SEATINI, FSME and ICG Call on Government to Address the Plight of MSMEs

Micro, Small and Medium-sized Enterprises (MSMEs) are key drivers of employment, decent jobs and entrepreneurship especially for women, youth and other vulnerable groups. MSMEs in Uganda account for over 90% of the Private Sector, they employ more than 2.5 million people. However, MSMEs have been hit the hardest by the negative socio-economic impact of the COVID-19 pandemic and their operations and contribution have been disrupted and declined by the pandemic.

Every year, World MSME Day is celebrated globally to raise public awareness of their contribution to sustainable development and the global economy. This year’s theme is; “Resilience and rebuilding: MSMEs for sustainable development at the forefront of building back better and stronger from the impacts of the COVID-19 pandemic, climate crisis and conflicts”.

As part of the efforts to commemorate this year’s World Micro, Small and Medium-sized Enterprise (MSME) Day, SEATINI Uganda together with the Federation of Small and Medium-sized Enterprises (FSME) and the Institute of Corporate Governance of Uganda held a press conference during which, they called on government to address the plight of MSMEs to recover from the effects of the COVID-19 pandemic and thrive.

Speaking at the press conference, SEATINI Uganda Policy Analyst, Women Economic Justice, Ms Joanita Nassuna observed that MSMEs are the engine for the Ugandan economy and thus the need for Government of Uganda to prioritize them in the economic recovery efforts.

Ms Joanita Nassuna emphasized the need to review and update relevant policies such as the National Trade Policy which expired in 2018. She noted that the National Trade Policy needs to be updated in line with the current circumstances.

She added, ‘‘The 12% tax on internet data increased the cost of internet data in Uganda making internet expensive for MSMEs yet it is key for MSMEs’ operations.

URA should undertake tax education among MSMEs to make them appreciate the need to formalize which will subsequently enable MSMEs to enjoy benefits that come with formalization,’’ Joanita Nassuna said.

Mr John Walugembe, the Executive Director at FSME observed that government implemented a range of fiscal and monetary policy interventions to cushion business enterprises including: instituting credit relief measures, setting up the Small Business Recovery Fund, channeling over 636 billion through the Uganda Development Bank and over UGX 100 billion through the Microfinance Support Centre. He noted that although these measures were well intentioned, they have had varying levels of success.

Mr Joshua Mawerere from called on government to invest in MSMEs by training owners and managers in corporate business practices. This will enable them interact more easily with bigger firms and reduce the high mortality rate amongst MSMEs.

Currently, SEATINI Uganda with support from Rosa Luxemburg Stiftung Foundation is supporting impact driven agro-based MSMEs and influencing a supportive policy to unlock their potential and competitiveness towards accessing national, regional and global markets.