A shift in doing business from physical to online presented both opportunities and challenges for business women during the lockdown induced by Covid-19.
For Vaolah Amumpaire who runs Wena Hardware.com, by selling hardware items in the construction industry. It was an opportunity for her to expand her e- commerce platform to new horizons in the digital space.
Although she’s stationed in Uganda. Amumpaire has built a global network of customers in the boundless digital world. For long before Covid-19, she had banked on the diaspora community to tap into potential clients than Uganda where she resides.
However, Covid -19 has changed the whole game with Amumpaire observing a steady increase of Ugandan clients to her website from five engagements to 30 per day.
”We have been serving the diaspora market but with Covid-19, Ugandans realised and started appreciating using online transactions to conduct business,” she shares.
“Covid-19 has been positive to us because more people have resorted to online shopping as opposed to physically meeting clients. It has been positive for us as a business,” she adds.
For Amumpaire, transporting and delivering goods was too expensive due to movement restrictions .
Amumpaire is among the few women who leveraged on the opportunities presented by Covid –19. However, a fair share of women are reeling from its effects.
Covid- 19 impact
The economic impact of Covid –19 is undoubtedly significant on women businesses, yet Uganda’s Micro, Small and Medium Enterprises (MSMEs) represent a significant share of businesses run by women in Uganda.
This subject was key during the recent Eastern African Sub-Regional Support Initiative for the Advancement of Women (EASSI) regional e-conference on the impact of Covid-19 on Women’s economic empowerment in East Africa.
Mr Richard Okot Okello, the senior commercial officer, Ministry of Tourism, Trade and Industry, pointed out that due to various Covid-19 preventive measures such as curfew, lock downs among others that restricted movement of people in Uganda and across the EAC borders, women traders suffered in terms of loss of incomes and livelihoods.
According to EASSI , women businesses in Uganda are greatly concentrated in sectors such as agriculture and services such as tourism, leisure, entertainment and hospitality. These sectors are particularly fragile and experience problems like lack of access to finance in normal conditions, and during crises, they have little room for maneuver to cushion them against economic shocks.
According to the African Development Bank East Africa Economic Outlook 2020 most women in Sub Saharan Africa work in the informal economy, which constitutes 89 per cent of total employment.
For Uganda’s case, the formal sector employs only 44 per cent of women, and while the informal sector employs 48 per cent employees in informal businesses. However, females dominate the category of contributing as family workers at 60 per cent.
Majority earn from hand to mouth, working long hours in the leisure and pleasure economy such as bars, hotels, tour operators, night clubs, recreation centres among others. These businesses are not only risky to the lives of women but also characterised by casual labour provided with a daily wage and lack basic formal social protection that would provide a buffer against economic distress and increased vulnerability to shocks.
With Covid–19, many women have lost jobs and their livelihoods hang in balance. Companies especially in the private sector have laid off workers, and some have had wage and salary cuts due to slow business operations.
Mr Kenneth Apollo Bagamuhunda, the Director General of Customs and Trade, East African Community, during a panel discussion noted that women enterprises are also hard hit, presenting a dilemma to other existing challenges such as lack of access to finance, marketing information and limited access to productive resources such as land.
To drive it home, Ms Lilian Keene, the strategy and legal advisor at Platform for Labour Action, said female-dominated sectors were hit hardest by the preventive measures.
“For example, we are looking at hotels, bars, saloon, tourism and hospitality. Informal sector workers have also been affected due to lack of transport, limitation in movement and access to markets. With limitations in movement during covid lockdowns, they are already put in a position lacking access to work.
The redundancies and layoffs largely affected low level workers, majority of whom are women yet on the contrary, the male-dominated sectors comprised of essential services continued to work such as law enforcement, security, cargo drivers, construction workers, manufacturing and mining sectors to mention.
Ms Sheila Kawamara, the executive director, EASSI asked EAC partner states to avail economic stimulus packages that particularly target women in the informal sector.
Dr Juliet Wakaisuka, a lecturer at Makerere University Business School presented a paper on the impact of Covid-19 on women in Small and Medium Enterprises (SMEs) in the East African region and the mitigation strategies to aid resilience and survival of their businesses.
Dr Waikasuka notes women need to quickly adapt to new modes of doing businesss. Therefore, women’s adaptation to e-commerce and shift to the digital economy will be key moving forward.
“Covid-19 has accelerated the pace for the digital trade process which is rated very low in Africa, with Uganda and the East African region not being an exception, yet information technology has drastically changed the ways of running businesses in the world,” she says.
She suggests that supporting women in SMES to fulfill their operational and financial needs in a digitised way for improving the visibility and flexibility of transactions throughout the business cycles is very critical as digitisation is changing work relations and enhancing firm performance.
“Clearly, technology offers new solutions to develop value chains, to record transactions, to reduce time from farm to market, integrating actors such as accreditation and certification bodies,” she explains.
She says this is only achievable if governments can widen access to the Internet and build capacities for SMEs to adopt internet-based models. Women-owned SMEs need to be understood as a sub-segment of greater SMEs, and therefore develop a specific value proposition supporting women entrepreneurs.
Dr Waikasuka says women owned enterprises often lack the level of business acumen and skills to grow in a profitable and competitive manner. Most enterprises have difficulty in keeping track of their accounts, handling taxes and understanding compliance rules and regulations.
Women should also keep communicating with key stakeholders during this pandemic such as customers, suppliers, creditors, staff as well as one’s bankers about whatever key business decision they are making.
“It is similarly important that one updates their customers about delays in their orders, and wherever necessary and possible adjust customer allocations to optimise profits on near term revenue and meet contractual terms,” she notes.
To survive the economic shocks, business formalisation for women will remain key moving on into the future since informal SMEs not only succumb to corrupt practices but also miss out on the advantages accruing from economies of scale.
“Women in the EAC operate primarily in the informal sector which excludes them from services and business opportunities that are offered to formal businesses which often results in low-value trade and low survival rates for women-owned enterprises,” she says in her parting shot.