Traders Blame URSB’s Digital Shift for Decline in Business Registration Rates

As Uganda’s formal business registration rates continue to decline, many street vendors and shop owners in downtown Kampala are blaming the shift to a fully digital registration process by the Uganda Registration Services Bureau (URSB).

While digital platforms are meant to streamline operations, some traders argue that this transition has unintentionally excluded a large portion of the population particularly those who are digitally illiterate.

Moses Bagonza, a downtown trader, believes the move has created barriers for small-scale traders who struggle with the digital platform.

According to the 2024 State of Entrepreneurship report, the URSB’s decision to fully digitize business registration is hindering many traders, particularly in the informal sector, who find it difficult to adapt.

Downtown Kampala, which serves as the epicenter of trade in Uganda, continues to be a vital engine driving the country’s economy through the wide range of merchandise and goods traded here. However, the latest report reveals concerning statistics about business registration:

The Human Health and Social Work Activities sector leads with 87% formalization,

Financial and Insurance Activities follow at 74%,

Agriculture, Forestry, and Fishing show the lowest formalization at just 18%,

Retail Trade sees only 33% of businesses registered,

Manufacturing, a crucial sector for economic development, has a relatively low 31% registration rate.

Despite the Uganda Registration Services Bureau’s push to move business registration online, traders like Bagonza continue to face challenges with the system. He notes that many find the online platforms slow, prone to errors, and difficult to navigate for those without technical expertise.

“When URSB switched to digital registration, many traders pulled back. People wanted to submit their business names to URSB and return fully formalized, but the process itself is lengthy and complicated,” Bagonza explained.

Economists point to a deeper issue: a significant lack of awareness regarding the digital registration process.

Despite government efforts to promote the new system, many traders remain uninformed about how it works or are unsure how to use it effectively.

As the future of business registration hangs in the balance, traders in downtown Kampala are calling for a more supportive, transparent, and accessible registration process—one that can encourage growth and foster inclusivity in the formal economy.