Support informal sector to revive economy

Jun 11, 2020

Post-COVID-19 economic recovery rehabilitation of Myooga/Etapai/Reiko/Diro/ enterprise will help revive the economy, fulfill the presidential pledge and also create jobs.

OPINION

The last quarter of 2018 up to the end of July 2019 witnessed the head of state traversing the country holding radio talk shows and meetings with both local council and National Resistance Movement (NRM) party leaders in all 18 sub-regions to rally Ugandans in a wealth creation campaign that would be executed through the formation of Myooga / Etapai/Reiko/Diro/special enterprise groups that would be supported by the Government under the finance ministry in the micro-finance docket. Thanks to President Yoweri Museveni for this brilliant idea.

Almost a year down the road, most populations, especially in urban areas have heeded to the presidential guidance and formed the required groups in anticipation of presidential support for wealth creation.

For the people that the President rallied to form specialised groups, COVID-19 pandemic is a curse that directly halted businesses and largely all activities in informal sector groups. These groups form the base of the sector.

The people who formed the specialised groups live hand to mouth and are now struggling with paying rent both at work and at home, payment of utility bills like water, electricity, and not to forget school fees for children have largely eaten their working capital and are heavily indebted with bank loans. These will struggle without the Government support.

A case in point is of mechanics in Kabale town who had organised themselves into A SACCOS called Kabale Mechanical Workers and Cooperative Savings and Credit Society Limited. The members of the SACCOS were saving money on daily and were investing it in buying spare parts and selling the spare parts to garage owners. The proceeds then could be lent out to members.

However, with the recent lockdown, members have not saved for the last one month, but also the liquidity has been largely borrowed for consumption.

The second example is of slaughterhouse where butchers organised them into Kabale Young Stars Slaughter House Association, pooled money and were slaughtering around 20 cows a day. Due to lockdown, they now slaughter about eight cows daily. The above is a reflection of the trends in the different informal sectors countrywide.

Affected groups include drivers (taxi, bus, and special hire drivers), mechanics, bodaboda riders (motorbikes, Tuk Tuk and bicycles), welders, vendors, women entrepreneurs, among others.

Post-COVID-19 economic recovery rehabilitation of Myooga/Etapai/Reiko/Diro/ enterprise will help revive the economy, fulfill the presidential pledge and also create jobs.

These groups/SACCOS if supported by the Government can offer a borrowing base to members who will invest back the money in their small businesses and on making profits, will be able to pay their utility bills sustainably as opposed to the Government paying the bills for the next six months as suggested by some section of the legislators. They will also be able to settle bank loans, pay school fees for their children, while generating income for their families.

Therefore, as Uganda ponders on borrowing billions from various international financial institutions to manage and implement the post-COVID-19 economic recovery plan, I add my voice in calling upon the President and Parliament to quickly focus on the utilisation of the funds under the docket of micro-finance to recapitalise and provide liquidity to the informal sector.

The writer is the Kabale Youth Chairperson

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