Giving Compass' Take:

• Corti Paul Lakuma and Nathann Sunday recount the devastating impact of coronavirus' shutdown on Uganda's small business operations.

• How do Uganda's small business struggles reflect those of many other nations around the globe? What can we do to help prevent further economic damage to Uganda's small business operations?

• Find out where you should direct your funding to prevent further damage to vulnerable businesses around the world.

Thankfully, the incidence of COVID-19 in Uganda is very low in comparison to other countries—the country has so far recorded 260 cases, with 63 recoveries, and no COVID-19 related deaths as of this writing. Indeed, early on, Uganda adopted a number of containment measures to curb the spread of the virus, including the closure of schools, restrictions on internal and international travel, use of hand sanitizer, improved handwashing stations, social distancing, and even lockdown, among others. While these measures may have contributed to the successful reining in of the virus, those same restrictions have hit business operations hard.

A recent rapid survey of businesses by the Economic Policy Research Centre (EPRC) in Uganda reveals that three-quarters of the surveyed businesses have laid off employees due to the risks presented by COVID-19 and subsequent containment measures. Indeed, the results suggest that lockdown measures have reduced business activity by more than half. In terms of sectors, we find that businesses in agriculture have experienced the largest constraints in access to both inputs and markets for outputs due to control measures such as transport restrictions, quarantine, social distancing, and bans on weekly markets.

In short, we find that micro and small businesses experienced a larger decline in businesses activity compared to medium and large firms—an unsurprising finding since most of the country’s micro and small businesses halted operations due to their inability to implement preventative health measures such as provision of on-site lodging for employees, and sanitizers and handwashing equipment for customers. Consequently, a majority of micro and small businesses, particularly in the service sector, predict they will have to close within one to three months if the pandemic persists and current restrictions are maintained.

Read the full article about coronavirus and Uganda's small business operations by Corti Paul Lakuma and Nathann Sunday at Brookings.