EU, PSFU tip Ugandan small businesses on competing at global marketplace

Ms Caroline Adriaensen, the Head of Cooperation EU Delegation in Uganda

Ms Caroline Adriaensen, the Head of Cooperation EU Delegation in Uganda

KAMPALA – The Sustainable Business for Uganda Platform (SB4U) in conjunction with European Union (EU) conducted a Private-Public Sector Dialogue to empower Ugandan Micro, Small, and Medium-Sized Enterprises (MSMEs) to participate and win in the domestic, regional, and global marketplace.

Export readiness, trade promotion, and facilitation, product and market development, and entrepreneurship development in Uganda were among the topics discussed in the workshop that went down at the Golf Course Hotel Kampala.

While giving the keynote speech, Ms. Angela Bagaine, the director SMEs at the Private Sector Foundation Uganda (PSFU) said that the communities do not trust businesses within their communities which hinders MSME development.

“We look at businesses and judge them from our perception. We don’t trust as a community and therefore our businesses remain enshrined in a small closed pocket.”

Ms. Bagaine further explained that SMEs have a problem of not having a market rate for staffing, making it a negotiation commodity.

“The number of employees is important but the caliber of employees in the MSME world is very important.” She said.

She again singled out a problem of SMEs not investing sufficiently and not having records for their businesses which makes it hard for them to weigh themselves. “Most of the SMEs have not invested efficiently to make their businesses stand out in the crowd. For many of us, measuring ourselves is hard because we don’t have the records in place making it hard to measure our success.” She further explained.

In her observation, the PSFU representative said because of many issues, the MSMEs have not yet mastered what an enterprise should be. She encouraged them to learn and categorize their enterprise and see where they fit.

On her part, Ms Caroline Adriaensen, the Head of Cooperation EU Delegation in Uganda said that today is a visible sign of the appreciation of the role of MSMEs in Uganda and bowed to explore opportunity solutions for enhanced development and growth.

“MSMEs are strategic for the absorption of up to 700,000 young people every year in Uganda.” She said.

Ms. Adriaensen added that European Union has created a sustainable business platform for Uganda.

“As you can see here, the objective of the SB4U platform which is co-chaired by the European Union and private sector foundation Uganda is to facilitate the dialogue between the public sector and private sector and private sector from Uganda and private sector, from Europe around anything to do with the business environment and investment.” EU representative said.

In a bid to curb challenges faced by MSMEs in Uganda, like limited access to finance issues with the matching of skills supply and demand, regulatory framework, or low level of digitalization, Ms. Adriaensen revealed that European Union is launching a new program that will be rolled out the beginning of next year on trade facilitation and trade promotion which will provide facilities like access to affordable finance from the small enterprises to the bigger ones through a whole range of opportunities associated with business development.

She encouraged them to get involved and also take advantage of all the opportunities that are being offered on the platform.

“Take part in the conversations that are being facilitated, and take part in the working group so that your voices are heard. You can express the challenges that you’re facing you can contribute to the solution and be part of the solution and also look at all the opportunities that are being provided by the programs that we have approved and that we’re rolling out over the coming months,” Adrieansen Encouraged MSMEs.

Speaking to journalists, Federation of SMEs Executive Director, John Walugembe noted that if we’re to grow our economy and our GDP and tax base we need to focus on the SMEs.

“If you’re saying you want to grow our tax base, we are basically saying we want to bring more people into the tax bracket and who are you bringing, who are the majority? The SMEs. So that’s why we need to focus there going forward.

I want to see more targeted intervention seek to develop and grow SMEs” he said.

Mr. Walugembe added that SMEs need more financial support and what the SB4U platform is addressing right now.

“If I invest in my business and then I cannot find affordable financing on the market, this means my business will either stagnate or close. So these are the bottlenecks that the SB4U platforms are trying to address, the key bottlenecks that stop the growth of the private sector, that deal with skilling, that deal with digitalization that deals with access to finance and access to market standards and SPS.” SME executive director said.

He further explained that their goal is to ensure that they create a cross-fertilization of knowledge that is able to drive the growth of SMEs in Uganda that’s why they invited representatives from banks, representatives from businesses, representatives from government institutions, and representatives from academia.

SB4U is a platform that seeks to promote key partnerships between the Ugandan and European public and private sectors were launched by the European Union (EU) and the Private Sector Foundation Uganda (PSFU) in March 2020 at the first-ever Uganda-Europe Business Forum held in Kampala.

Uganda has a vibrant private sector with over 1.1m MSMEs across all sectors of the economy, of which 94% are micro-enterprises, 4% small enterprises, and 2% medium enterprises. According to UNCTAD, MSMEs account for 80% of the country’s GDP and 90% of its private sector. However, over 70% of Ugandan MSMEs operate in the informal sector and are owned and operated by women and youth entrepreneurs. MSMEs cater primarily to the domestic market with some doing business with the East African Community (EAC).

The entry in force of the African Continental Free Trade Area (AfCFTA) has opened up new avenues for doing business within the Continent.

As such it is important to build the export readiness of local MSMEs to play and win at the continental level. Hence, the initiative of SB4U to support the internationalization of MSMEs to sustainably integrate the regional and global marketplace.

To Top