Mbale shop owners stranded as city authorities close premises over ground rent

________________

Authorities in the Industrial City Division of Mbale city have closed hundreds of business premises over non-payment of ground rent and licenses.

The operation started on Wednesday, April 15, in areas of Market Street, Bishop Wasike Road, Manafwa Road, South Central Road, and Naboa Road. 

According to Industrial City Division Senior clerk Geoffrey Mugisa, his office plans to recover over sh3 billion, which the division has lost due to tax evasion by those traders for the 2022, 2023, 2024 and 2025 financial years. 

Some of the shops that were closed by city authorities in Mbale on the morning of April 15, 2026. (Photo by Paul Watala)

The clerk adds that activities like road maintenance, opening new roads, paying councilors, and paying casual workers have been paralysed due to a lack of local revenue.

"Non-payment of taxes has severely impacted the Mbale City budget, resulting in a 61% funding gap last financial year, with only sh2.3 billion collected out of a projected sh6 billion. " Mbale City senior spokesperson James Kutosi said.

"This underperformance is largely driven by resistance from taxpayers, political interference, and corruption among tax contractors, which has led to suspended revenue collection, leaving the city with an unapproved or severely constrained budget," Kutosi said. 

He said that the locally raised revenue for the first quarter of FY 2024/25 reached only 11% of the target, with low collections stemming from resistance to paying property taxes and delayed, inefficient contracting of revenue collection.

"Due to corruption and failure by contractors to remit funds to the city treasury, officials have had to suspend the collection of fees from street parking, markets, and advertising," he said. 

He noted that the city consistently fails to meet local revenue targets, which has been a recurring issue, with previous reports indicating a reliance on limited central government transfers.

Kutosi said that the Low revenue has directly resulted in poor service delivery and a struggle to finance the city's operational costs.

"The city's budget is severely strained by outstanding debt and legal costs, including over sh644 million in penalties from land disputes and sh178 million in unpaid councilor allowances," he said. 

Revenue mobilisation is hindered by political statements advising against payment and general reluctance among residents to pay fees for services like parking. 

Kutosi said that to address these issues, the city has attempted to implement an electronic revenue system, Elograve, to enhance accountability and reduce fraud, though implementation remains a challenge.

Samuel Wamayi, one of the affected business persons at Mission cell, says that Covid-19 affected them highly, which has led to the delayed clearance of ground rent and licenses to the Northern division since most of the shops were closed during the lockdown.

Some of the business community leaders in Mbale City condemned what the Northern city division did without first carrying out an assessment.

He adds that some business people have delayed paying ground rent and licences because they don’t know the amount of money they are required to pay for their business.