November 05, 2018

UK backs improving Uganda small business fortunes

Kyambadde (left) said most small  businesses in Uganda are operating informally with no sustainable growth plan.

November 1, 2018—The total British government financing package for Uganda during 2018/19 amounts to about 100 million pounds ($128 million) and a portion of that money will be targeting improving the chances of micro small and medium enterprises (MSMEs) to survive amidst a better operating environment.

British assistance is channeled through the Department of International Development (DfID) under the UKaid brand, but locally TradeMark Uganda is the key partner for many of the enabling projects aimed at small businesses.

“MSME employ over 90 pc of all working Ugandans. Also contribute 75pc of Uganda’s GDP. However these MSME are still largely challenged with most of them still operating informally with no sustainable growth plan,” Amelia Kyambadde, trade and industry minister said while opening the 9th Annual  sector Review conference during mid-week.

She was launching the National Micro Small and Medium Enterprises (MSME) Strategic Plan intended to promote the operations and growth of MSMEs.

Formulated in November 2017, the Plan will run for five years and will be implemented under the MSMEs policy that was approved by Parliament in 2016 under the theme ‘Critical mass of viable, Dynamic and Competitive MSMEs significantly contributing to social-economic development’.  The Directorate of MSMEs under the trade ministry is the main implementer.

Among other objectives, the UK government wants British tax payers money spent on helping to boost business opportunities by creating jobs and increasing investment in regional trade. ‘We will support the continued development of a stable and prosperous Uganda by delivering economic stability, higher growth, increased domestic revenues and more transparent and accountable state-society relations. This will reduce Uganda’s growing dependence on external sources of finance, and pave the way for a sustainable exit from aid’.

Moses Sabiiti, the TMEA Uganda Country Director said TMEA through the UK Aid has been working with other East African Community countries and particularly Uganda to help SMEs trade better by helping government agencies like the Uganda National Standards Bureau (UNBS) and Uganda Revenue Authority to improve their systems and enable faster and more convenient ways in service delivery to the business community.

“We have been working with UNBS to credit SMEs with quality marks so that they can enter into bigger markets and improve their competitiveness. In our second phase, we are focusing on creating trade logistic hubs on specific blocks to help SMEs improve quality of their products and access regional markets,” Sabiiti said.

MSMEs tend to employ a larger share of the vulnerable sectors of the workforce, such as women, youth, and people from poorer households. MSMEs can even sometimes be the only source of employment in rural areas.

Referring to the leading challenges facing MSMEs, Kyambadde said these include low competitiveness, unfavourable laws and regulations, low productivity, limited access to affordable financing and limited access to markets.

“I therefore believe that effective implementation of this Strategy will overcome the overarching challenges facing the sector so as to effectively contribute to sustainable social, economic and environmental development,” she said.

She said the Strategy will be implemented in partnership with the private sector and other related government ministries and agencies.

Joshua Mutambi, Commissioner in the Directorate of MSMEs at the Ministry said, “We want to help MSMEs to access affordable credit, markets and also help to link them to agencies that can help them improve their businesses like easily certifying their goods to access bigger markets.”

 

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