Uganda, Her Micro, Small & Medium Enterprises M(SMEs)…
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Like most global economies, Uganda thrives on the success of micro, small, and medium-sized enterprises.
Uganda: A land-locked country in Eastern Africa, with a population of over 49.6 million people as of 2023. According to data by worlddata.info, Uganda’s Gross Domestic Product was at about 12,703 USD per capita in 2022 and has on another scale reached USD 964 per capita, or 45.57 billion USD for the whole country. Uganda is currently ranked 94 among the major economies. Uganda is neighboured on the east by Kenya, on the south by Tanzania and Lake Victoria, Rwanda on the Southwest, DR Congo on the west, and Somalia, and South Sudan in the North. Uganda has over fifty-six (56) tribes, and over fifty-nine (59) languages, and currently has over one hundred thirty-five (135) districts with major cities including Kampala (the commercial capital), Mbarara, Jinja, Fort Portal, Masaka, and Gulu.
Ugandans: Ugandans are residents or nationals of Uganda. Ugandans may be so by naturalization, by birth, or immigration. The traditional economic activities for Ugandans include farming/Agriculture, fishing, pottery, and weaving (natural artisans of crafts from timber, clay, or other materials like (banana fiber, and sisal), to mention but a few.
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Micro Enterprises:According to Investopedia, a micro-enterprise is a small business that is financed by microcredit, a small loan available to people who have no collateral, credit history, savings, or employment history. The modest loans are often sufficient to get a small local business off the ground.
A micro-enterprise could be any business in your neighborhood, from the charcoal stall, the fruits and vegetable stall, the new supermarket that recently opened on your street, the domiciliary clinic by the lane to your fiance’s house, and the grocery store or retail shop you quickly hurry to at 11 pm when you realize you ran out of matchboxes and now you have to warm your toddler’s milk. Micro enterprises occupy the majority of the rural, urban neighborhoods in developing economies. In Uganda for instance, many people can put a meal on their table, take children to school, pay rent, and generally declare themselves financially free, by ownership of micro-enterprises. They could be boutiques, and beauty parlors, to mention a few. On a global scale, a business is a micro-enterprise as long as its revenue is less than USD 250, 000.
In a publication by the Uganda Investment Authority, A ‘Micro Enterprise’ is an enterprise that employs up to four people, with an annual sales/revenue turnover or total assets not exceeding Uganda shillings 10 million. On the other hand, Small Enterprises employ between 5 and 49 and have total assets between UGX: 10 million but not exceeding 100 million. The Medium Enterprise, therefore, employs between 50 and 100 with total assets of more than 100 million but not exceeding 360 million. The SME Division (SMED) of the Uganda Investment Authority supports and facilitates the development of MSMEs who are majorly domestic entrepreneurs. The overall goal of the SME division is: Developing Sustainable Domestic Investments & SME’s
Small and medium-sized enterprises (SMEs): These are businesses that maintain revenues, assets, or several employees below a certain threshold. Each country has its definition of what constitutes a small and midsize enterprise. (Definition by Investopedia)
According to the World Bank, SMEs;
Account for the majority of businesses worldwide and are important contributors to job creation and global economic development.
Represent about 90% of businesses and more than 50% of employment worldwide.
Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. (And these numbers can go up if informal SMEs are included).
NOTE
Micro enterprises are known to employ between one to four people, while SMEs could employ between five to ninety-nine individuals. Medium enterprises may employ over one hundred to four hundred ninety-nine individuals.
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Where do Ugandans get most of their money?
The majority of Ugandans traditionally get their money from micro, small, and medium enterprises (SMEs). It is arguable that while a lot of Ugandans are employed in the formal sector and have 9-5 jobs, those who are truly independent get their money from trading. (Obusubuzi). They trade everything from food, clothes & accessories, beauty & beauty products, health care, travel, hospitality & tourism, and entertainment, among others.
While on the surface, people in formal education are admired and respected, the ones doing seemingly minute jobs such as retail shop-keeping, charcoal selling, agro-produce selling, name it- seem to have more earning potential than their office-job counterparts. The gap, however, is in the financial literacy attained by the two parties, as it determines who progresses; depending on what they know and their ability to multiply what they have – finance management or investment skills.
The Uganda Investment Authority also reveals that the Strategic objectives of the Small & Medium Enterprises Division/SMED in Uganda include;
i) Facilitation and support for the development of competitive SMEs in the priority sectors
ii) Increase revenues earned by SMEs.
iii) Facilitation and support for SMEs under the National Content Inclusion in priority sectors.
iv) Improved access to business-related information.
v) Advocacy for and on behalf of SMEs.
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