Efficacy of COVID-19 Macro Economic Policy Responses in Uganda

This research paper examines the macroeconomic impact of COVID-19 on Uganda and evaluates the efficacy of the government's monetary, financial, and fiscal policy responses, noting a trade-off between business survival and increased public debt.

• The COVID-19 pandemic caused an unprecedented economic and health shock in Uganda, resulting in economic growth slowing to 2.9 percent in FY2019/20. This decline particularly impacted the industrial and service sectors, leading to job losses and reduced income, while low food inflation caused by trade slowdowns and low aggregate demand likely increased rural poverty.
• The Government of Uganda (GoU) implemented monetary and financial interventions that successfully lowered market interest rates to boost household consumption and private sector investment. Financial market interventions effectively managed liquidity, capital adequacy, and credit risks, maintaining sector stability with soundness indicators remaining above regulatory requirements.
• Fiscal policies provided formal businesses with a temporary liquidity shield via tax relief, which protected jobs and livelihoods. However, these measures increased public debt, leading to the crowding out of the private sector through domestic borrowing and increasing external debt vulnerability, as shown by the Present Value (PV) of External Debt to Exports ratio.
• The UGX 165 billion Emyooga poverty eradication scheme was established to target the informal sector and youth. The paper suggests that the government must reduce corruption-related leakages and expand eligibility beyond the 18 to 35 age bracket to improve inclusivity and ensure funds reach the most viable SACCOs.

APA

South African Institute of International Affairs (2021). Efficacy of COVID-19 Macro Economic Policy Responses in Uganda. https://saiia.org.za/research/efficacy-of-covid-19-macro-economic-policy-responses-in-uganda/

Chicago

South African Institute of International Affairs. Efficacy of COVID-19 Macro Economic Policy Responses in Uganda. 2021. https://saiia.org.za/research/efficacy-of-covid-19-macro-economic-policy-responses-in-uganda/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Efficacy of COVID-19 Macro Economic Policy Responses in Uganda |date=20 September 2021 |url=https://saiia.org.za/research/efficacy-of-covid-19-macro-economic-policy-responses-in-uganda/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2021efficacy, author = {{South African Institute of International Affairs}}, title = {{Efficacy of COVID-19 Macro Economic Policy Responses in Uganda}}, institution = {South African Institute of International Affairs}, year = {2021}, month = sep, url = {https://saiia.org.za/research/efficacy-of-covid-19-macro-economic-policy-responses-in-uganda/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }