Storage constraints and resistance to shocks. Lessons from small-scale entrepreneur focus groups in Kampala

Romaine Loubes and David Margolis ()
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Romaine Loubes: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
David Margolis: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris

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Abstract: In Sub-Saharan African countries, over half of micro and informal firms report suffering from storage issues (WBES). In Uganda, key policy priorities highlight significant post-harvest losses due to inadequate storage in the agricultural sector and a persistently small size of firms (National Development Plan III). Handling fluctuations in demand and supply is crucial ;for firm resilience and growth. However, in urban areas, various constraints, including ;storage, limit firms' ability to manage these variations. There exists very little concrete ;evidence on the prevalence of storage constraints for small-scale entrepreneurs, their consequences on how firms deal with shocks and their adaptation strategies. We present results from three focus groups in the retail, manufacturing and wholesale/processing sectors and five high-level meetings held in Kampala, Uganda with,the goal of better understanding the extent and nature of storage constraints across space,and sectors, orienting future data collection efforts and identifying factors that could make,policy interventions less effective. Our results are fourfold: I) Storage issues are universal and multidimensional, leading to issues managing input and output price fluctuations, stunted growth, and higher exposure to risk. II) As entrepreneurs often adapt to storage constraints by collaborating with competitors or adjusting their operations, they may not recognize lost demand or inefficiencies as storage-related issues, leading to potential mismeasurement of the extent of the problem. III) Storage constraints are not credit or cash constraints: simply providing capital is unlikely to solve these problems, as existing storage often fails to meet product-,specific needs (such as temperature control or security), and infrastructure gaps likenlack of electricity further limit storage solutions. Trust issues, liquidity constraints, and risk (e.g., fire or contamination) also hinder the adoption of collective or individual storage. IV) Cost-efficient and consensual policies exist: successful examples of effective,policies that address these multifaceted barriers can be found in government-coordinated storage for coffee. Potential interventions tailored to specific sectors have been suggested by focus group participants and governmental actors alike. Storage constraints are ubiquitous among small-scale entrepreneurs in Kampala, Uganda,,and these constraints limit the ability of entrepreneurs to manage shocks and grow. However, policies to address these constraints will need to be attentive to the capital constraints, trust issues and product-specific characteristics of their intended users in order to be effective.

Date: 2025-09
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-05726425v1
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Published in International Growth Centre. 2025, pp.16

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