Employment and Productivity of Uganda's SMEs in the Face of COVID-19

Abstract

Although COVID-19 has affected women- and male-owned enterprises differently. Across the less developed countries, evidence exists on the gendered impact of the pandemic among small- and medium-sized enterprises (SMEs) remains anecdotal. Thus, with a gender lens, the study examines the pandemic’s impact on employment and productivity and examines the gendered differences in coping mechanisms adopted between male and female SMEs. The findings reveal that overall, more than five in every ten firms reported having reduced their workers’ wages. On a gender front, a higher percentage of female-managed firms laid off more workers than male-owned firms. Regarding productivity, COVID-19 exacerbated the pre-existing gender productivity gap between female and male-owned enterprises. In this regard, while the COVID-19 pandemic led to a 32% decline in sales per worker across all SME types, women’s productivity reduced by as much as 38%, compared to 29% among males. As a result of the decline in productivity, salary cuts were higher for female-headed SMEs. In the same vein disproportionately, fewer female-managed firms were able to provide stable and reliable forms of social protection such as Social Security savings and medical insurance. Considering coping strategies, fewer female-owned enterprises are likely to adopt e-commerce and home delivery as coping mechanisms. Accordingly, the government of Uganda should invest in digital infrastructure and create more awareness about the same to close the digital divide between male- and female-owned firms.