KAMPALA – Uganda’s private sector has urged the government to maintain focus on its stated economic priorities and improve the business environment if the country is to reach its vision of a $500 billion economy.
The $500 billion translates to Shs1.803 quadrillion (or Shs1,803 trillion)
This comes in the wake of the newly approved Shs72.3 trillion national budget for the 2025/26 financial year, which includes a notable Shs1 trillion capital injection into the Uganda Development Bank (UDB) to support enterprise growth and industrialization.
While the gesture was welcomed, business leaders at a post-budget dialogue said it must be matched with bold reforms and practical support to address persistent structural challenges that threaten private sector competitiveness.
Dr Francis Mwesigye of UDB sounded the alarm on business sustainability, pointing out that 70% of new Ugandan businesses collapse within two years.
He linked the failure rate to limited financing and an over-reliance on exporting raw materials.
“Every time we export raw coffee or unprocessed produce and import finished products, we export jobs, we export value, and we lose foreign exchange stability,” he said, calling for more investment in value addition.
Hemal Shah, Director of Transaction Advisory Services at Grant Thornton, said achieving the projected 7% economic growth would require “a more aggressive approach” that includes better public finance discipline and transparency.
He praised improvements in performance-based budgeting and oversight from the Auditor General’s office as positive signs.
The private sector contributes about 80% of Uganda’s GDP, according to Julius Mukunda, Executive Director of the Civil Society Budget Advocacy Group (CSBAG).
He stressed that no meaningful economic transformation can occur without deeper engagement between government and private enterprises.
“To grow the economy tenfold, the private sector must be engaged intensively,” Mukunda said.
However, frustrations persist over the government’s role in crowding out the credit market and its slow settlement of debts. The business community is demanding the urgent clearance of Shs1.4 trillion in domestic arrears owed to suppliers, warning that delays stifle business operations and confidence.
Dr Adrian Kivumbi of Dei BioPharma called for stronger public-private partnerships, especially in priority sectors outlined in the National Development Plan IV. He cited agro-industrialization and local vaccine production as examples of areas where collaboration could spur economic growth and reduce import dependency.
“We need to be able to produce vaccines and pharmaceuticals locally to ensure affordability and accessibility,” Dr Kivumbi said.
Tax incentives also came under scrutiny. Juliet Najjinda Mutabaazi, a senior manager at PwC Uganda, noted that the government’s three-year tax holiday for new businesses often fails to achieve its purpose because most startups are still operating at a loss during that period.
“There’s a government commitment to raise domestic revenue by 60%. That puts enormous pressure on both the Uganda Revenue Authority and taxpayers,” she noted, urging a rethink of policies to balance growth and compliance.
As Uganda pursues its long-term economic aspirations, the private sector is clear: without consistent implementation, timely government payments, and a supportive tax and policy environment, the vision of a $500 billion economy will remain elusive.