In a meeting held on Monday, October 23, 2023, Col Edith Nakalema, the Head of State House Investors Protection Unit, called upon several heads of government ministries, departments, and financial institutions to address the grievances raised by Small and Medium Enterprises (SMEs). During the meeting at the Office of the Prime Minister’s Conference Hall in Kampala, Col Nakalema discussed concerns raised by SMEs regarding obstacles to their investments.
SMEs complained about several issues hampering their investments. One major concern is the high taxes imposed on them, which they believe hinder their business growth. Col Nakalema noted that the Uganda Revenue Authority is actively working to address these tax concerns.
Another issue raised by SMEs was the high-interest rates charged by commercial banks when providing business loans. Col Nakalema reported that the Finance Ministry has engaged with banks to encourage them to offer more favorable conditions for SME loans to stimulate investment.
The delay in the certification of products by the Uganda Bureau of Standards (UBOS) was also discussed. Col Nakalema inquired about the reasons behind these delays and urged UBOS to expedite the process to prevent SMEs from incurring financial losses due to these delays.
During the meeting, it was mentioned that some staff at UBOS were allegedly taking bribes from larger companies to slow down the certification of SME products, leading to market monopolization. Col Nakalema called for transparency in the certification process and expressed the need to prevent such practices.
Ms Patricia Ejalu, the deputy executive director of Ubos, assured that they would organize a sensitization session for SMEs but emphasized that all applicants must adhere to product standardization processes, regardless of their size.
On the topic of taxes, Mr. John Musinguzi, the Commissioner General of Uganda Revenue Authority, encouraged SMEs to continue paying taxes for the country’s development. He acknowledged that the country was under-collecting taxes, emphasizing the importance of reaching a tax to Gross Domestic Product ratio of at least 20 percent for national development.
Responding to concerns about the availability of post-Covid recovery funds with lower interest rates, the vice-chairperson of the Uganda Banker’s Association called upon banks to make these funds accessible to SMEs. Mr. Moses Kaggwa, the director of economic affairs at the Finance Ministry, revealed that the government had allocated UGX 200 billion as a post-Covid recovery fund for SMEs but only Shs12 billion had been disbursed so far.
