High costs of production hampering growth of SMEs 


Stakeholders in the Micro Small and Medium-Sized Enterprise (MSME) have asked the government to consider taming the spiralling costs of doing businesses to support the growth of micro businesses in the country.

The remarks were made during the celebrations of the 5th International MSMES Day.

The day was celebrated under the theme: "Resilience and rebuilding: MSMEs for sustainable development at the forefront of building back better and stronger from the impacts of the Covid-19 pandemic, climate crisis and conflicts".

Speaking to The Nile Post shortly after the news conference held in Kampala today, Joanita Nassuna ,the programme associate women economic justice at Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) Uganda, said the cost of doing business in Uganda remains among the most expensive, not just in the region but in the continent.

"Challenges of high cost of production, this is one of the issues that has kept SMEs at micro level and being challenged with value addition. We look at the equipment that SMEs would have used to add values to their products. SMEs have challenges of having equipment that is food gradable," she said.

She noted that SMEs are also faced with the issue of standards citing a situation where Lato milk was blocked in Kenya because of its standards.

The executive director Federation of Small and Medium-sized Enterprises-Uganda (FSMES), John Walugembe said there is need to continue investing in the skilling and retooling of MSME in the country in order to address the liquidity constraints that many SMES face.

"Adaptation to green and digital futures Covid-19 is twinning with climate change to accelerate the transition into a green and digital future. Therefore, MSMEs should be supported to digitalise and to adopt green business practices," she said.

He said MSMEs need to operate in a conducive business environment, where they are not constrained by bureaucratic and cumbersome registration systems, labor laws, bankruptcy laws and tax policy.

According to Uganda's National Development Plan III, MSMEs constitute over 90 percent of the private sector and contribute approximately 2.5 million jobs and number over 1,100,000 enterprises making the sector one of the largest employers in the country.








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