The Private Sector Foundation Uganda (PSFU) is spearheading a critical campaign to revitalise Uganda’s economic engine; the Micro, Small, and Medium Enterprises (MSMEs).
According to Ms. Sarah Kagingo, Vice Chair of the PSFU Board, the time for comprehensive policy reform is now. She argues that updating the country’s decade-old policies is not just necessary for compliance but makes “solid business sense for growth.”
“MSMEs are the undisputed backbone of the Ugandan economy: they account for 90% of the private sector, contribute 75% of the GDP, and generate over USD $2.5 million worth of jobs. Yet, their immense potential remains heavily constrained by systemic hurdles,” Ms. Kagingo said at a high-level stakeholder engagement on reviewing Uganda’s MSME policy this week.
Operational Constraints Hitting Capacity
Ms. Kagingo highlighted the formidable barriers preventing MSMEs from achieving scale and competitiveness.
These challenges, she noted, are severely impacting the manufacturing sector, and they include but aren’t limited to the following;
Underutilised Capacity
She noted that a 2023 study conducted with the Mastercard Foundation revealed a sobering statistic that Uganda’s manufacturing plants are currently operating at only 43% capacity.
She also revealed that access to affordable financing remains a significant obstacle.
Infrastructure Deficiencies
She stressed that MSMEs contend with high data costs and the persistent problem of unreliable power supply, which hinders production schedules and increases operational expenses.
Certification Delays
The other challenge she pointed out is the protracted delays in product certification, which create major bottlenecks, stifling market entry and export opportunities.
“Our MSMEs face real barriers like costly capital, unreliable power, high data costs and certification delays. We must fix these pain points,” she urged.
Leveraging Budgetary Influence to Gain Progress
Despite these systemic challenges, Ms. Kagingo emphasised that tangible progress is achievable through concerted action and collaboration between the private sector and the government.
Policy Adoption Success
She demonstrated the PSFU’s effective advocacy by having 82% of its proposals adopted into the national budget this year.
Ms. Kagingo stressed that the major and most immediate reform request remains the reduction of product certification delays, a practical change that would immediately unlock MSME potential by speeding up market access.
She concluded by emphasising that the upcoming revision of the National Standards and Quality Policy must be a comprehensive exercise that addresses the realities of the modern economy.
“The updated policy must strategically address critical gaps that MSMEs face in the 21st century, including: digital inclusion, ensuring MSMEs can leverage digital tools and e-commerce platforms and youth Entrepreneurship,” she stated.
The objective, according to Ms. Kagingo, is to move beyond abstract goals and “build policies that are practical, responsive, and empowering,” allowing the millions of Ugandans employed by MSMEs to drive the country toward its long-term development goals.