KAMPALA, Uganda — Uganda is banking on the growth of its numerous small businesses to fuel an ambitious plan to expand its economy tenfold to $500 billion by 2035, according to the Secretary to the Treasury Ramathan Ggoobi.
Ggoobi stated that while micro, small, and medium-sized enterprises dominate Uganda’s private sector, they currently struggle to evolve into larger entities with greater earning and employment potential. This challenge, outlined in the Budget Framework Paper, is a central focus of the government’s strategy for the 2025-26 financial year.
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A key component of this strategy involves reducing business informality by implementing Business Development Services and prioritizing local content in public programs. Ggoobi identified this as one of six critical areas the government will support to stimulate business growth, ultimately driving the broader economic expansion.
The government’s multi-pronged approach also includes enhancing financial inclusion, capitalizing public financial institutions, completing regional standards laboratories, and finalizing free trade zones.
Ggoobi emphasized the significant contribution of the private sector, largely composed of small enterprises, to Uganda’s development. These businesses account for roughly 90% of the private sector, over 80% of manufacturing output, and about 75% of the gross domestic product, employing more than 2.5 million people across approximately 1.1 million enterprises. However, a significant majority (93.5%) are micro-enterprises, with smaller percentages of small (4.1%) and medium-sized (2.4%) firms, many operating informally.
The Budget Framework Paper attributes these challenges to a high cost of doing business, citing expensive financing, unreliable and costly electricity, inadequate transport and logistical infrastructure, and high ICT service costs. Uganda’s business lending rates, at 18.6%, remain the highest in East Africa.
To address infrastructure challenges, Works Permanent Secretary Bageya Waiswa noted that the government, under the National Development Plan IV, will concentrate on building a seamless, safe, inclusive, and sustainable multi-modal transport system in the 2025-26 financial year. This includes reducing transport infrastructure costs, improving governance, and reducing reliance on road transport through railway and water transport development.
The government will also implement an integrated transport infrastructure program focused on maintenance, inter-modal development, and leveraging urbanization to boost productivity across all sectors.
Ggoobi underscored that facilitating the transition of small businesses into larger, more impactful enterprises is crucial to achieving the government’s ambitious goal of a $500 billion economy within the next decade.
