In Uganda, employee theft pushes small businesses towards bankruptcy
By the AFREEQUE newsroom, based on The Observer
Illustrative image · Gustavo Fring · Pexels · Licence PexelsAccording to The Observer, theft by employees, often going undetected for years, is weakening Ugandan small businesses to the point of bankruptcy. Traders in Masaka and mobile money agents report funds disappearing to the tune of several million shillings, with owners often discovering the theft only when their businesses collapse.
Ugandan small-business owners report cases of theft by employees that have driven some businesses into debt or closure, reports The Observer. A trader in Masaka says in particular that the theft of goods and takings gradually left his supermarket unable to operate. In the mobile money sector, an entrepreneur says he saw a delivery worker disappear with about 10 million Ugandan shillings.
A guest-house owner discovered that a cashier had been stealing money from him for about five years. The cashier’s replacement had collected more than 4 million shillings per night during his absence, which revealed the scale of the embezzlement, reports The Observer. The practices described also include keeping takings without receipts, overcharging suppliers, using personal mobile money accounts and selling goods belonging to employees in their employers' shops.
The lack of accounting makes such embezzlement harder to detect. A study by the Economic Policy Research Centre based on 2021 data shows that nearly half of fully informal businesses kept no records, according to The Observer. Without accounting data, owners have greater difficulty comparing takings, tracking performance and identifying anomalies.
