing short term collapse. Uganda Hotel Owners Association (UHOA) has reported closure of 80% of all their member hotels. Among these are Speke Resort and Munyonyo Commonwealth Resort. Yet tourism has been the top forex earner for Uganda.
– Schools and churches are closed
– Government has failed to put forward any plausible social assistance grant for vulnerable daily wage earners. It has also not offered any safety net to businesses
– Bank deposits will drop
– Non-Performing Assets will grow from 3-4%-7-9%. Bank will need recapitalization
– National forex reserve has fallen from 6 months to 4.5 months
– Government revenue is at great risk as the tax base shrinks. It would be immoral to tax businesses that are drowning and need a lifeline
– Coronavirus impact will likely last a minimum of 1 year
HERE IS A PLAUSIBLE SOCIAL ASSISTANCE OPTION FOR THE URBAN POOR – A SOCIAL ASSISTANCE PACKAGE
– Assume a 40 million population
– 75% of rural population self-sufficient in food
– 10 million urban dwellers (25%) needy
– Assume 4 per household (average)
– That makes 2.5 million households as the most-needy. If not assisted these will ferment street protests, violence and a crime wave. Assume that 2 million households are in need of emergency assistance
– Assume a minimum requirement of 10,000 shillings per day for 30 days per household. This makes 300,000/=
– Budget requirement would be 300,000x2m households = 600billion shillings or $150m-
FINANCING THE SOCIAL ASSISTANCE PACKAGE
– Borrow from commercial banks
– Treasury Bills (raise Treasury Bills rates temporarily to 15% from 9% to incentivize the commercial banks
– Commercial banks usually lend 2 Trillion shillings a month. So banks have an incentive to give government money via Treasury Bills given the severely reduced borrowing
Note that the Top 15 commercial banks can cope with the liquidity strain that the purchase of Treasury Bills will impose. If, however each of the 24 commercial banks buys Shillings 25 billion worth of Treasury Bills the 600 billion shillings’ target will be realized.
We lack street addresses and universal taxpayer accounts. So we have to resort to rudimentary models i.e.
– Use the Mulango Kumi model
NB: Given the levels of corruption in Uganda we have to assume that there will be a loss of between 15 – 20% due to fraud!
Note that this statement was issued BEFORE the lockdown
Mao- has been president of the Democratic Party since 2010