By Ali Balunywa
With a predominately Small Medium Enterprises (SMEs) economy, Uganda continues to present a healthy investment opportunity for local and foreign players seeking to establish businesses across the different sectors in the economy.
Spread across all sectors with 49% in services,33% in commerce and trade, 10% in manufacturing and 8% in others, SMEs are playing a key role in fostering innovation, wealth formation and job creation in Uganda, this is according to a 2020 October publication on the Uganda Investment Authority (UIA) website.
The Ministry of Trade Industry and Cooperatives in Uganda classifies SMEs as micro, small and medium enterprises.
Micro are those that employ between one to four people and with a turnover of Shs 0-Shs 10 million, then those with 5–49 people with a turnover of Shs 10-100 million are categorized as small, lastly, those with 50-100 people with a turnover of Shs 100-360 million are categorized as medium. SMEs offer employment opportunities to Ugandans.
Today, they cater for over 2.5 million individuals, approximately 90% of the Private Sector, and generate over 80% of manufactured output that contributes 20% of the gross domestic product (GDP) according to UIA.
The dynamic business environment within which SMEs operate has necessitated the need for training programs to foster their growth and guarantee continued employment creation and revenue generation for the government.
Research shows that oftentimes, thousands of SMEs in Uganda don’t live to celebrate their 5th Anniversary.
This is partly attributed to inadequate or no knowledge about the business they are running, cash flow challenges arising out of many factors and the in appropriate allocation of resources among others that are necessary for their sustainability.
As one of the solutions to address the human capital development gap that exists among the SMEs, last month, Airtel Uganda launched the Airtel Franchise Partner Development Programme, which is part of Airtel’s strategic corporate social responsibility initiative aimed equipping Franchise Partners with business skill sets that will see them become efficient, improve their individual performance and hence become more profitable.
This will replicate into a sustained value chain creating jobs for Ugandans.
These franchise dealers represent a vast majority of the small to medium enterprises in Uganda and have similar needs. The training was launched in Hoima municipality, one of Uganda’s budding hotbeds for SMEs and corporations looking to make a contribution in the oil and gas sector.
During the 3-day inaugural training, up to 34 business managers were trained on topics like; Personal Money Management, Basic Business Skills, running a franchise business, Tax and Responsible Trading and Environmental Awareness.
The training was quite enriching because it gave participants a wide view of running a business ethically and successful. The sessions were facilitated by experts from various institutions including; Uganda Revenue Authority (URA), NSSF Uganda, Ability Explored and Airtel Uganda.
The facilitators included Ronald Mayanja, the CEO Ability Explored; Asiimwe Moses, Uganda Revenue Authority (URA) Area Representative in Hoima; and John Aheebwa, Area Manager National Social Security Fund NSSF – Masindi and Hoima.
The key takeout for the businesses was the recommendation given by URA’s Asiimwe on the importance of getting the right task profiles for a business that one is operating.
For instance, he advised mobile financial services agents at the training to classify their businesses under financial services, unless they have other businesses they operate, for tax planning purposes.
This can save their businesses from incurring tax and expenses that might result from being categorized under a wrong tax profile. In addition, other facilitators covered areas like budgeting, research, planning among other that are key in sustaining a business’s growth.
With the right business training and operation skills coupled with application of the information provided at the different business seminars, SMEs can survive and thrive above five years, and continue to create countless opportunities for the local and international population that is directly or indirectly employed or supported by the SME sector.
The writer is the Sales & Distribution Director at Airtel Uganda