Uganda’s informal sector is the backbone of the economy, contributing over 50% of GDP and employing more than 80% of the workforce. Women form the majority of this sector, yet many continue to operate outside formal systems, limiting their growth potential and access to protections.
A new research report titled “Women, Work, and the Informal Economy in Uganda: What’s Holding Businesses Back?” FINAL-Women, Work, and the Info…, commissioned by the Global Fairness Initiative (GFI) under the Grassroots Center for Women in Work (GCWW) initiative and implemented in partnership with CEEWA-Uganda and HTS-Union, explores why women-led informal businesses struggle to transition into the formal economy.
Conducted across Kampala, Wakiso, Mbarara, and Mayuge districts, the study engaged 974 informal entrepreneurs — 93.2% of whom were women. Using both quantitative and qualitative methods, the research examined barriers to formalization, entrepreneurship skill gaps, working conditions, and women’s aspirations for the future.
Key Findings
Fear of taxation emerged as the leading barrier to formalization, with 42.7% of respondents reluctant to register their businesses due to concerns about tax burdens. Other major obstacles included unclear registration processes (29.3%), perceived lack of benefits from formalization (27%), and high registration costs (25.3%).
Women also face significant growth constraints. In peri-urban areas, limited capital (74.9%) was the most pressing challenge, alongside limited market access and high operating costs. In urban settings, high utility expenses and environmental disruptions further reduced profitability.
Entrepreneurship and capacity gaps remain widespread. Limited access to capital (70.9%), time constraints due to caregiving responsibilities (31.7%), gender discrimination (17.5%), and limited family support (18.3%) continue to restrict women’s economic advancement.
Resilience and Aspiration
Despite these challenges, women demonstrated remarkable resilience. Many rely on informal savings groups, diversify income streams, and adapt business models to survive. Their aspirations are clear: expand their enterprises, access affordable credit, secure better trading spaces, and formalize their businesses within the next three to five years.
The Way Forward
The report underscores the need for simplified formalization processes, increased awareness of registration benefits, access to affordable financing, practical business training, childcare support, and stronger legal and regulatory enforcement mechanisms.
By grounding policy reform in grassroots evidence, this study provides a roadmap for strengthening women’s worker rights and economic empowerment — ensuring that Uganda’s informal sector can transition from survival to sustainable growth.
