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More than half of businesses cut salaries in March, April – UBOS

The public transport sector was completely shut in April

Kampala, Uganda |  THE INDEPENDENT  More than half of the businesses in Uganda cut the salaries of their employees in March and April 2020 as the country entered into tough restrictions to stem the spread of coronavirus, a survey by the Uganda Bureau of Statistics (UBOS) has said. 

According to UBOS, those that cut employees’ pay were 51.5 per cent of the businesses surveyed. Only 48.5 per cent didn’t change the size of their payroll in March and April, meaning all their employees stayed receiving their pay. Accommodation and food service, the transport and storage, the administration, and support, the manufacturing, as wells arts and entertainment were the most affected businesses.

People employed in the utility sector such as power generation and distribution, water and sewerage, public administration such as policing, defence, government agencies and civil service were least affected as the government continued paying their salaries.

“This is because they were offering essential services to support continuity of the economy,” UBOS said. The survey, whose results were published on Wednesday, reached 2,377 private businesses but just 1,182 businesses.

A lot of businesses shut all their operations in April when the government announced a complete lockdown to stop the spread of coronavirus. The majority have since started re-opening but hires have not improved to the pre-COVID-19 days, several studies have said. The cut in payroll was majorly between 26 and 50 per cent of the company’s spending on salaries. 

However, those in the accommodation and food industry cut spend on salaries for as high as 79 to 99 per cent. At least ten per cent of the companies eliminated salaries in April which mean that their employees were not paid anything.  Companies that completely stopped paying their staff were in mining and quarrying, accounting for half of the employees that never received their salaries in April.  

Transport and storage, whole and retail sector, and construction sectors followed respectively with the highest number of people that never received a salary in April. In May, an assessment by the United Nations Capital Development Fund showed that at least 100,000 formal jobs were cut as a result of the COVID-19.

The assessment also noted that at least 4.4 million workers in the informal sector will either see their earnings fall below the poverty line or dry up completely.

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