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Uganda’s Tourism Sector Loses Shs3.8Trn Due To COVID-19 Impact As Foreign Visitors Fall By 69%

A gorilla eats leaves in the jungle in Uganda.

The outbreak of the Coronavirus pandemic has seen Uganda’s tourism sector and economy at large lose Shs3.891Trn, the Ministry of Tourism, Wildlife and Antiquities has said.

Doreen Katusiime, Permanent Secretary, Ministry of Tourism made the revelation today while appearing before Parliament’s Tourism and Trade Committee that is investigating the impact of second wave of coronavirus on the tourism sector.

The impact of the pandemic on the tourism sector was first alluded to by Minister of Trade, Tom Butiime who told Parliament that tourism brings in USD1.6Bn and contributed 8% of the GDP with over 500,000 jobs, but all these were reversed with onset of the pandemic.

Katusiime further explained that foreign visitors to Uganda dropped by 69.3% to 473,085 from 1,546,620 visitors recorded in 2019. The tourist arrivals in 2020 declined to the levels of 2005.

“The foreign exchange earnings dropped threefold in the year 2020 from USD1.6bn approximately Shs5.655bn that Uganda earned from foreign tourists in 2019 to US500M equivalent to Shs1.767Trn in 2020,” said Katusiime.

She also told the Committee that Uganda registered a decline in hotel room occupancy rates from 51.9% in 2019 to an average of 20% in 2020, which means that the demand for agricultural produce and other services from host communities and local manufacturers was lost to similar magnitude.

 “We registered booking cancellation in over 90% of hotel facilities. This led to a loss of revenue amounting to USD320.8M about Shs1.19Trn in addition to other business losses,” Katusiime said.

According to Government, at least 70% of the workers in the tourism industry had lost their jobs and 91% of the tourism entities had downsized on the workforce by end of June 2020 due to the financial hit caused by the Covid-19 pandemic.

The Tourism Ministry also stated that the agencies under its auspice also recorded reduction in revenue like Uganda Wildlife Authority, Uganda Wildlife Education Center, Uganda Hotel and Training Institute among others  which only collected Shs31.261bn compared to Shs130.075bn collected in 2019 before the pandemic.

However, there have been signs of recovery with at least 30% jobs recovered by end of March 2021, with non-residents visits increased from 3,577 to 7,318 visitors.

In their recovery recommendations, the Ministry asked Parliament to revise the over 20 taxes, licenses and fees currently being charged on the sector.

“In the interim some of these interventions would enable the sector to recover faster. Extend the waiver of VAT on accommodation in Kampala to 30th June 2022. Extend waiver of VAT on accommodation in Kampala to 30th June 2022,” said Katusiime.

While reacting to the news that European Union injected Euro6Million in Uganda Development Bank for players in tourism industry to borrow, Mwine Mpaka (Mbarara City South) tasked the Ministry to furnish the Committee with evidence of any tourism companies that have benefitted from UDB. 

“Of the Euro6Million that was deposited at UBD, what is the criteria and how many people have accessed that money to day? People say the conditions are stringy,” asked Mwine.

He was also backed by Elijah Mushemeza (Sheema South) who asked, “Are you aware any beneficiary from the tourism sector of the UDB money because government can’t keep money lying there when it isn’t accessible.”

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