Government to spend extra Shs304.4bn to counter coronavirus

The ministry of health reported three new confirmed cases of coronavirus on Friday evening, bringing the total number of confirmed cases to 48

Uganda will spend Shs304.4bn ($80.6m) over the next three months on its coronavirus pandemic response, according to a supplementary budget request presented to parliament this week.

Matia Kasaija, the finance minister, also told parliament on Wednesday that the government has applied for $200 million in emergency funding from International Monetary Fund and the World Bank to deal with a funding gap in this fiscal year and the next.

The supplementary budget request includes Shs82.5bn for the ministry of health, Shs81.4bn to the security sector, Shs36.1bn to local governments,  and Shs30.1bn to the Kampala Capital City Authority.

In addition, support for vulnerable households in the Kampala and Wakiso districts was allocated Shs59.4bn, while funding for the ICT ministry will amount to Shs14.7bn. If approved, the money will be drawn from the contingency fund.

The ministry of health reported three new confirmed cases of the Covid-19 coronavirus on Friday evening, bringing the total number of confirmed cases to 48 and no deaths. It said all the 45 cases confirmed before Friday “are in stable condition” in four government hospitals around the country.

In a statement to parliament last month on the economic impact of the coronavirus, Mr Kasaija said it would “impose a significant strain on the health sector which will necessitate additional resources to deal with the pandemic.”

He added that the government might need more funding to keep up the fight against locust swarms that invaded the country in February and to support the people whose livelihoods will be affected by the coronavirus.

“In total, the government of Uganda is faced with a preliminary additional financing gap of approximately Shs370bn (equivalent to approximately $100m in FY 2019/20) and Shs350bn (approximately $90m in FY 2020/21) due to revenue shortfalls and additional expenditure needs to deal with the challenges,” said Mr Kasaija last month.

Among the interventions to be funded by the supplementary budget are the recruitment of 250 additional health workers, accommodation and welfare for quarantined patients, the purchase of test kits and protective gear for health workers, “intensive care beds”, and the “restoration of functionality of oxygen facilities at Mulago [National Referral Hospital].”

The ICT ministry is expected to scale up a national awareness campaign to combat the virus, while select local government officials will comprise ‘district task forces’ charged with “case management, surveillance, health promotion, and resource mobilisation.”

The government will provide emergency food support to the “vulnerable urban poor” in Kampala and Wakiso districts for 30 days, according to the supplementary request. Ruhakana Rugunda, the prime minister and leader of government business in parliament, said the distribution of food in the two districts will start on Saturday and will be done at the LC1 village level.

Financing gap

The finance minister told parliament that the economy is “strained” because of the effects of the coronavirus and that government is “not getting the taxes we expected.” To keep the government afloat, Uganda will turn to emergency financing facilities set aside for low-income countries by the World Bank and the IMF.

“To deal with the financing gap in the government budgets for FY 2019/20 and FY 2020/21, my ministry will seek for a budget support loan on concessional terms worth $100m for 2019/20 and $90 million for 2020/21 from the World Bank,” Mr Kasaija said last month.

On Thursday, the World Bank said it had approved $1.9bn in emergency grants and loans for 25 developing countries around the world under its fast-track coronavirus facility. The projects are the first under the facility, but the bank added that other similar operations are being planned in over 40 countries.

In total, the Washington-based multilateral lender has set aside $160bn to be deployed over the next 15 months to support health responses and prop up economic recovery.

Among the initial set of Covid-19 response projects include $50m  in funding to Kenya, $47.2m to the Democratic Republic of Congo, and $82.6m to Ethiopia.

“$82 million will help Ethiopia address critical needs for Covid-19 preparedness and response, including the provision of vital medical equipment, health system capacity-building, and support to establish treatment centres,” said the World Bank.

“In the Democratic Republic of Congo, $47 million will provide immediate support to put in place containment strategies, train medical staff and provide equipment to ensure rapid case detection and contact tracing.”

Rwanda, with 89 confirmed cases, has also borrowed $109.4m from the IMF’s rapid credit facility to meet its “urgent balance of payments needs” arising from the coronavirus pandemic. The loan was approved on Thursday.

“The Covid-19 pandemic has ground Rwanda’s economy to a halt, creating an urgent balance of payments need,” a statement by Tao Zhang, the deputy managing director and acting board chair at the IMF said.

“The IMF emergency support under the rapid credit facility will help with Covid-19-related pressures on trade, tourism and foreign exchange reserves, and will provide much-needed resources for health expenditure and for households and firms affected by the crisis. It should also help to catalyse donor support.”