Uganda: Women Exporters Need Special Stimulus Package

For the last 30 years, Ann Mayanja has cemented her position in the coffee world. Through her company Coffee World Limited, she later ventured into exporting coffee. From farming, processing, trading and up to the export level, she has seen it all in the coffee value chain.

Her stamp on coffee is also felt across the borders with key contacts in the European Union market in countries such as Spain and Italy.

However, no economic catastrophe had ever tested Mayanja's 30 year-experience in coffee like the Covid-19 pandemic.

Before the pandemic set in, a shipment of 960 bags could be made to European markets in space of a week. She remains tight lipped on the revenues, but insists it was good business.

This is no more after the pandemic hit her key export markets in Spain and Italy.

Back home, the Covid-19 restrictions heavily affected Mayanja, especially with closure of the border. This left her in a catch- 22 situation. First, the imports went down and this created scarcity of containers making business dormant for her.

Whereas a lot of coffee had been made redundant in stores, banks remained at the door steps since part of her working capital was a loan.

With a normalcy returning slowly, Mayanja has diversified into farming. But the effects remain deeply etched with hopes of recovery taking longer.

A similar experience is being felt by Nakato, who prefers keeping a condition of anonymity.

Before Covid-19, Nakato raked in Shs20 million net profits in a good season. Nakato runs a small medium agribusiness farm enterprise which sits on 19 acres in Mityana district. The farm deals in hot pepper, green pepper, okra, and African white eggs.

Her business serves both the domestic and global market. , However, she realised the export market is more lucrative.

Before Covid- 19 set in, she was required to supply more than 1,200 kilos of her produce for export in European markets. Sometimes, she would fall short of supply.

On many occasions, she says payments were made in time, giving her additional cash to continue with operational expenditures on her farm.

However, at the outbreak of Covid -19, supply chains were disrupted with closure of borders and other restrictions.

The lockdown that started in March 2020 made farms inaccessible, leaving most harvests to go to waste.

At the beginning of the lockdown, Nakato thought it was short lived and normal operations would resume. But that did not happen. more of her harvest started getting wasted.

To mitigate this effect, she gave out part of her produce to neighbours for free consumption.

However, with continued lockdown, the trickle down economic effects were devastating with less orders from abroad mainly in the vast European Union market.

The partial lifting of the lockdown saw Nakato resume exports in August. However, business has never been the same.


She describes receiving payments as 'painful' for her supplies which are sometimes irregular. Orders for her produce are not streamlined, yet she makes harvests every week.

"Our importers from European markets are taking in less stock and the payments are not coming through. The domestic market cannot absorb my stock. I'm counting losses everyday," she says.

Whereas the Uganda Development Bank (UDB) set up a stimulus package for most businesses to absorb the economic shocks from the pandemic, Nakato says the current interest rates at 12 per cent are over bearing, making the loans more expensive.

To keep business going, Nakato had to cut costs by downsizing workers. She also obtained a salary loan that she's using to continue with production at a minimal cost and serve the export market.

Her lesson from the pandemic is that government has failed to protect farmers from the shocks of the economy.

Mitigating the impact

Whereas the above experiences may not represent a sample size of the situation at hand, it still provides an inner understanding of how the situation is panning out.

Uganda leads Africa in countries that have a high number of women-owned enterprises at 38 per cent as a percentage of total business owners despite poor entrepreneurial supporting factors, according to Mastercard Index of Women Entrepreneurs (Miwe) 2019.

However, another recent survey findings from TradeMark East Africa reveals that 64 per cent of most women owned enterprises in cross-border trade engage in agricultural products.

Many women in cross border trade also reported a 97 per cent decline in weekly profits which led to closure of their businesses.

Manuel Reyes-Retana, Regional Industry Director, Middle East and Africa at IFC in his foreword in a recent report writes that in emerging economies, small businesses--especially those owned or led by women--are critical to growth, employment, and development.

These businesses face financial and operational difficulties in good economic times, and the Covid-19 crisis has only amplified the challenges they must contend with on a daily basis.

African women face a $42 billion financing gap, according to the African Development Bank. This is largely tied to a lack of access to collateral in the form of land and property as well as to knowledge, mentorship, and networks to grow their businesses, which are typically in the informal sector.

Highlighting the findings of the IFC study on the impact of Covid-19 and women-led MSMEs in Sub-Saharan Africa in 13 countries including Uganda, Manuel says, "We found that over a quarter of all of women led businesses were unable to continue operating during the crisis. Over half needed to adapt their business models to continue operations, and almost 90 per cent faced revenue losses."

"When gender is overlaid on the data collected, we see that women-led small businesses have experienced worse impacts than those led by men, largely due to their smaller size and higher concentration in heavily affected sectors," he says.

Manuel highlights that women-led enterprises faced increased difficulties in securing new orders and inputs. This was more prevalent in agriculture, trade, hospitality, information technology, and construction sectors.

To revitalise women's businesses in cross border trade, TradeMark East Africa says there should be Covid-19 cushioning measures.

These should target women traders in form of soft loans, grants, extended loan repayment periods, loan interest waivers to ease their operation costs and boost the chances of their business survival.

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