The The Economic Effects of COVID-19 Pandemic on the Market Vendors in Kampala City in Uganda

Abstract

Ever since the COVID-19 pandemic struck Uganda, much emphasis by the policy makers and researchers were on the health effects of the pandemic at the expense of the economic effects hence creating a research gap. The cardinal aim of this study was to examine the economic effects of the pandemic on the wellbeing of the market vendors in Kampala city. The specific objectives of this study were; examining how the COVID-19 pandemic economically affected the market vendors in Kampala city, and determining if the pandemic was a demand or supply side shock. The study employed the Blinder-Oaxaca (B-O) decomposition technique, which was originally used in labor economics to decompose earnings gaps and to estimate the level of discrimination. This decomposition method analyses changes in a given variable over time. Descriptive statistics such as means, frequencies, and percentages were generated to gain insights into the data.  Consumption and Sales were used as proxies for demand whereas the proxy for supply was production. The decomposition results from the Oaxaca estimates show that consumption, sales, and production reduced after the introduction of the COVID-19 restriction. The pandemic affected the market vendors economically through reduced consumption, sales, and disruption of the supply chain. It is recommended that the government provide appropriate support in form of income support, access to low credit and building the digital capacity of market vendors. This study contributes to the understanding of the economic effects of the pandemic on vulnerable groups-the market vendors.