ILO’s timely interventions assist small businesses in Uganda

Business support grants and business management training from the ILO provided a new lease of life to some of the microenterprises in Uganda struggling to recover from the impact of the COVID-19 lockdown measures.

News | 04 August 2022
Maryan Hassan, a refugee and owner of a small business in Nakivale, Uganda @ILO/FSME
Ms Maryan Hassan is a refugee from Somalia, living in Nakivale Refugee Settlement, Isingiro district in Western Uganda. The 48-year-old widow who came to Uganda in 2011, runs a grocery shop to complement the dwindling relief support she receives. With the little earnings she makes, she takes care of her family of seven, including a three-year-old grandchild.

But Hassan’s business, which had an annual turnover of US$ 1900 could have closed permanently in 2020, had it not been for a grant from the International Labour Organization (ILO), through the PROSPECTS Programme.

The government of Uganda closed its borders in March 2020, restricted movements and suspended non-essential economic activities in a bid to control the spread of COVID-19. The total lockdown of the economy was important to save lives and manage the health system but had a negative impact on businesses due to supply chain disruptions and drastic drops in demand.

“During the lockdown, my shop remained open since I sell groceries. But when my stock was sold out, I couldn’t refill because there was no transport. I used all the money I had, including the business capital, to take care of the family,” shared Hassan.

Unlike Hassan’s grocery shop, another business, “God is Good Studio”, which offers secretarial services, was forced to remain closed during the lockdown. The owner, 29-year-old Munguakonkwa Mufungizi, a refugee from Democratic Republic of Congo, had no other stream of income and even had to let one of his staff go.

“I closed my business premises and shifted the printing machine to my house, but very few people knew where I live. My income dropped suddenly. It became hard for me to take care of my wife and our three children,” he recalls.

Following the easing of lockdown in September 2020, the ILO PROSPECTS Programme provided business grants to 200 micro-enterprises owned by refugees and host community members to resuscitate these businesses. Each beneficiary in Rhino Camp, West Nile, and Nakivale in Isingiro district received a cash grant of US$ 200. Hassan and Mufungizi were among the beneficiaries of this grant.

The business grants were extended through the Federation of Small and Medium-Sized Enterprises (FSME) Uganda, a member-based organisation. Most of the micro-enterprises used the grants to cover losses incurred during the duration of the lockdown or to meet any short-term cash flow needs of the business to get back in operation or buy assets.

Hassan bought a refrigerator, for example, which helped her kick-start her business after the lockdown.

“The fridge helped to get my business back to life when the lockdown was lifted. Because of the hot weather, cold drinks are always in demand in Nakivale. When someone comes to buy cold drinks at my shop, they end up buying something else as well. If it was not for the rising commodity prices now, my business would have been on the road to recovery,” explained Hassan.

For Mufungizi, the grant helped him to rent new business premises, to buy a printer and to recruit two more persons. “I rented a new place that is located closer to the Base Camp, where the demand for my services is more,” he said. “Although my weekly sales have increased from an average of Ugx 350,000 (US$ 92) in 2021 to the current Ugx 600,000 (US$ 157), the profit is being eaten up by the increasing cost of materials,” he added.

Businesses in refugee-hosting districts, like many others in Uganda, are operating under unprecedented hard economic times – from experiencing the impact of COVID-19 to the rising commodity prices.

Jackline Mbabazi, a host community member and participant of the GETAhead training @ILO/FSME

According to John Walugembe, FSME Executive Director, the business grant has supported their most vulnerable members to remain in operation. “We know that businesses are operating in difficult conditions and need to build resilience. The business grant from the ILO has helped our most vulnerable members to stay in business, which is a big achievement at such a time,” he explained. “Beyond survival, the training that these entrepreneurs are getting will help them grow their businesses,” he added.

In addition to the grant, the PROSPECTS Programme provided business management training to 197 FSME members, using the ILO’s GET Ahead tool, a gender-sensitive entrepreneurship training programme designed for women and men with basic numeracy and literacy skills. The training, which was the first one for most of the participants, also included sessions on the benefits of business formalization.

Training of local host and refugee entrepreneurs on the ILO’s Get Ahead module in Nakivale @ILO/FSME
I have learned how to keep business records and how to separate business money from personal money,” reports 23-year-old Jackline Mbabazi, a host community member in Isingiro district. “I have also learned to diversify my products and grow my business. For example, earlier I was only serving drinks at my shop but now I will start producing fruit juice. It will attract more customers within the same premises and without much additional investment,” she elaborates.

The PROSPECTS Partnership works to bridge the humanitarian to development nexus in the refugee response. With funding by the Government of the Netherlands, PROSPECTS brings together five agencies - IFC, ILO, UNICEF, UNHCR and World Bank - to devise collaborative and innovative approaches for inclusive job creation and education in contexts characterized by forced displacement.

- The article was contributed by Grace Rwomushana, National Programme Coordinator, ILO PROSPECTS Uganda, following her recent field visit to Nakivale Refugee settlement