Recovery from the COVID-19 shock and the informal labour market in urban Uganda

  • We conducted a phone survey of a representative sample of manufacturing firms and their workers in Uganda in Spring 2022, two years after the onset of the pandemic.
  • We find that the second lockdown implemented in Uganda in June- July 2021 resulted in a sharp increase in business closures, but these were largely temporary.
  • However, a sizeable share of firm owners and workers remain economically vulnerable after the lockdown, earning less than $50 per month.
  • Firm owners report lack of customer demand and difficulties in accessing inputs among their primary concerns, with little heterogeneity between high- and low-performing firms.
  • Our results speak to the need for liquidity and income support policies to ease the recovery from the pandemic, and highlight the importance of policies that can boost customer demand.
  • These include interventions to facilitate consumer’s mobility within the city and increase their spending power, as well as policies to facilitate access to inputs, such as supplier development programmes to strengthen linkages between firms, and trade reforms that can reduce tariffs on imported inputs.