Private Sector Development

Uganda’s private sector comprises over 1,100,000 enterprises which employ approximately 2.5 million people, an equivalent of 90 percent of total non-farm private sector workers. The private sector contributes approximately 80 percent of GDP. Uganda is one of the most enterprising countries in the world, ranking number one in 2016. However Uganda’s private sector continues to be dominated by Micro enterprises (93.5%), Small enterprises (4.1%) and Medium enterprises (2.4%). The enterprise mortality rate also remains high with majority of enterprises either collapsing within the first three years or remaining small and informal over their lifetime.

Government’s Private Sector Development (PSD) agenda aims to reduce the informal sector, increase factor productivity, and improve the business environment to lower the cost of doing business and improve the investment climate. Furthermore Government is cognizant of the low competitiveness and technological index of Uganda exports due to insufficient investment in Science, Technology, Engineering and Innovation (STEI). To that end, Government is prioritising investments in sustainable energy and ICT to drive the industrialisation agenda and improve internet connectivity to support business growth.

In support of its PSD agenda, Government is strengthening the policy, regulatory and institutional framework. A five year National Strategy for Private Sector Development (NSPSD) was launched in 2017 to increase the competitiveness of the private sector and enhance its contribution to economic development. Other key policies that facilitate private sector development include National Industrial Policy (NIP) 2008; National Trade Policy (NTP), 2007; Oil and Gas and Investment Policy, 2008; Micro, Small and Medium Enterprises (MSMEs) policy 2015; National Land Policy; Education Policy; Employment Policy; Buy Uganda, Build Uganda (BUBU) Policy and the Investment Code Act 2019, among others. 

To facilitate industrial and export development, Government has identified 22 industrial and business parks for development, five of which are at reasonable stages of development namely: Kampala Industrial and Business Park (KIBP) - Namanve, Luzira Industrial and Business Park, Bweyogerere Industrial and Business Park, Jinja Industrial and Business Park, and Mbarara SME Park.

Factoids

  1. Uganda’s balance of payments deficit as a percentage of GDP increased from 7.09% in FY 17/18 to 11.55 % in FY 18/19.
  2. Domestic revenue as a percentage of GDP increased from 14.4 percent in FY17/18 to 15.2 percent in FY 18/19.
  3. Uganda improved its ease of doing business ranking from 127 in 2018 to 116 in 2019
  4. Uganda is currently the 115th most competitive nation in the world out of 140 countries ranked in 2018 from 117th in 2017.