By John Odyek
Entrepreneurs are the backbone of the music industry but sadly, they do not receive similar adulation to those they support. The lack of recognition is unfair and according to John Walugembe the chief executive officer Federation of Small and Medium Size Enterprises Uganda, entrepreneurs should be treated as stars in the country.
“We praise only musicians in this country, we should praise entrepreneurs who contribute a lot to this country’s development,” Walugembe said.
He added “Entrepreneurs in Uganda contribute to employment, tax payment, skills creation, empower women and youth but they are not celebrated like Uganda’s musicians and artists.”
Walugembe made a presentation on the topic ‘SMEs for sustainable growth and wealth creation’’. This was during an online seminar organized by the Institute of Certified Public Accountants of Uganda (ICPAU).
“We need a culture that praises entrepreneurs, we spend time praising musicians and ignore entrepreneurs that are building the country,” Walugembe added.
Walugembe said the over two million SMEs help in building local skills, bringing in innovation. He cited mechanics who work in local garages created by even if they did not go to school but earn income.
“SMEs create economies of scale creating income and physical work, SMEs add value they help to industrialise and lead to wealth creation. We need a new growth paradigm that focuses on innovation and digitalisation if we are to transform Uganda,” Walugembe said.
According to CPA, the theme for the seminar: “Stimulating Economic Growth and Development for Sustainability” focuses on building resilience in businesses to overcome the challenges posed by COVID- 19 in our communities.
Walugembe said accountants are critical human resources for Uganda is to transform. “Accountants are important in issues of formality, keeping proper books and building trust,” Walugembe said.
He called for more support to support SMEs such as more access to markets, getting the right skills, access to cheap finance and making them more productive.
On the question of size of firms, he said success should not be measured by size alone. “Not every business must be large, medium but we do not want informal outfits that are survivalist,” he said.
He said the public service employs about 400,000 people and the bulk of people are employed by SMEs and others in agriculture.
He reiterated the perennial lack of finance impacting on SMEs and lack of affordable services like accounting.
He noted that regulatory framework is not conducive for. “SMEs are operating in difficult conditions; they are working under sheds, makeshift structures”.
Walugembe said most business activities are concentrated in Central Uganda in Kampala and Wakiso districts followed by Western and Eastern Uganda and Northern Uganda is lagging.
He called for a reversal of the trend where businesses are concentrated in Central Uganda.
On women’s role in business he said the majority of SMEs businesses are run by women but they tend to be micro in nature.
Despite the fact that women run many businesses they face constraints of access to finance, balance time to work with family duties and they lack assets.
He noted that most SMEs close after opening those in existence are not more than 10 years old. The SMEs are operating in sectors such as agriculture, retail, trade, commerce, agro-processing, food and services, personal services, creative arts and financial services
COVID-19 has affected SMES and those led by women were more impacted by COVID-19. They have suffered with low sales as compared to men led business.
“Some businesses feared they would not be helped and would close. Many SMEs have made losses, few SMEs have benefitted from the support due to procedures, lack of information available to them,” Walugembe said.
He said there are opportunities for SMEs to access new markets through the African Continental Free Trade Area. “I find it easy to go to Dubai than Togo, Cameron; we need to trade more with each other in Africa”
“There is an opportunity to reposition and make our youth and women enterprises thrive. They have suffered historical injustices that need to be addressed,” Walugembe said.
Walugembe expressed disappointment at the high costs of starting business. “The regulations are too many, there are too many licenses, you make life difficult for businesses to operate. We are at the bottom of the score for the World Bank ranking in starting businesses. How do we promote the business environment to make it easy to operate business,” Walugmbe said.
He said Uganda needs better Internet as there is a lockdown with restricted movement. “We need to reform out finance system to be pro Uganda. How do we ensure that SMEs are no excluded from government procurements by saying SMEs are not formal, have no capacity but they pay taxes. Why don’t they say they should not pay taxes because they have no capacity,” Walugembe said.