In a bid to reduce the spread of the COVID-19 virus, the Government of Uganda restricted movements and suspended non-essential economic activities in March 2020. While these measures were and are still important to save lives and protect the health system, they have had a negative impact on businesses due to production and supply chain disruptions, and drastic drops in demand for goods and services.

Hairdressing salons were among the non-essential economic activities. Phillip Amure’s salon in Rhino Camp in Terego district had to close down in March 2020. He is a refugee from South Sudan and had opened his business in 2018. However, the sudden closure of his business resulted in drastic income losses and drained his capital. “I closed the salon for over four months and during this time, I used the little capital I had to look after my family,” Amure, a 34-year-old father of three explains. “By the time I could re-open, some of the creams we use in the salon had expired,” he adds.

Unlike Amure, Scovia Zako’s drug shop in the same area remained open when the country was under lockdown because it provides essential services. However, the transport restrictions made it hard for her to access drugs from Arua city to replenish the supply. In addition, the prices of drugs went up dramatically because of major disruptions in supply chains.

“The prices of drugs went up but I could not increase prices because my clients would not be able to afford them,” Zako, a Ugandan nurse explains. Amure and Zako’s testimonies were later confirmed by the Rapid Assessment on the Impact of the COVID-19 on Refugee and Host Community Livelihoods conducted by the ILO and IMPACT Initiative in September 2020, to find out how the pandemic had affected labour markets, jobs and livelihoods in refugee and host community areas. Some of the interviewees, both at the household and enterprises level, were in Rhino Camp and Nakivale Refugee Settlement and their surrounding areas.

Results of the study suggest that the lockdown affected businesses both at the operational and revenue levels. For example, respondents emphasized the challenges brought about by transportation limitations, the inability to keep hold of jobs, unstable prices of supplies and food items, and the cost of implementing Standard Operating Procedures (SOPs) to limit the spread of the virus.

To support the recovery of affected businesses, the ILO, through the PROSPECTS Programme, has launched a small business grant scheme, targeting 200 enterprises owned by refugees and host community members in Rhino Camp, West Nile, and Nakivale in Isingiro District in Western Uganda. Each of the beneficiary businesses received a cash grant of US$ 200.

The small business grants are being used to cover losses incurred during the lockdown, meet any short-term cash flow needs in order to keep their business operational and invest in marketing of products or purchase of relevant personal protective equipment (PPE) to enable the enterprise to comply with national SOPs. Additionally, the beneficiary entrepreneurs will receive business management training to help them identify new ways of working to sustain businesses and jobs.

The grants were provided through a partnership with the Federation of Small and Medium-Sized Enterprises (FSME) in Uganda, a member-based organisation with nearly 2,000 members in these districts, 67 per cent of which have reported severe distress because of the COVID-19 restrictions.