Prime
Only 39% of businesses are registered
A vendor hawks goods along Nabugabo Street in Kampala. Long business registration procedures discourage businesses from registering. PHOTO/MICHAEL KAKUMIRIZI
Uganda’s entrepreneurial spirit remains strong, with 88 percent of business owners reporting a positive attitude towards their ventures and 79 percent eager to grow, according to the State of Entrepreneurship report.
However, the same report from the Ministry of Trade, launched recently in partnership with the Mastercard Foundation, IPSOS, Ichuli Institute, and others, paints a mixed picture of the country’s entrepreneurial landscape.
While the national entrepreneurship index scored a moderate 57 percent, significant challenges need to be addressed. Key areas like business linkages (24 percent), technology adoption (35 percent), and business registration (39 percent) scored particularly low, showing deep systemic issues.
With only 39 percent of businesses registered, the report points out the need to simplify the registration process, which could help entrepreneurs access affordable financing and business development services.
Joshua Mutambi, Commissioner for Small and Medium Enterprises at the Ministry of Trade, acknowledged this gap, saying, “We still need to encourage formalisation because many enterprises fear registration, thinking that once they register, they will be forced to pay taxes and other fees. Yet, registration is the key to accessing finance.”
Mutambi also pointed out that the lack of business registration is one of the main reasons why access to finance is limited.
“The reason as to why access to finance has been found lacking is because most of them are not registered, and don’t keep records,” he added.
John Mark Muwangula, the managing director at Ichuli Institute, emphasized the need for decentralising business registration.
“I don’t think it is a good idea to have the Uganda Registration Services Bureau headquartered only in Kampala.
“We should ensure that business registration is simplified in the same way as the processes for mobile money or bank agents, since they require the same documents,” Muwangula said.
The report also highlights other challenges faced by Ugandan businesses, including financial instability, a digital divide that affects about 53 percent of MSMEs, and a high business mortality rate.
With only 8 percent of businesses operating for 15 years or more, the majority are under 10 years old, showing a high rate of failure among startups.
