Registration of SMEs still cumbersome

Mr John Walugembe, the FSME executive director

What you need to know:

  • This was revealed by Mr John Walugembe, the Executive Director of the Federation of Small and Medium-Sized Enterprises, during the launch of a partnership to increase the competitiveness of 1000 Ugandan SMEs.

One of the challenges facing Small and Medium Enterprises (SMEs) is the formal registration of their business, according to market scan findings.

This was revealed by Mr John Walugembe, the Executive Director of the Federation of Small and Medium-Sized Enterprises, during the launch of a partnership to increase the competitiveness of 1000 Ugandan SMEs.

Mr Walugembe said they recognise that Uganda Registration Services Bureau (URSB) has made a number of changes to make the process faster, but it is still cumbersome.

He explained that firstly, the last business report of the World Bank, found that a person needs to go through 33 steps to register a business and needs a number of days to do that.

"The tedious process of registering a business, I think, is still an impediment to enterprise growth. The second complaint by SMEs is around issues of taxation; they felt that some of the taxes were not fair and the way in which they were enforced particularly by the revenue collectors made it difficult for them to run their businesses. Remember that a number of our businesses are upcountry and you need to come to Kampala or some regional office in order to register," Mr Walugembe explained.

He noted that SMEs are not against taxes, but they want to be handled humanly. He said the third issue was regarding the multiplicity of licenses, that licenses that duplicate each other and those that achieve no visible purpose apart from raising revenue are also a hindrance to SMEs flourishing.

Mr Walugembe said the idea of business licences is to create trade orders, but where licenses become a toll to raise revenue by local government, they become a hindrance to doing business.

He added that the fourth complaint was around infrastructure, the cost and reliability of electricity and we believe these ought to be addressed.

According to the Minister of State for Trade Harriet Ntabazi she said that enhancing the competitiveness of SMEs in Uganda is what has been lacking.

She said this is targeting the lowest livelihood of a person at the lowest, smallest level. That once we get quality products, and we serve them in quantities and consistently, then we are there.

"There is no question that we need to target the market, there is no way we shall look at market development without working on ourselves first. What we produce, how we process it, how we package it, and how we brand it. All these determine what product it is," Ms Ntabazi said.

She explained that it is hard to bring your product to compete with what you found on the market if you do not follow standards. She observed that the country has had issues with its products on the East African Market, others are being held for their quality.

Ms Ntabazi said making products of the best quality is what sets an entrepreneur's business apart from others.

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