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.
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.
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.