Key findings

The informal economy encompasses all street and market-based exchange of goods and services by business units that have no tax identification number (TIN), but may or may not have business permits (trading licenses) issued by local authorities in areas where they operate. Much as the informal sector has, for the last decade, consistently contributed more than 55 percent to Uganda’s Gross Domestic Product (GDP), it has its own unique challenges. 2 However, the sector is important because of its contribution to job creation and the generation of incomes for the poor.

SIHA conducted a study to evaluate the impact of the Covid-19 pandemic response on urban poor women, particularly street and market vendors. The study was conducted between July 12th – 15th of 2022, through interviews with four women market and street vendors in Arua and Kampala districts.

Some of the findings indicate that market and street vendors are significantly affected by taxes, insufficient capital, and inspections by authorities regardless of the business operation. Furthermore, increased transport costs create a significant barrier in the urban informal economy.

When the Covid-19 pandemic struck, these challenges were exacerbated by the restrictive measures put in place by the government to curb the spread of the virus, such as the ban on public transportation.

2 Salmon Mugoda, Stephen Esaku, Rose Kibuka Nakimu & Edward Bbaale | Robert Read (Reviewing editor) (2020) The portrait of Uganda’s informal sector: What main obstacles do the sector face?, Cogent Economics & Finance, 8:1, DOI: 10.1080/23322039.2020.1843255 “You have seen the distance from my market (Driwala Market) to Arua town. So, you have to foot from here to the town (to replenish stock), which you have not been doing (before). Then, (sometimes) you have to use a boda boda, which even becomes double expensive. So you find that whatever you are selling, it is even actually making no profit or very low profit.”3

Women market and street vendors who were interviewed for this study indicated that before the pandemic, they belonged to cooperative societies. However, when the first national lockdown and restrictions on public transport were enforced on March 30, 2020, these women were unable to work for three weeks. As a result, their savings dwindled to nothing as they juggled taking care of the home and paying rent. “At that time (when the lockdown was announced), I had 185,000 UGX in my cooperative and 475,000 UGX in my mobile money account. It took me eight months (to use up the savings), and thereafter, things became hard.”4

Market and street vendors who previously sold non-food items before the pandemic had to adapt to the situation when only food-vendors were allowed to operate in markets.5 However, they faced challenges associated with entering into a new business field without the necessary skills and knowledge. “It wasn’t easy, because you know, you are used to dealing in this business (secondhand clothes) and then, you are shifting - all of a sudden - to start a new business

3 Jane Akwero, market vendor, Driwala Market, Arua City 4 Mercy Ozizuyo, Market vendor, Awindiri Market, Arua City 5 ‘FULL SPEECH: President Museveni’s 5th COVID-19 address (The Independent, 2020). https://www.independent.co.ug/full-speech-presidentmusevenis-5th-covid-19-address/ Accessed on July 21, 2022.