Why govt should not take KACITA’s strike lightly

The Kampala City Traders Association (KACITA) strike represents more than just a temporary disruption in business activities; it reflects deeper frustrations among traders that the government cannot afford to ignore.

KACITA, which comprises a significant portion of Uganda’s business community, wields considerable influence over the economy.

Senior economist Dr Paul Wabiga argued that the extent is not that big, given that it is largely urban and concentrated in the city.

"But it has pockets of effects that are immediate; unemployment, especially for casual labourers and service providers like transporters (talk of boda bodas), welfare effects to the urban subsistence earners as closure of shops reduces number of people moving to the city and hence reduced demand in the city's sub economy," he noted.

Makerere University senior economist Dr Wabiga said the government will also lose indirect taxes, which are usually collected from sales like VAT.

When these traders close their shops and stop transactions, the ripple effects are felt across the entire country, leading to substantial revenue losses and economic instability.

The strike signals growing discontent with government policies, particularly regarding taxation and regulatory pressures that traders find oppressive.

However, Francis Muhire, an economist at Makerere University Business School, believe the effect is a must in form of loss of revenue not only to the traders but also tax revenue to the government.

"Also loss of unemployment to the traders and their workers if the government dismisses these concerns, it risks not only prolonged economic disruption but also the erosion of trust and cooperation between the business community and state authorities," he said.

"This could lead to long-term damage to investor confidence, both domestically and internationally," he warned."

Moreover, the KACITA strike can inspire other sectors to take similar actions, amplifying the unrest and potentially leading to a wider crisis.

The government should take this strike as a serious indication of the need for dialogue and responsive policy adjustments to ensure a stable and prosperous business environment.

Addressing these issues proactively will help prevent further escalation and foster a healthier economic climate.