Kampala being the heart and capital city of Uganda, attracts multitudes including city hustlers, traders, customers, and traders with most of the businesses operating from city arcades, malls, and other business centres around the city not to mention the roadside vendors.
Kampala CBD is the busiest trading zone with the majority of the traders dealing in clothing, food and beverages, electronics, construction hardware materials, pharmaceuticals, small and medium industries etc.
These have to tussle and hustle, wake up earlier before birds to figure out a living. Unlike Asians, over 80 per cent of traders operating in the city arcades reside away from the city centre in the nearby suburbs of Kawempe, Nakawa, Kasubi, Nakulabye, Nateete, Bwaise, Nsambya while others stay 10-40km away, especially those who either have personal transport means or residential houses. The daily transport costs are another nightmare!!
The unprecedented occurrence of Covid-19 pandemic did not only affect the health of Ugandans, but also largely hit the business sector, especially in cities and towns. To curb the spread of the pandemic, the government restricted free movements, instituted curfews, and total closure of 'non-essential' businesses in Kampala for nearly two years.
Within this period, many city traders were crying for accumulated bank loans whose interest rates almost doubled in the name of non-compliance amidst the lockdowns. Besides, some of the merchandise had expired, depreciated, and lost marketability yet arcade landlords and managers continued demanding for rental fees except a few who voluntarily gave rent waivers to their tenants.
With the prolonged government directive of instituting the lockdown, traders were forced to remove their merchandise from their shops in fear of accumulating rental costs and registering worsening losses caused by accelerated worn outs. This forced traders to begin transacting online via Facebook and Whatsapp and door to door using motorcycles and vehicles to enable them survive in the lockdown.
Unfortunately, Facebook itself was also banned in Uganda largely due to political motives of deterring propaganda. Upon opening up the economy, the majority of these traders could not make a comeback to the city as the largest proportion of their capital had been consumed to enable them to survive during the lockdown. Those who managed to reinstate their businesses in the arcades are still struggling to date.
Currently, most arcades in Kampala are increasingly becoming empty, with traders choosing to operate in the nearby suburbs where operational costs like rent, electricity, meals and transport costs are low. Others have resorted to online selling as a way of dodging rental costs via social media platforms like Facebook, digital selling applications like Jumia, Glovo etc, as a pivotal platform where sellers and buyers can interact to transact businesses.
Most of the policies advanced by the government to help traders seem to be more political than economically support traders. Policies to relocate street vendors from the city affected many traders in the arcades since vendors used to sell merchandise on behalf of shop owners on a commission-based mutual arrangement. Hence their relocation left a financial gap that shop owners could not sustain.
With the current economic crisis characterized by hiking fuel and commodity prices, the cost of living today has more than doubled if not tripled yet sales among traders have steadily declined.
Previously, public transport means were charging Shs 1,500 from Gayaza to Kampala. Currently a litre of petrol costs over Shs 6,450 forcing transport fares to more than double to a tune of Shs 3,500 (Gayaza-Kampala) making a daily Shs 7,000 and Shs 210,000 per month excluding rent and feeding. All these have made it practically impossible for city traders to continue operating in city arcades.
Many arcade owners have increased rental fees by 30 per cent, charge toilet fees, an extra 10% for late payment of rent dues, Umeme electricity charges, etc. Imagine most of those arcades charge a unit of Yaka at Shs 1300 yet the standard rate is at Shs 749.5 per unit on average. All these are costs that hinder traders to continue operating in the arcades.
What should Uganda's policy makers do?
- The ministry of Finance together with the ministry of ICT should lower internet data costs from 12 per cent to 0 per cent to enable traders to participate in digital technology through selling commodities online via digital platforms at a relatively cheap price to support the survival mode of traders who cannot afford rent.
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- KACITA and other traders' associations should dialogue with arcade owners/landlords on the rental fees to reduce heavy rental charges, and abrupt increments, and agree on a single currency in which tenants must pay their rent dues.
- Planned relocation of street vendors should be done before policies are implemented. This should be complemented with traders' participation in the planning. Most of these vendors have minimal capital to enable them to rent a whole shop thus there is a need to design a relocation plan before policies are implemented.
- Umeme should monitor and enforce a uniform fee per unit of electricity to reduce exploitation and overcharging of tenants by arcade landlords.
- The government should reduce property taxes charged from arcade owners (Landlord), to encourage them to lower rental fees as a way of minimizing operational costs and ability to remain in business.
The authors are directors and researchers at Gateway Research Centre, Uganda
