The effect of the Covid-19 pandemic on small and medium-sized businesses in Uganda: a case study of Kawempe Division, Kampala

Abstract

This study aimed at establishing the effect of the COVID-19 pandemic on small and medium sized businesses in Kawempe division. The specific objectives of the study were to find out the effect of COVID-19 on business revenue, to examine the effect of COVID-19 on the costs incurred by the businesses and finally to suggest post COVID recovery measures of small and medium-sized businesses in Kawempe division. This study used quantitative research design where well-structured questionnaires were used to collect primary data from respondents. A sample size of 96 businesses was used and each business was represented by its owner or manager or employee. Data was analyzed using STATA version 15.1. A paired samples t-test was used to establish whether there exists a significant change in the variables before and after the outbreak of COVID-19. The study found out that there was a significant reduction in the average monthly business revenue as well as a significant increase in average monthly business costs incurred. (p<0.05). Therefore, the study concluded that COVID-19 had a significant negative effect on small and medium sized businesses in Uganda. The study recommended that government to create a friendly business environment by provision of credit to these businesses at a lower interest rate through Bank of Uganda to help them break even. Government should also consider provision of reduced tax rates and tax credits. Businesses should also embrace technology as a major post COVID-19 recovery measure for wider market base to improve sales revenue and profitability for sustainability.