Bus Companies Warn of Collapse Without Government Intervention

KAMPALA, UGANDA — Salim Mulumba worked as a bus inspector until he was laid off in June 2021. Now he spends his days resting, preparing for his night shift navigating the dark city roads as a motorbike taxi driver to cover his financial needs.

While Mulumba understands his boss’s decision to lay him off, it doesn’t stop him from worrying about the possibility he may lose the roof over his family’s heads.

“We are staying in a rented house; I find it hard to pay since I don’t get as much money and I am struggling to make ends meet,” says the father of one. “Sometimes I pay half the rent and beg the landlord to be more patient with me.”

The Makindye resident borrows the motorbike, commonly known as a boda boda or piki piki, from a friend who doesn’t use it at night and joins the estimated 200,000 motorcycle taxi drivers in the capital. He worries for his safety working late at night, so he returns home by midnight, having earned about 10,000 to 20,000 Ugandan shillings ($2.72 to $5.44) — a fraction of what he earned in his previous job, which paid 800,000 shillings ($218) a month.

“Unfortunately, not much has been done yet to alleviate the situation,” Mulumba says, referring to government inaction. The bus company where he previously worked had to cut its fleet of buses in half to survive, he adds.

Uganda has one of the highest fuel prices in Africa — currently 5,005 shillings ($1.38) per liter of gasoline — which has forced bus companies to increase fares, deterring many passengers. Coupled with inflation at 10.2% at the end of 2022 compared with 2.7% at the start of the year, increasing the cost of maintaining these large vehicles, this has resulted in hundreds of layoffs at many of the city’s bus companies, which are now struggling to stay afloat. Rising fuel costs and inflation hurt all sectors of the country’s economy, but in the bus industry, employers say they’ve also had to battle higher existing taxes and the introduction of new ones not enforced on other industries. They’re now calling on the government to act quickly before the entire industry collapses.

Despite Uganda discovering oil deposits in 2006, production has yet to start, so the landlocked country relies on fuel imports mainly from the United Arab Emirates, India, Saudi Arabia, the Netherlands and neighboring Kenya, where most of its supply comes through.

Eddy Nankunda blames rising fuel prices for the loss of his job as a bus conductor after five years.

“I was able to pay school fees for my two children with my job as a bus conductor … but I have been laid off temporarily for the last three months, and I have not had a salary since,” Nankunda says.

He was surviving on his savings, he says, but now that has run out; his future is uncertain.

For the majority of the 45 million residents of Uganda without their own vehicle, buses have always provided an affordable transport option when traveling outside the capital and country. For shorter journeys around the city, passengers opt for 14-seater buses called matatus or motorcycle taxis.

Robert Kisakye, the licensing officer for the Ministry of Works and Transport, says there are 82 bus operators managing more than 700 buses with set routes in Kampala. Exactly how many people the bus industry employs is unknown, but one of the city’s main transport hubs, the Kisenyi Bus Terminal, is a base for 36 bus companies and has about 2,000 direct workers including drivers, bus conductors and inspectors, in addition to over 1,000 indirect employees such as loaders, mechanics and scouts who look for passengers, says its chairman, Saturday Muhwezi.

Umaru Ddungu, director of Swift Safaris bus company, says his company hasn’t raised fares and instead has cut its fleet from 10 buses operating daily to four.

Apophia Agiresaasi, GPJ Uganda

Higher fuel prices have forced bus companies to reduce their fleets, meaning long delays and schedule changes for passengers.

“Most of the buses you see on the road are making losses,” Ddungu says. “Most bus companies have temporarily laid off some staff due to the fuel prices.”

Now with fewer buses on the road and a reduced timetable, many passengers are struggling to make those longer journeys, and when they do, they face long delays.

Stella Uwimana relies on buses to visit family in Rwanda’s capital, Kigali. But when it was time to travel home for her grandmother’s funeral, she was surprised not only that her fare had more than doubled but also that the schedule had changed to accommodate the reduced fleet.

“I arrived late for my grandmother’s burial,” Uwimana says.

Robert Migadde Ndugwa, the vice chairperson of Parliament’s National Economy Committee, which scrutinizes government economic policies, says a number of proposals were made to the Ministry of Finance, Planning and Economic Development and the Ministry of Works and Transport to reduce inflated fuel prices. These included creating fuel reserves so traders don’t take advantage of the short period of scarcity by raising prices and hoarding fuel.

“The committee also advised that the government revives the Uganda railway so it can be used to transport fuel instead of by road to reduce the transportation costs of fuel,” says Migadde, adding that no action has been taken on any of these proposals.

Apollo Mughinda, communications officer for the Ministry of Finance, Planning and Economic Development, says there are no plans to specifically help the transport industry but that it could benefit from the relief provided across all industries such as low interest loans from the government-owned Uganda Development Bank.

Not only have high fuel prices, higher taxes and fewer customers hurt the bus industry, but a new tax was announced in 2022. Although it has not been introduced, it’s another worry for the industry. The tax, called the Park User Fee, would see a charge of 2.4 million shillings ($653) per bus each year for using the city’s bus terminals. Ddungu says he learned of the new tax in a letter from the Ministry of Works and Transport to the Uganda Bus Owners Association.

Bus terminal chairman Muhwezi, who is also a member of the Uganda Bus Owners Association, says members have met with the Ministry of Works and Transport to request the new fee be scrapped and a relief fund set up for the transportation industry, but nothing has been implemented.

The Uganda Revenue Authority, which is responsible for the collection of tax revenue, and the Kampala Capital City Authority declined requests for comment on the Park User Fee.

Ddungu says bus companies can continue to make cuts but ultimately can’t survive without government assistance. This, however, isn’t in the government’s immediate plans, says Martha Agama, public relations officer at the Ministry of Works and Transport, adding that she knows of no plans to mitigate the impact of rising fuel prices on the transport industry. Agama declined to comment on the Park User Fee.

“If the government doesn’t intervene and all those in the public transport industry park their vehicles, people will find their own means of transport,” Ddungu says. “Those in the transport industry will drop out of business, and the economy will get stuck.”

For Mulumba, help for the bus industry needs to happen quickly. He was told his layoff was temporary and hopes to get his job back when fuel prices drop to affordable levels, something he doesn’t see happening any time soon.

Apophia Agiresaasi, GPJ Uganda

One of the city’s main transport hubs, Kisenyi Bus Terminal, employs about 3,000 people. Bus companies say the industry can’t survive without government assistance.