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UNICEF UPDATE ON
THE SOCIOECONOMIC IMPACT
OF COVID-19 ON CHILDREN
CHILD
WELL-BEING
© UNICEF/UNI340379/Desjardins
UNDER THREAT
INTRODUCTION
This bulletin is one in a series that discusses tionally, it focuses on the impact of COVID-19
the impact of the coronavirus disease (COVID- on the macro-economy through a child rights
19) on children in Uganda. The main objective lens. In this regard, it examines how underper-
of the bulletins is to highlight key concerns formance of the macroeconomy, as a result
around the impact of the pandemic on chil- of the lockdown, is having a knock-on effect
dren, and the resultant bearing on the attain- on household incomes, debt situation, public
ment of the third National Development Plan, finance investment in social sectors, and ulti-
Vision 2040, and Sustainable Development mately on child well-being. By taking a deep
Goals (SDGs). While the discussion in this dive into child-specific issues, this bulletin aims
bulletin includes the impact of the pandemic to complement joint and aggregate analysis by
since its onset, the main emphasis is on the the Government of Uganda and other agencies
42-day lockdown in June and July 2021. Addi- including the United Nations in Uganda.
KEY MESSAGES
• The recent lockdown has worsened
pre-existing challenges with regard
to childcare and learning, as nearly
15 million learners are locked out
of school. It has also elevated
child protection concerns, and
compounded risks of malnutrition
and poor child health.
© UNICEF/UNI211839/Schermbrucker
DEPRESSED ECONOMIC ACTIVITY
During the recent 42-day lockdown, national People who survive on informal, micro, and small-
economic output was probably at its lowest in scale enterprises probably suffered the most during
2021. With productivity and consumption at the barest the lockdown. An estimated 83.5 per cent of young
minimum, prospects of an economic rebound this year working people between 15-29 years are in informal
have been dampened. Through the budget statement employment.2 According to UNICEF estimates, during
by the Minister of Finance, the government projected the 42 days of lockdown, young people between the
a positive GDP growth of 4.3 per cent in fiscal year ages of 20 and 30 may have lost up to one trillion
2021/22.1 However, considering the reduction in produc- Uganda Shillings (UGX) (approx. US$282 million) in
tivity during the lockdown and the negative impact of potential revenue. This is deduced from the monthly
ongoing restrictions on productive activities it is likely median income per person before the pandemic.
that the national GDP growth rate will be much lower Furthermore, UNICEF estimates that UGX144 billion
than originally projected. This is contrary to the high (approx. US$40 million) per month in potential export
expectations at the beginning of the year when monthly revenue could also have been lost by informal traders
economic output in market prices had almost reached during the period of the lockdown.
the pre-pandemic levels.
The pandemic has forced several small-scale
The lockdown weakened the performance of several enterprises to fold, and many big businesses are
sectors, dragging down national economic output. distressed. According to the latest figures from the
Among others, transport, accommodation, and food 2019/2020 Uganda National Household Survey (UNHS),
[hotels and restaurants], creative arts [entertainment], the share of households in Uganda with at least one
sports, and informal sectors seem to have been hit member operating a business reduced from 35 per cent
hardest by the recent lockdown. The wholesale and retail before COVID-19 to 28 per cent, following the onset of
sector, one of the major contributors to tax revenue, the pandemic and the consequent lockdown in 2020.
also suffered from restrictions on the movement of In urban areas, a reduction of 14 percentage points
people, and from reduced household incomes. UNICEF from 51 to 37 per cent was recorded. The risk of some
estimates that economic output in the accommodation small enterprises permanently closing after the 42-day
and food sector, cash crop, arts, and entertainment lockdown is high; especially because they were already
sectors may have fallen by at least 60 per cent during struggling to return to the pre-pandemic levels at the
the period of the total lockdown. time the recent lockdown was announced. In 2020,
because of the first total lockdown, about 9 per cent of
non-farm family businesses permanently closed.3
KEY MESSAGES
• COVID-19 economic recovery plans should
prioritize creation of decent jobs, further
skilling of young people, and consideration
for fiscal packages to boost their business
activities if the country is to reap the
demographic dividend.
