How Covid-19 has affected jobs

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How Covid-19 has affected jobs
How Covid-19 has affected jobs

Africa-PressUganda. At least a million workers were either terminated or forced to stay home for an extended period due to the Covid-19 induced lockdown, with official figures showing that at least 17 per cent of employers were forced to lay off workers.

Jobs for at 998,665 workers were either terminated or temporarily suspended due to the Covid-19 lockdown that was imposed a year ago.

Business owners continue to cry out for help from the government, withmany of them saying such support has not been forthcoming.

Statistics from the Ministry of Gender, Labour and Social Development, obtained from various sectors, indicate that the abrupt closure of the tourism industry, including hotels, affected about 430,000 jobs out of the 480,000 placements, while another estimated 350, 000 teachers in private schools have been out of formal employment since March 2020.

The government was also operating at 30 per cent capacity out of 312,379 employed in civil service during the Covid-19 period.

Mr Karl Marx Musinguzi, a researcher at the Gender ministry, said while the government continued to pay its workers, their productivity was low as many remained home as part of the measures to reduce workplace congestion to contain further spread of the virus.

Covid impact

In its quarterly labour market information bulletin report (July- September 2020), the Labour ministry notes that Uganda Investment Authority (UIA), together with the Uganda Bureau of Statistics (UBOS), conducted a Covid-19 impact assessment on 870 businesses and workforce, which showed that 16.5 per cent of the enterprises had staff layoffs countrywide, and another 23.8 per cent had introduced stay-at-home measures with minimum facilitation, while 21.8 per cent of the sampled companies had limited staff working hours.

About 32 per cent of enterprises were uncertain of business continuity, while 19.1 per cent had registered revenue loss and another 14.5 per cent failed to service their loans.

Business closures contributed to 14.2 per cent, cash flow challenges had 11.7 per cent, while productivity and demand stood at 8.4 per cent.

“Covid-19 has led to significant layoffs, including business shrinkage and downsizing. Businesses have run illiquid and are prone to liquidation,” the report says.

The report calls for stimulus packages through expansionary monetary policies – releasing more money into circulation – and underscores the importance of the Buy Uganda Build Uganda (BUBU) policy to promote local content.

President Museveni has in most of his updates on Covid-19 indicated that money would be released to struggling business enterprises to support them navigate the murky waters.

However, despite easing some of the lockdown measures starting July last year, many businesses, particularly those in the entertainment industry, remain closed to-date. Most of those that have been reopened are struggling to return to their pre-lockdown status.

Mr Douglas Opio, the executive director of the Federation of Uganda Employers (FUE), says the government has only disbursed close to a half of the Shs1 trillion stimulus package to employers and appeals that all the funds that had been promised be released to ensure recovery.

The money, Mr Opio says, has a 12 per cent annual interest, with a grace period of about a year depending on the business. He, however, says the money is not enough for every enterprise across the country to benefit.

Mr Opio says Shs455b was released to the Uganda Development Bank (UDB) in August last year and only Shs444b was approved for disbursement. He says employers have also received a Shs61.8b grant from the European Union (EU) through the bank, although he does not disclose how much of this has been given out.

Mr Opio says their survey established that about 100 well-established businesses had closed with schools due to the lockdown.

Pressure over NSSF savings

The government has also come under fire over perceived refusal to let workers access part of their savings in the National Social Security Fund (NSSF), which many argue would alleviate some of the worst effects of the lockdown and help put the economy back on the path of recovery.

Mr Justus Asimiire, one of the savers with NSSF, says he has been out of job yet he has five children to feed, pay their medical bills and school fees. He says he has more than Shs40m saved with NSSF but the institution is unable to bail him out of the current crisis.

“I had a salary loan of Shs7m when I lost my job. My produce business that I had started with my savings collapsed because I had to offset the loan. I have children to take care of. I have no hope of getting money, except the one saved with NSSF. Is government waiting for me to die to release it? I need this money when I can still invest it. I beg the President to assent to the NSSF amendment Bill advocating midterm access,” the 48-year-old says.

Parliament, months ago, passed an amendment to the NSSF Act providing for midterm access to 20 per cent of accumulated savings and interest in NSSF for workers who have saved for at least 10 years and are 45 years old or older. The President, however, has not yet assented to the amendment, with controversy erupting amid allegations that the Ministry of Finance officials led by Finance minister Matia Kasaija have objected to the amendment. The President is expected to offer an update on the matter in his Labour Day speech today.

Mr Wilson Owere, the National Organisation of Trade Unions (Notu) chairman-general, told Saturday Monitor on Thursday that they have written to the President emphasising the need for him to assent to the amendment. The life of the 10th Parliament will elapse in just over a week and it is not clear what would happen to the amendment it has passed if the President has not returned the Bill to the House by the expiry of its term.

In addition, Mr Owere said they are still negotiating with government to fulfill some of its pledges to support businesses and individuals to get back on their feet.

Mr Owere said this intervention will be a relief if it comes through this Labour Day.

“Many people remain unemployed even as businesses reopen. There are those who are still closed such as bars, nursery schools and lower primary school classes. We are negotiating that workers who were on half-pay be put back on full salary, especially if business are back to operation. We are asking government to consider these businesses and release the financial support it pledged,” Mr Owere said.

Ms Peace Mutuuzo, the State Minister for Labour, says the day’s theme centres on enhancing innovation for increased employment creation and labour productivity as a sustainable Covid-19 response.

Ms Mutuuzo explains that her ministry has generated data on employment in the country to inform the debate on the minimum wage and is waiting for submission to Cabinet for consideration.

Sources close to the Gender ministry say the proposed minimum wage has been maintained at Shs136,000 per month as earlier suggested under the Statutory Minimum Wage for Uganda report, 2016.

Background

What workers’ bodies want President Museveni to address this Labour Day

● Job creation/ protection plans

● NSSF midterm access

● Minimum wage

● Actualise stimulus package to companies/ individuals affected by lockdown

● Local content Bill

● Market for laocal content

● Reopen entertainment places, bars, and schools

● Protection of consumers

● Realistic fight against corruption

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