Browsing by Author "Tugume, Esau"

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    The impact of the COVID-19 lockdown on SMEs and employment relationships in Uganda
    (International Growth Center (IGC) Uganda, 2021) Bassi, Vittorio; Porzio, Tommaso; Sen, Ritwika; Tugume, Esau
    During 2020, governments in many developing countries introduced severe restrictions on economic activity and mobility to curb the spread of COVID-19. In Uganda, public transport and non-essential businesses were closed from early April to June 2020. These policy brief reports on the results from a phone survey of representative sample of SMEs and their workers conducted in late2020 to study how SME activity and employment relationships were impacted by a prolonged lockdown. The findings show the strict three-month lockdown resulted in significant increase in firm closures, but these closures were by and large temporary. They also uncover substantial resilience of informal labour relationships to the shock. Although most workers were let go during the lockdown and 15% of workers migrated to other locations, 76% of the furloughed employees were recalled back to work by the same employer after the lifting of the lockdown restrictions. Even though most firms reopened, and considerable shares of workers were re-hired, this has been accompanied by substantial income losses: firms are now earning 30% lower revenues and workers are earning 30% less incomes than before the lockdown. The results suggest a key role for liquidity and wage support policies to help impacted firms and workers.
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    Understanding productivity dispersion Evidence from a new survey of manufacturing firms in Uganda
    (International Growth Center (IGC) Uganda, 2019) Bassi, Vittorio; Muoio, Raffaela; Mutambi, Joshua; Porzio, Tommaso; Sen, Ritwika; Tugume, Esau
    There are large productivity differences across firms in developing countries, even within the same sector and region. Understanding what contributes to such differences in productivity is important for designing policies to help low productivity firms grow. This project implemented a representative survey of over 1,000 manufacturing firms in Uganda to quantify differences in productivity and understand what drives such differences. The key results from the survey are that: Mechanisation matters: machine usage is the primary factor associated with profitability; Small firms engage in an active firm-to-firm rental market for machines, which enables them to access high-capacity and expensive machines within semi-formal or informal clusters; and While the rental market partly relieves capital constraints, firms still report access to machines as an important challenge. As such, industrial policies facilitating mechanisation seem particularly promising. In particular, this survey suggests that policies should leverage the cooperative nature of firm networks and the existing rental market to increase mechanisation, which could include subsidising machines that can be shared by firms in the cluster.