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On February 5, 2026, the minister for Kampala Capital City and Metropolitan Affairs, Minsa Kabanda, issued a directive ordering vendors and hawkers to vacate the streets of Kampala.
KCCA has since launched intensified crackdowns on the streets, a move that has prompted similar enforcement actions across Uganda. The directive seeks to restore trade order, improve sanitation, and ease congestion as a broader vision to transform Kampala into a “smart city.”
Scenes of eviction, confiscated merchandise, arrests, and running battles have become common, triggering debate on social and mainstream media whether such action is necessary, particularly for citizens struggling to earn livelihoods.
Irresponsible governments often frame informal trading as a public nuisance rather than an economic condition, yet when it pervades other developing economies in sub- Saharan Africa, Asia, and Latin America, then there is something terribly wrong about those economies.
Governments frequently regard informal trading as illegal economic activities operating outside regulatory and taxation frameworks – and as a violation of urban planning standards. It is this framing that underpins arguments that informal trading causes congestion, environmental degradation, and petty crimes – and that to deal with it, using brute force is necessary.
While governments continue to live in denial, informal trading is one of the most widely studied phenomena. Scholarly literature confides that informal trading is a legitimate economic condition sustaining livelihoods, equally for individuals who, despite being adequately qualified, are unable to secure formal employment.
In this regard, informal trading is understood broadly to encompass vendors and hawkers dealing in a wide range of merchandise, including food, clothing, housewares, groceries, agricultural inputs, and automobile parts.
It also includes other categories such as urban transport providers – commuter taxis and boda boda operators – waste pickers, small-scale manufacturers, construction workers, and casual labourers.
While governments often pass blame to reluctance by entrepreneurs to formalise, a wide body of scholarly work locates the persistence of informal trading within state structures and policy choices.
Graeme Young, in his study of informal trade in Kampala, argues that Uganda government has been highly responsible for creating, sustaining, and shaping informality through weak governance, economic liberalisation policies, poorly structured tax systems, and self-interested practices by authorities seeking to benefit from the sector’s continued existence.
From this perspective, economic liberalisation bears the most blame for slow industrialisation and limited capacity to absorb surplus labour. The adoption of structural adjustment policies during President Museveni’s early years, has been widely debated, which scholars such as Mahmood Mamdani describe as one of Uganda’s slow poisons in its economic trajectory.
NRM credits SAPs for enhancing government efficiency and stimulating private–driven growth, but over time, their outcomes remain widely undesirable. Privatising formerly state-owned enterprises is associated with entrenched corruption and unequal access to economic opportunities.
Similarly, public sector retrenchment aimed at reducing the government wage bill displaced many civil servants, pushing them into precarious livelihoods, the effects of which remain visible in the streets and alleyways of urban centres today.
Another key policy failure relates to taxation, in which government mandates anyone operating a business to acquire a Tax Identification Number to broaden its tax base. But within a regressive tax framework, taxation raises costs while also diminishing benefits of formalising.
While informality is not driven solely by high taxes, weak public service delivery has provided little incentive for compliance. Many Ugandans prefer to operate informally to avoid paying taxes widely perceived as benefiting corrupt officials more than advancing the public good.
Importantly, informal trading is not solely a survival strategy of the poor. Its dynamics become more complex when formally registered wealthier actors engage in it. Street vendors and hawkers are usually engaged to distribute products – often under the guise of job creation – but the practice carries troubling vices.
Out of this practice, formal labour obligations, direct employment costs, and tax liabilities are evaded, as well as abetting counterfeiting for enrichment. This arrangement is what places those in authority at the centre of informal trading.
During President Amin’s time, black markets thrived under magendo economic situations, with those at the helm benefitting enormously. Amin often complained, while also threatening to apprehend government officials who absconded from duty to engage in magendo in Kawempe.
Today, informal trading takes on a new twist, as an avenue for illicit economic activities and, in many instances, a political feature. The phenomenon has created lucrative opportunities for some in positions of authority.
A significant number of commuter taxis and boda boda are reportedly owned by politically-connected actors, which is why selective enforcement is often observed within the sector. Periodically, when vendors and hawkers are pushed off the streets, the response from different political quarters is predictable.
Political leaders jostle over as defenders of the urban poor. Lord Mayor, Erias Lukwago, has repeatedly appealed to informal traders by presenting himself as a champion of muntu wa wansi.
The central government’s professed concern for the downtrodden reflects a broader plan to reorder its political base in urban spaces. Over time, the creation of Ministry of Kampala Capital City and Metropolitan Affairs and KCCA Executive Directorate has sought to reclaim Kampala from opposition control, but has caused more problems than it has solved them.
For example, initiatives to relocate traders to government-built markets under seemingly supportive policies face implementation challenges, thus limiting their effectiveness. Vendors continue to resist these markets for their low customer traffic, corruption in allocations, design limitations for those engaging beyond groceries, and operational costs.
While these factors present significant bottlenecks, there has always remained informal traders who appear to benefit from varying degrees of political protection even when spaces they occupy are illegal.
Ultimately, informal trading remains a structural economic reality calling for a deeper engagement with its underlying causes rather than a narrow focus on enforcement. When you hear policymakers argue that to eat an omelette, an egg must be broken, caution should be lent to informal traders as chickens who lay the eggs for our omelette in the future.
The writer is a development consultant.
