Free Access | 2024-04-12

DYNAMICS OF THE SOCIO-ECONOMIC IMPACTS OF THE COVID-19 PANDEMIC ON MSMEs IN UGANDA

Authors/Editors: Ibrahim Kasirye (PhD) ,  Sarah Ssewanyana (PhD) ,  Madina M. Guloba (PhD) ,  Swaibu Mbowa (PhD) ,  Regean Mugume ,  Smartson Ainomugisha ,  Linda Nakato (PhD)

Abstract:

Micro, Small and Mediu-0m-sized Enterprises (MSMEs) play a pivotal role in private sector development. This report presents findings from a nationally representative panel of 1,111 MSMEs that we tracked between 2020 and 2022 at a time when the government enforced measures to contain the spread of COVID-19. Ideally, the key rationale for this study is to provide detailed evidence on the short, medium, and long-term effects of the COVID-19 pandemic on MSMEs in manufacturing, tourism/hospitality, and education sectors in Uganda. Six key insights from the findings are that (1) small enterprises were the most affected by the closure of both premises and operations from the onset of the COVID-19 pandemic (Jan-June 2020) until after the economy fully reopened (Jan-June 2022) when the share of micro-enterprises slightly went above that of small businesses. The education sector had the largest share of enterprises that closed operations and premises until the schools resumed operations in January 2022. A larger share of male-owned enterprises closed both premises and operations during lockdowns, and most enterprises across all sectors could not keep their operations running while their premises were closed; (2) enterprises across different business sizes and sectors increasingly sourced raw materials locally after the COVID-19 pandemic outbreak and this trend had not changed after full reopening of the economy; (3) all businesses suffered a reduction in sales revenue and profits during lockdowns; (4) an estimated 366,000 jobs were lost from 2019 to the end of second lockdown period (June-August 2021). A total of 11,000 jobs had not yet been recovered by October 2022. Specifically, small and medium-sized enterprises had not yet recovered 26,000 and 2,000 jobs respectively. The manufacturing sector had a slow job recovery, with an estimated 16,000 jobs having not been recovered by October 2022, followed by the education sector at 8,000 jobs.