It sSeems, the impact of the United States freezing its foreign aid is just beginning to be felt.
Like we woke up on Monday with screaming headlines of the closure of the HIV clinics impacting 3,000 workers and millions of people who depend on them. The ministry of Health, a major beneficiary of the American foreign aid, issued a statement asking the workers affected to become patriotic and volunteer if they wish to.
Some people may actually wish to be volunteers but there are expenses involved like transport to workplaces or internet data for remote work and such other expenses. Then they need to also pay for other expenses. Rent or mortgage, healthcare, child expenses, and a plethora of household expenses, among others.
The impact of the freezing of American aid is going to impact a big percentage of Uganda’s population. The gains that have been made in HIV/ Aids are going to be reversed, leading to increased spread of the disease and even deaths. Ending HIV/Aids by 2030 now looks like a long shot.
Tuberculosis is going to be on the rise. Malaria and so many other diseases. Of course, African governments can do something but they will have to do something they have never done before — putting the people first. They would have, for example, to suspend the acquisition of military assets to ensure people have access to antiretroviral drugs.
They would have to suspend the purchase of luxury LandCruiser SUVs and rosewood furniture, fly economy and only when it is absolutely necessary and spend within their means.
Like we discussed last week, we would also have to utilize the loans that we have acquired and left in the bank vaults (nearly $4 billion) while spending billions of shillings on them. That money alone can help bridge the US aid gap in the short run as we think for more long-term sustainable solutions.
There is a lot of talk nowadays on retirement and how people can save and invest for it. It is still early days for the majority of Ugandans to have any form of retirement savings but the talk is a step in the right direction especially for those who are in formal employment or even formalized businesses.
However, there is a need to supplement this with a talk on sudden loss of income as we have seen with the current aid freeze or like it happened with the Democratic Governance Facility of the Europeans that the Uganda government suspended a few years ago. What do people need to do in such sudden cases?
It calls for savings of at least six months’ expenses on which one can survive as they figure out what to do. Of course, six months run very fast when you are unemployed but at least it is better than nothing at all. If you have a job today or in business, this is something that must be at the back of your mind.
Imagine how many suppliers to organizations running on American foreign aid are going to go out of business. This responsibility, however, should not only be to employees and businessowners. There is a lot governments can do and many of them including those in developing countries like Uganda are able to do something.
They can create a facility that supports people who lose jobs or businesses and haven’t been able to find employment or any form of contracts for more than six months.
It could be a form of insurance and run with private sector expertise where people who earn a regular income could contribute a small percentage of their income which they can access once they have lost jobs or businesses.
It has to be mandatory for employees with government also investing some money into it especially at the beginning. It shouldn’t be a government agency though. Government should only be a regulator or it could be placed in already existing regulators like the Uganda Retirement Benefits Regulatory Authority.
Alternatively, during the Covid-19 pandemic, many countries put in place funds business could access at low interest rates to facilitate recovery. There is a need for a fund like that on a permanent basis for especially small businesses that can prove that have lost contracts and have been tax compliant.
That way, the economy could be protected when people experience sudden loss of income.
djjuuko@gmail.com
The writer is a communication and visibility consultant.
