From stolen sales to diverted customer payments, business owners say employee dishonesty is eating into their profits.
But traders’ representatives warn that poor financial management and rising operating costs are equally dangerous. When Aida went on maternity leave, she expected her employees to keep her shop running while she cared for her newborn baby.
Instead, she says, they turned her absence into an opportunity to make money behind her back. The warning signs were difficult to miss. Whenever her husband visited the shop, sales were encouraging.
But on days when neither of them was present, employees routinely reported that no customers had bought anything.
“Whenever my husband would come to the shop, we would make a lot of money, but on days when none of us was at the shop, the employees would report no sales made,” she recounted in a TikTok video.
What she subsequently discovered was even more troubling. According to Aida, rather than selling merchandise already stocked in her shop, employees would wait for customers to place orders, then purchase the requested items from nearby wholesalers. They allegedly kept the proceeds while her own stock remained untouched.
“My items were just displays, but they were sourcing the items from elsewhere,” she said.
She also alleged that employees discouraged customers from paying through the shop’s official payment numbers, directing the money to their personal accounts instead. Fearing that the business would collapse in her absence, Aida decided to close it for five months.
“I had to close the business the months I was going to be away, or else it was at the risk of collapsing,” she explained.
Her experience illustrates a problem that some Ugandan business owners say is quietly undermining their livelihoods: employees diverting sales, manipulating records or exploiting employers’ absence to make money for themselves.
Such practices can be particularly damaging for small businesses operating on narrow profit margins. Money that should replenish stock, pay rent or settle suppliers’ bills disappears, leaving owners struggling to understand why their businesses are failing.
The problem has attracted attention beyond Uganda. In a BBC article the reporter cited, a Kenyan food content creator described discovering that employees had allegedly been stealing from her business.
“It never occurred to me that maybe I was getting clients and someone else was stealing from me,” she said.
Another woman, sharing her experience online, claimed an employee gradually took more than Shs 5 million from her retail shop. She said sales declined despite her efforts to keep the business operating. Eventually, mounting debts forced her to sell it.
According to her account, she later discovered that the employee and her boyfriend had planned to raise Shs 5 million each to establish their own business. The boyfriend allegedly disappeared with the money.
Although these accounts have not been independently verified, they illustrate the different forms of dishonesty that business owners fear.
WHEN THEFT GOES BEYOND CASH
Sarah Najjuki, who deals in women’s clothing, says employee dishonesty does not always involve taking money directly from the till. Some employees, she explains, secretly increase prices and pocket the difference.
“For example, an employee may charge a customer Shs 60,000 for an item that costs Shs 50,000 and pocket the extra Shs 10,000 without the owner’s knowledge,” she said.
The immediate loss is Shs 10,000, but the consequences can extend further. Customers who discover that they have been overcharged may abandon the shop, damaging its reputation and reducing future sales.
Other employees, Najjuki says, underreport the number of items sold, allowing them to retain part of the money collected. For owners who do not maintain reliable sales and stock records, such irregularities may continue unnoticed.
However, not everyone agrees that employee theft should be blamed for small business collapses. Asuman Mwanje, spokesperson for the Kampala City Traders Association (KACITA), argues that proper bookkeeping and daily supervision can prevent losses from escalating.
“There is no way employees can steal from your business for a long time without you noticing, until the business eventually collapses. That is impossible,” he argued.
Mwanje believes traders should focus more on financial management rather than blaming every business failure on dishonest workers. He also cautions against overlooking the wider economic pressures facing Ugandan businesses.
“I can’t stand in front of a camera and say that employee theft is the leading cause of business failure in this country,” he said, arguing that unfair financial policies and increasing taxes have pushed many traders out of business.
His argument raises an important distinction. Employee dishonesty can reduce revenue, but businesses also struggle with taxation, borrowing costs, poor planning and weak financial controls.
A business experiencing falling sales may therefore face several problems simultaneously, making it difficult to identify theft as the main cause without examining its records. KACITA says it has been educating traders on financial literacy, bookkeeping, and using modern technology to monitor business operations.