Business

Banned but Booming: Mobile Businesses Flourish in Kampala, Despite Being Illegal

 

Article Highlights

 
Godfrey Lubuuka (in green and yellow pants) sells fruits from his truck, along with his colleague Nasur Buyinza. Lubuuka says that he has more than doubled his sales by moving from place to place to do business, instead of renting a storefront. Apophia Agiresaasi, GPJ Uganda
Uganda

High rents and high taxes present major barriers to operating a store in Kampala, especially in the city center, so more and more enterprises are making their businesses mobile. Even as the practice booms, there’s still one lingering problem: It’s illegal.

KAMPALA, UGANDA — On a vehicle loaded with fruit, a public-address system booms out a roster of fresh produce for sale: “Water mellon, nanasi tutuuse, water mellon nanasi.”

The announcement in Luganda, a local language here, declares the arrival of watermelon and pineapples in Nansana, a suburb of Kampala, Uganda’s capital. Godfrey Lubuuka, the truck’s driver, has been selling fruit from his truck for six years.

He used to sell fruit from a stall in a village market, but he realized he’d sell more if he took his business on the road.

“We used to have many customers, but when we move around, we certainly make more money,” says Lubuuka, whose name means “jumping around” in Luganda.

“When we were in one place, we used to make about 300,000 [Ugandan] shillings ($79) per day, but now, on a good day, we make about 600,000 to 700,000 shillings ($158-$185) daily,” he says.

Lubuuka and his colleague Nasur Buyinza record messages about available fruit for their P.A. system, so customers know they’ve arrived and know what they’re selling that the day.

Despite the increased revenue, a mobile fruit business presents a few challenges.

“Other people selling the same products also move around in vehicles and tap some of our customers,” he says, pointing to another truck selling watermelon nearby.

The other primary challenge, he admits, is that this business is illegal.

Robert Kalumba, deputy public relations officer for the Kampala Capital City Authority (KCCA), confirms that mobile businesses are illegal. Despite KCCA vehicles patrolling the streets, he says, the number of mobile business vendors seems to be increasing somehow.

Even when vendors are arrested and charged in court, they go right back to the streets to continue their businesses, he says.

Despite the risks and challenges, Lubuuka’s business and others like it often have higher profit margins, partly because mobile businesses avoid traditional costs such as rent and taxes.

We used to have many customers, but when we move around, we certainly make more money.

A traditional business must pay both the KCCA and the Uganda Revenue Authority. Mobile businesses pay neither.

“It’s lucrative,” Lubuuka says. “So it’s worth the risk.”

Isa Sekito, spokesperson for the Kampala City Traders Association, says that about 30 percent of businesses in Uganda fail because of high taxes from the Uganda Revenue Authority.

Another 60 percent of businesses go under because of high rents, he says, especially in the city’s Central Business District.

Sekito says he’s suffered these high rents himself. He used to pay $3,900 per month to rent a shop on Market Street in Kampala’s city center.

“That is too much. If I had a chance to become a mobile vendor, I would,” he says.

And many people are. Even larger manufacturers are taking part in the boom in mobile business.

“Even large-scale manufacturers have mobile vehicles with their brand names. They even deliver from house to house,” Sekito says, adding that they often pay bribes to keep the untaxed portions of their businesses going.

Bribes are a common part of life for mobile businesses here, says Joseph Kamya.

Kamya, a mobile vendor, says that when KCCA officials find him, he pays them a small bribe, and they let him continue doing his business.

Kalumba of the KCCA says he isn’t aware of such a practice but does not rule out the possibility that KCCA staff accept bribes from vendors.

“Businesses in Uganda is choking because of overhead costs and loans,” says Charles Ocici, executive director of the small business advocacy group Enterprise Uganda.

Ocici says smaller businesses are forced to go mobile because they can’t afford rent in particular locations.

“They can’t afford even lower-rent facilities, even if they have very high-quality products,” Ocici says.

The biggest downside is the fear of being caught, Kamya says.

“We are there by the grace of God. We just pray we don’t get caught.”

Apophia Agiresaasi, Global Press Journal, translated some interviews from Luganda.