Many government regulations are hindering the growth of small businesses, according to Prof. Wasswa Balunywa – the Principal of Makerere University Business School (MUBS).
While speaking to SME owners at Onomo Hotel during a forum commemorating World Medium, Small and Micro Enterprises (MSMEs) day, which is celebrated every 27th of June, Balunywa said, “There is too much regulation by government, and businesses don’t seem to be aware. They are legislating you out of business.”
He added that in recent years, Uganda is strengthening regulations, many of which are copied from usually developed countries and adopted here, which in turn hinder business growth.
The forum was organised by the Sustainable Business for Uganda Platform (SB4U) – a partnership between the European Union, Private Sector Foundation Uganda (PSFU) and the Government of Uganda.
While addressing attendees during the dialogue, Caroline Adriaensen, the EU Delegation’s Head of Cooperation, said, “Even though MSMEs are the drivers of the Ugandan economy – constituting over 90% of the private sector and contributing approximately 2.5 million jobs, Ugandan MSMEs often exhibit low levels of productivity, high levels of informality and face incredible challenges to survival and growth.”
The SB4U Platform was created to address three critical hurdles for private sector development, namely: inadequate workforce skills as compared to the needs of the private sector, limited access to finance for the private sector, and endemic corruption linked to economic activities.
Through the platform, the European Union funds the “Skills, Attitude, Governance and Anti-corruption” (SG+) Programme to reduce the skills gap; tackle access to finance through the EU-Uganda portfolio on Access to Finance and identify key responses to support anti-corruption efforts in collaboration with the public and private sectors.
The forum also featured a panel discussion that had several MSME business owners share their entrepreneurial journeys and was filled with wisdom on how they overcame the challenges they have faced.
Dennis Ngabirano, CEO of Psalms Food Industries Limited who creates the Sumz snacks advised MSMEs to develop healthy business systems to increase their chances of becoming bankable.
“When we attempted to apply for big financing from Ugandan Development Bank (UDB), the checklist had over 30 requirements. When I did some self-evaluation, I realised that I could fulfil 31 out of the 36 requirements, and these are cultures, systems and lifestyles that have to be adhered to by entrepreneurs because they can push you to another level.”