Assessment of the informal sector in Uganda

Assessment of the informal sector in Uganda, July 2020

Funding Partner: Ministry of Finance, Planning and Economic Development (MoFPED).

The study seeks to explore ways of encouraging and bringing more informal players into the formal sector. Specifically, the study intends to understand Uganda’s informal businesses, the reasons for its existence, growth and therefore provide evidence-based recommendations to be implemented by key players to address informality and its negative implications especially on tax revenue collection.

• The study seeks to understand the measurement, nature, and composition, and the extent of informality in Uganda businesses and the main reasons for operating informality.
• Identify the political, economic, socio-cultural, technological, environmental, legal, and regulatory gaps, and incentives responsible for the persistent informality of business in Uganda.
• Assess the effectiveness of the current and previous interventions, aimed at promoting formal business operations, and the reasons for their success and/or failure.
• Identify, compare, and contrast best practices from peer countries in the formalization of businesses.
• Recommend feasible interventions to be undertaken by the various key players to address informality in the selected sectors.

Develop costed roadmap, indicators, and corresponding targets for the formalization of businesses in the selected sectors.