Uganda’s micro, small, and medium enterprises (MSMEs) account for an impressive 90% of the private sector, contributing 75% to GDP and employing over 3 million people. Despite this critical role, the MSME sector faces systemic challenges that stifle its growth potential.
Today, the Ministry of Trade, Industries, and Cooperatives, in partnership with the Mastercard Foundation, IPSOS, Ichuli Institute, and other partners, launched the State of Entrepreneurship in Uganda 2024—a landmark report offering a comprehensive assessment of Uganda’s entrepreneurial landscape. The report introduced the National Entrepreneurship Index (NEI), which scored 57%, signaling a moderately healthy ecosystem while highlighting the need for targeted interventions.
The Minister of Trade, Industry, and Cooperatives, Hon. Francis Mwebesa, said, “Given the role MSMEs in Uganda 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.”
Hon. Mwebesa added, “Uganda Vision 2040, the Third and Fourth National Development Plans (NDPIV), the NRM Manifesto, the National Trade Policy, the National Industrial Policy, and the MSMEs Policy collectively emphasize the critical role of the private sector in driving Uganda’s economic growth and transformation.”
He further stated, “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.”
Speaking on behalf of Adrian Bukenya, Country Director of the Mastercard Foundation Uganda, Meralyn Mungereza, Head of Entrepreneurship & Enterprise Development at the 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
According to Dr. Margaret Kemigisa, Director of IPSOS Africa Centre for Development Research and Evaluation, the National Entrepreneurship Index scored 57%, reflecting a moderately healthy ecosystem despite the significant barriers that threaten its growth and sustainability.
Dr. Kemigisa said, “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 added, “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. This approach enables a deeper examination of how different MSME segments navigate and perform within the ecosystem.”
Key Insights and Challenges
The NEI revealed 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. Challenges such as financial instability, a digital divide affecting 53% of MSMEs, and demographic disparities—where women-owned businesses scored 56% compared to 59% for men, and youth entrepreneurs (18–30) scored 60% but lagged in registration—highlight persistent gaps.
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. As Dr. Margaret Kemigisa noted, “This report reflects the resilience of Uganda’s entrepreneurs and the opportunities to strengthen the ecosystem.”
The collaborative approach behind this report unites policymakers, financial institutions, and development partners to align efforts and foster sustainable growth. The State of Entrepreneurship 2024 is not just a reflection of the present but a roadmap to transform Uganda’s entrepreneurial future, empowering MSMEs to drive innovation, employment, and economic transformation
Click here to access the full report
