A Business Impact Survey that was released today has revealed that about 50% of informal businesses in Uganda will be out of business or will fall below the poverty line after the covid19 lockdown.
Presenting the survey findings, Dr. Yusuf Kiwala from Makerere University said majority of the companies in Uganda are fragile and have a relatively low cash flow coverage.
Others have to take adjustment measures to keep their profitability at a level that would allow their continued operation.
According to Dr Kiwala, only 15% of the surveyed companies can sustain more than three months of operation on their current cash flow while 85% of all businesses will be in financial distress after the three months of lockdown measures.
The aim of the survey carried out in the month of April by the United Nations Capital Development Fund, UNCDF in collaboration with Makerere University and URA was to assess the actual and expected impact of COVID-19 on business operations.
The feedback from the survey would then inform development of policy recommendations and a business relief and recovery package to alleviate the negative impact of COVID-19 on the private sector and accelerate economic recovery.