Uganda’s Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the country’s economy, accounting for 90% of the private sector, contributing 75% to GDP, and employing over 3 million people.
Despite their critical role, MSMEs face significant challenges that hinder their growth potential. To address this, the Ministry of Trade, Industries, and Cooperatives, in partnership with the Mastercard Foundation, IPSOS, Ichuli Institute, and other partners, has launched a landmark report, “The State of Entrepreneurship in Uganda 2024”.
The report provides a comprehensive assessment of Uganda’s entrepreneurial landscape, introducing the National Entrepreneurship Index (NEI), which scored 57%. This indicates a moderately healthy ecosystem that requires targeted interventions.
Speaking at the launch, Hon. Francis Mwebesa, Minister of Trade, Industry, and Cooperatives, emphasized the importance of understanding the MSME sector’s landscape, profiles, critical barriers, and growth drivers.
“Given the role MSMEs play in generating employment and enhancing GDP, it is imperative to understand the landscape, profiles, critical barriers, and growth drivers of MSMEs, particularly access to finance and the role that the private sector can play to support their growth,” he said.
Hon. Mwebesa added that the government is committed to creating an enabling environment by addressing these barriers and fostering inclusive economic growth.
“This report provides critical insights into our entrepreneurial sector’s strengths and challenges. The government is committed to creating an enabling environment by addressing these barriers and fostering inclusive economic growth. This collaborative effort demonstrates the transformative power of partnerships in building a resilient ecosystem,” he said.
Meralyn Mungereza, Head of Entrepreneurship & Enterprise Development at the Mastercard Foundation, emphasized the report’s role in shaping future entrepreneurship initiatives.
“The State of Entrepreneurship Report reflects the resilience and potential of Uganda’s entrepreneurs. By addressing barriers such as access to finance, digital transformation, and market linkages, we can collectively strengthen the ecosystem and unlock opportunities for sustainable growth,” she noted.
Dr. Margaret Kemigisa, Director of IPSOS Africa Centre for Development Research and Evaluation, explained the National Entrepreneurship Index, which scored 57%.
“The index encompasses eight critical components: human capital, formality, linkages, technology, internal processes and systems, attitudes, willingness to grow, and financial sustainability. These components collectively shape the environment in which MSMEs operate and influence their growth potential,” she said.
Dr. Kemigisa added that alongside the index, various components provide relevant information on MSME characteristics, such as sector distribution, age, gender, and size, allowing for meaningful interpretation in relation to the broader entrepreneurial landscape.
The report highlights Uganda’s entrepreneurial strengths, such as Positive Attitudes (88%), Willingness to Grow (79%), and Human Capital (78%), reflecting an ambitious and optimistic business community. However, low scores in Business Linkages (24%), Technology Adoption (35%), and Business Registration (39%) illustrate systemic hurdles.
The report also reveals persistent gaps, including financial instability, a digital divide affecting 53% of MSMEs, and demographic disparities, such as women-owned businesses scoring 56% compared to 59% for men.
The report recommends simplifying registration processes, fostering digital literacy, improving access to affordable financing, and tailoring support for underserved groups such as women, youth, and persons with disabilities.
The launch of the report marks a significant step towards addressing the challenges facing MSMEs in Uganda, and its findings are expected to inform policy decisions and interventions aimed at promoting entrepreneurship and economic growth.
