Introduction

The Government of Uganda has long-recognised the significance of the private sector in achieving sustainable socio-economic development. Uganda’s development policy envisages an inclusive private sector-led and export-oriented economy. To that end, the Government has pursued a private sector-led approach to its economic policy and management over the last three decades with interventions targeting the modernization of agriculture; building up of an industrial base; and leveraging the private sector to deliver public infrastructure and social services. This is at the heart of the Government’s new five-year National Development Plan (NDP III).

However, despite the Government’s positive approach, the private sector in Uganda remains weak, largely informal and small-scale. Uganda has a largest prevalence of micro and small enterprises of any other country in the ECA region with 70% of firms having fewer than 10 employees and the informal economy containing over 3 million household enterprises. Moreover, whilst Ugandan firms suffer no barriers to start up and entry, there are significant barriers to growth: only around 25% firms survive beyond five years. The constraints are multifarious: lack of access to finance and business development opportunities; poorly functioning regulatory environment; low availability and reliability of key infrastructure (energy, transport). The impact of COVID has been to exacerbate many of these constraints, especially in terms of declining access to credit, increased liquidity constraints and disruptions to supply-chains.

Private Sector Development Partners Group

There are a number of development partners – bilateral and multilateral – in the private sector development space in Uganda (see: table of PSD programmes). These development partners are taking forward a range of programmes covering the business-enabling environment; institutional strengthening; financial sector reform; and business-development services. In addition, there are sector specific private sector programmes in areas such as agri-business, manufacturing and tourism.

The purpose of the Group is to ensure there is a coherent voice for development partners to carry out a dialogue and consult with the Government of Uganda as it takes forward the National Development Plan III, focusing on the Government’s Programme Action-Plans for the private sector.