1 https://www.finance.go.ug/sites/default/files/The%20Budget%20Speech%20for%20FY%202021-2022.pdf
2 ILOSTAT, 2020
3 Uganda Bureau of Statistics High Frequency Phone Survey, 2020
1,500
1,000
500
0
020
2020
2020
020
2021
2020
2021
2021
020
2020
2020
2020
2020
2021
2020
2021
Jul 2
Oct 2
2
Feb
Apr
Feb
Jun
Jan
Apr
Sep
Mar
Aug
Nov
Dec
Mar
May
May
Source: Ministry of Finance, Planning and Economic Development, Performance of the Economy Reports
FIGURE 2: PERCENTAGE DECLINE IN TOTAL REVENUE RECEIPTS OF SELECTED SECTORS IN 2020/21 COMPARED TO 2019/20
-10% Education
4 https://www.finance.go.ug/sites/default/files/Publications/Performance%20of%20the%20Economy%20Report%20-May%202021.pdf
5 Ministry of Finance, Semi-Annual Budget Performance – 2020/21 (December 2020)
6 https://www.finance.go.ug/sites/default/files/The%20Budget%20Speech%20for%20FY%202021-2022.pdf
FIGURE 3: UGANDA DOMESTIC AND EXTERNAL DEBT STOCK, SEP 2018 - MARCH 2020
14
12
US$ BILLIONS
10
6
2020
2019
2019
019
2019
2020
2018
018
2018
2019
019
2019
2019
019
2018
2019
2020
2019
2019
Oct 2
Oct 2
2
Jul 2
Mar
Mar
Jun
Dec
Feb
Sep
Dec
Feb
Sep
Aug
Apr
Nov
Nov
Jan
Jan
May
10 https://www.finance.go.ug/sites/default/files/The%20Budget%20Speech%20for%20FY%202021-2022.pdf
11 Ibid
12 MoFPED, Debt Statistical Bulletin, March 2020
13 https://www.imf.org/en/News/Articles/2021/06/01/pr21152-uganda-imf-and-uganda-reach-staff-level-agreement-on-3-year-us-1-billion-financing-package
14 https://www.afdb.org/en/news-and-events/press-releases/uganda-african-development-fund-approves-316-million-loan-covid-19-response-37030
15 https://www.worldbank.org/en/topic/debt/brief/covid-19-debt-service-suspension-initiative
16 Ministry of Gender, Labour and Social Development (MoGLSD), 2021, Rapid Assessment of the Impact of COVID-19 on Labour, Employment and Productivity
17 Ministry of Gender, Labour and Social Development (MoGLSD), 2021, Rapid Assessment of the Impact of COVID-19 on Labour, Employment and Productivity.
18 ILOSTAT, 2020
19 https://www.worldbank.org/en/country/uganda/publication/uganda-economic-update-uganda-can-benefit-from-the-demographic-dividend-by-investing-more-in-education-health
20 See story: https://nilepost.co.ug/2021/08/05/three-arrested-for-kidnapping-four-year-old-boy-demanding-for-shs50m-ransom/
FIGURE 6: TRENDS IN INFLATION, INTEREST AND EXCHANGE RATES, JANUARY 2020 - JULY 2021
Exchange rate, USD:Mid official rate Bank Rate to Commercial Banks (as a %)
Inflation (Annual, all items %) Food crops and related items Index, annual %
Central Bank Rate (CBR) (as a %) Energy Fuel and Utilities (EFU) Index, annual %
20.0 3,850
3,800
15.0
EXCHANGE RATE (UGX)
3,750
10.0 3,700
PERCENTAGE
3,650
5.0
3,600
0.0 3,550
3,500
-5.0
3,450
-10.0 3,400
020
21
020
2020
2020
2020
2020
021
2021
2021
2021
2020
2020
2020
2020
2020
2021
2020
2021
0
Jul 2
Jul 2
Oct 2
2
Jan
Feb
Apr
Jun
Jan
Feb
Apr
Jun
Aug
Sep
Nov
Dec
Mar
Mar
May
May
21 Ministry of Gender, Labour and Social Development (MoGLSD), 2021, Rapid Assessment of the Impact of COVID-19 on Labour, Employment and Productivity
No. of persons No. of persons No. of persons • The government is requested to support
stressed (IPC in crisis in emergency
level 2) (IPC level 3) (IPC level 4) activities that ensure continuity of learning
Source: Integrated Food Security Phase Classification (IPC), 2021
and safe reopening of schools.
35 Ibid © UNICEF/UNI325834/Abdul