The impact of the COVID-19 pandemic on Ugandan businesses has been greatly reported. However, the dent it has had on female-owned enterprises and the slow recovery they are experiencing is not getting the attention it deserves.
Majority of women engaged in business in Uganda fall in the Micro, Small, and Medium-sized Enterprises (MSMEs) category either as proprietors or employees.
The Economic Policy Research Centre (EPRC), with support from the International Development Research Centre (IDRC), Canada has in the last two years published a series of studies examining the COVID-19 pandemic’s impact on MSMEs with focus on enterprises in the hospitality and tourism, manufacturing, agribusiness, and education sectors.
Our studies indicate that about a half of the sole proprietorship ventures are female-owned, suggesting that MSMEs play a crucial role in supporting female participation in the economy. Yet this category remains most vulnerable to shocks, more evident when the pandemic hit.
The research further revealed that 77% of female-owned enterprises experienced reduced ability to repay their loans or access new loans, compared to 66% for male owned enterprises. This is because most women lacked collateral required to access most loans.
At the height of the pandemic, schools and daycare centers closures increased childcare needs, affecting working mothers. Job losses were more prevalent among youth and female workers, and the magnitude of wage cuts was also higher for female and youth employees.
Closed shops in Kampala. Women-owned businesses suffered tremendously.
Recovery rate of female-owned enterprises remains agonizingly slower than that of male-owned enterprises as the economy comes to life again. The weakest resilience, our study indicates, was in the hospitality (tourism) sector followed by manufacturing. Employment in the hospitality sector is largely dominated by women.
The main challenges of business resilience were weak adaptive ability to harness technology to effect relevant changes in the product line or business operations. This was demonstrated in the weak ability to leverage available knowledge and information, such as government funding, including the stimulus package which were widely communicated through online channels.
Most female-owned businesses remain informal and our recent study on informality shows that a dismal 16% have the knowledge and skill respectively to operate a computer. This makes this year’s international women’s day theme, DigitALL: Innovation and technology for gender equality, especially handy to initiate debate on how to support adaptability and resilience of women-owned businesses. We share some actions and interventions that can facilitate women entrepreneurs to harness the digital and technological transformation.
- The government should invest in providing knowledge and skills to women to operate different technological devices, especially basic computer skills. This will help women leverage knowledge and information, access external resources, that aid in planning and preparedness, and benefit from innovation and diversification. This can be supported by public-private partnerships with telecom companies to reduce the cost of data; tax incentives on ICT equipment to make them affordable; and a deliberate push to widen internet connectivity to all parts of the country.
- Conduct women in business-tailored trainings about the opportunity technology presents for their businesses.
- The private sector, especially the MSME’s are a central driving force behind economic participation, including employment creation for the youth and women. They should be encouraged to prioritize gender diversity, while also closing the technology skills gap and demand for skills and talent in the private sector. This will foster gender equality, livelihood, and recovery of the economy.
- The government should also consider gender-responsive social protection policy responses to support job and income security of women and youth, given that the scale of job losses and wage cuts for this group.
This article was published in the print version of Daily Monitor March 8, 2023