The economic effects of the covid-19 pandemic on the market vendors in Kampala city in Uganda

Abstract

Ever since the COVID-19 pandemic struck Uganda, policymakers and researchers emphasised the pandemic's health effects at the expense of the economic effects. The cardinal aim of this study was to examine the economic effects of the pandemic on the well-being of the market vendors in Kampala city. The specific objectives of this study were to examine how the COVID-19 pandemic economically affected the market vendors in Kampala and to determine if the pandemic was a demand or supply-side shock. The data was obtained through primary sources where market vendors were interviewed through a structured questionnaire captured on the ODK tool, then exported to STATA 14 for data analysis. The study employed the Blinder-Oaxaca (B-O) decomposition technique, originally used in labour economics, to decompose earnings gaps and 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 supply chain disruption. It is recommended that the government develop a framework to provide appropriate support in the form of income support, access to low credit, and the building of the digital capacity of market vendors to help manage the adverse effects of pandemics in future