The Ministry of Trade, Industry, and Cooperatives, in partnership with the Mastercard Foundation, Ichuli Institute, IPSOS and other stakeholders, has launched the State of Entrepreneurship in Uganda 2024, a comprehensive report assessing the country’s entrepreneurial landscape.
According to the report, micro, small, and medium enterprises (MSMEs) account for a staggering 90% of Uganda’s private sector, contribute 75% to GDP, and provide employment to over three million people.
Despite their vital role in economic growth, MSMEs continue to grapple with systemic challenges that hinder their expansion.
The State of Entrepreneurship Report highlights several key barriers affecting MSMEs, including limited access to finance, lack of digital transformation, weak market linkages, and informality in business operations.
These challenges stifle the potential of small businesses to scale up and contribute more significantly to Uganda’s economy.
The Minister of Trade, Industry, and Cooperatives, Francis Mwebesa, emphasized the need for a deeper understanding of the MSME ecosystem to drive meaningful interventions.
“Given the role MSMEs in Uganda play in generating employment and enhancing GDP, it is imperative to understand the landscape, profiles, critical barriers, and growth drivers of MSMEs, particularly access to finance and the role that the private sector can play to support their growth.”
The report underscores the urgent need for financial inclusion to support MSMEs, as many struggle to access credit due to stringent lending conditions and a lack of collateral.
Additionally, digital transformation remains a challenge, with many enterprises lacking the necessary skills and resources to adopt digital tools that enhance efficiency and market reach.
Meralyn Mungereza, Head of Entrepreneurship & Enterprise Development at Mastercard Foundation Uganda, stressed the importance of tackling these challenges to unlock new opportunities for growth.
“The State of Entrepreneurship Report reflects the resilience and potential of Uganda’s entrepreneurs. By addressing barriers such as access to finance, digital transformation, and market linkages, we can collectively strengthen the ecosystem and unlock opportunities for sustainable growth.”
The National Entrepreneurship Index, as highlighted in the report, scored 57%, indicating a moderately healthy entrepreneurial ecosystem.
Dr. Margaret Kemigisa, Director of IPSOS Africa Centre for Development Research and Evaluation, elaborated on the eight key components that shape Uganda’s entrepreneurship environment:
“The index encompasses human capital, formality, linkages, technology, internal processes and systems, attitudes, willingness to grow, and financial sustainability.
These components collectively shape the environment in which MSMEs operate and influence their growth potential.”
The government has placed MSME development at the center of Uganda’s economic transformation agenda through policies such as Uganda Vision 2040, the National Development Plans (NDP III & IV), the National Trade Policy, and the MSME Policy.
Mwebesa reaffirmed the government’s commitment to strengthening the private sector, stating:
“Uganda Vision 2040, the Third and Fourth National Development Plans (NDP IV), the NRM Manifesto, the National Trade Policy, the National Industrial Policy, and the MSMEs Policy collectively emphasize the critical role of the private sector in driving Uganda’s economic growth and transformation.”
The State of Entrepreneurship in Uganda 2024 presents a call to action for policymakers, financial institutions, and private sector players to support MSMEs through access to credit, digital transformation, and market integration.
Strengthening these areas will ensure that Uganda’s MSME sector continues to thrive, driving sustainable economic development and job creation.