It’s a total lockdown countrywide, a number of business centers such as malls, arcades are closed and there is a ban on both private and public means of transport. As a result, people are not working and a number of Small and Medium Enterprises (SMEs) risk collapse, however experts say this is the time to leverage on digitalization and innovation for businesses to survive.
“Digitalisation has a lot of potential in ensuring business survival but there are gaps such as low levels of connectivity and digital literacy among the SMEs. For SMEs, I think what’s important now is to identify tools that ensure that they are in constant contact with their customers; they can use whatsapp communication, zoom platforms and other short message platforms to ensure that they receive orders and delivery goods,” said John Walugembe, the executive Director Federation of Small and Medium-sized Businesses .
According to him, the recent measures established by Gov’t to prevent spread of COVID 19 could collapse more businesses since most of them were still on the recovery path from the March 2020 lockdown.
“This lockdown will obviously affect businesses, most of them have been trying to recover and here we are. It was estimated that 2-3 million Ugandans slid back into poverty as a result of the 2020 lockdown and this time it could be worse,” said Walugembe.
‘Adapt to the changing business environment’
Prof. Augustus Nuwagaba, an economic transformation expert says businesses should adapt to changing environments such as use of digital channels such as zoom engagements with their clients as well as Microsoft teams.
He said they should also embrace new innovations such as house to house delivery of goods to their clients, citing what Café Javas is doing.
“They can also use boda bodas or delivery vans for delivery of items, SMEs should create business linkages with our business partners to ensure delivery. For example, they can embrace selling of goods using online business channels,” said Nuwagaba.
On Covid lockdown effect on business, Nuwagaba said businesses have suffered full blunt. He said the tourism sector is down, hotels closed and the prices for agricultural products have significantly dropped.
“With closure of schools, there’s no demand for agricultural products. In Isingiro, a bunch of matooke is being sold at sh2, 000. The service sector, the only one working is telecommunication; the real estate sector will also be affected by business closure since tenants will face difficulties in rent payment,” said Nuwagaba.
Collins Tugumisirize, an investment consultant says business innovations such as social engineering (where neighbors and friends plan, discuss on how to support colleague’s business) is key in ensuring business survival in this lockdown.
“They should create small pockets of atmosphere where they share ideas, and come up with real time solutions that solve people’s needs in this lockdown. One may for example invest in product delivery services,” he notes.
Survey on COVID effect on businesses, livelihoods
According to the Economic Policy Research Centre May 2020 survey, the major concerns highlighted by businesses in the event that the COVID-19 situation persists for more than six months relate to reduced product demand and potential inability to meet costs of operations.
“In particular, the majority of micro and small businesses indicate that they would exit business in 1 to 3 months in the event the current situation persists. On the other hand, the majority of the medium and large firms do not foresee closure,” reads part of the survey.
Specifically, nine out of ten businesses report experiencing an increase in operating expenses due to preventive measures instituted by the government to curb the spread of the virus.
The EPRC report projected that in the event that COVID-19 persists for the next six month, about 3.8 million workers would lose their jobs temporarily while 0.6 million would lose their employment permanently.
Business experience in lockdown
Christine Turamuhawe, who deals in cleaning services and sale of produce says with lockdown in place, the most ideal way to connect with clients is via social media and mobile phones because people are on their phones most of the time since they are home.
“With use of digital innovations and technology available, I am able to connect with clients because I don’t even need to incur transport costs to meet and talk to them. Covid lockdown has affected us because of challenges with transportation. We cannot comfortably serve all our clients because we can’t transport all the staff.”
When asked about the proposed Gov’t relief, Turamuhawe says the relief would definitely be a good idea. Some people may never be able to get back on their feet without the aid.