A Rapid Assessment of the Effect of the COVID-19 Lockdown on Livelihoods and Micro, Small and Medium Enterprises in Uganda

Since the outbreak of the COVID-19 pandemic, Uganda has instituted two lockdowns—in March 2020 and June 2021. The second lockdown to contain the spread of COVID-19 has had far-reaching effects on a wide range of businesses. A rapid assessment was conducted to assess the lockdown effects on businesses in greater Kampala metropolitan, covering; market vendors, teachers, transport sector, fuel stations and households. The study results revealed that the lockdown led to a significant reduction in sales and profitability by more than 60%. At the same time, business costs increased by more than 40%, and that female owned businesses were relatively more affected compared to those owned by males. The study also found that the lockdown affected employment as many lost their jobs due to movement restrictions, and employee lay-offs by businesses. The study findings indicate that with diminished cash flow and/or business activity, there is a need to support businesses through loan restructuring, affordable and patient financial support, and tax incentives. Also, interventions to ensure readiness of markets and other essential business areas or activities to operate in a lockdown situation are important. In addition, there is a need to scale-up vaccination against COVID-19 and open schools (with stern monitoring of SOP adherence) to minimize further COVID-19 adverse effects on the education sector and related negative spillover. The rapid assessment also surveyed community leaders to gauge the short-term impacts of second lockdown on households. In addition to businesses, the lockdown affected households by increasing food insecurity, domestic violence, early child marriages, and un-wanted pregnancies. School closure has affected teachers through job loss and reduced income, and children through reduced learning. A number of teachers have considered abandoning the teaching profession hence posing huge threat to future human capital development efforts.