COVID-19: EU Gives Ministry UGX 25B for Tourism Industry Reopening

The Ministry of Tourism has negotiated a 6m Euro (25.2 billion) stimulus package from the European Union towards the private tourism sector for post lockdown operations.

This was disclosed by the Accounting officer of the Ministry of Tourism, Doreen Katusiime while interfacing with Members of Parliament on the Public Accounts Committee (PAC) this morning.

While presenting a statement on the impact of the Coronavirus (COVID-19) on the sector prior to discussing audit queries Katusiime noted that the tourism sector has been the hardest hit by the lockdown and private facilities will have great difficulty reopening.

The discussion over a stimulus for the sector was kick started by the deputy chairperson of the committee Okin PP Ojara who queried why the sector never received any funds from the COVID-19 supplementary budget that was approved by parliament. 

He questioned if in light of new Standard Operating Procedures (SOPs) for Hotels and lodges, funds were not required to enable these facilities to weather the harsh economic times.

Katusiime concurred that the sector is majorly private sector led and liquidity problems that the private tourism facilities are likely to face will be compounded by the new SOPs that were launched last week.

She says for instance a requirement that after a guest checks out, another 24 hours is required for cleaning among others.  

She disclosed that the EU stimulus package will be placed in the UDB for the private sector to borrow at a discounted rate of 8%.

Regarding government operations, Katusiime stated that out of a total budget of 197 billion shillings for the sector, 75% is generated internally through agencies like UWA and UWEC whose activities have been severely curtailed.

“They are providing a total of 6million Euros which we are going to give to the private sector for running costs because they will have liquidity problems at the beginning. Even as we talk now, there is a meeting going on at ministry of finance. We have compiled information from these hotels on how much they need let’s say for 3 months, 6 months. This money will be put in UDB from the European Union because European Union is giving a grant but now UDB will lend it to the private sector atleast at very favourable rates. They are talking about 8%.”

Several hotels in the country are out of business during the entire period of the COVID-19 lockdown especially because most of their clients are from abroad.