Small and Medium Enterprises (SMEs) have been urged to embrace ethical business practices and sound corporate governance if they are to survive, grow and contribute meaningfully to Uganda’s economy.
Speaking in Kampala yesterday at the launch of the 18th edition of the KPMG-Nation Media Group Uganda Top 100 Mid-Sized Companies Survey, Mr Peter Kyambadde, the head of tax and regulatory services at KPMG Uganda, said SMEs remain a critical pillar of Uganda’s economy through job creation and wealth generation.
‘SMEs are at the centre of economic transformation. They drive inclusive growth and create employment opportunities for millions of Ugandans,’ he said.
Mr Kyambadde said businesses that operate with integrity, transparency and accountability are better positioned to attract customers, secure financing and withstand economic shocks.
According to business experts, ethical conduct helps enterprises avoid legal disputes, strengthen their reputation and build lasting relationships with customers and stakeholders.
However, despite their importance to the economy, many SMEs continue to struggle to stay afloat. Ms Oliver Mugaga, the head of SMEs at Equity Bank Uganda, said a significant number of businesses fail within their first few years due to financial and operational challenges.
‘Available evidence shows that approximately 66 percent of Ugandan businesses collapse before celebrating their first anniversary, while nearly 92 percent fail within the first three years,’ Ms Mugaga said.
She attributed the high failure rate to a combination of factors, including expensive borrowing, inadequate financial planning, limited access to affordable credit and weak business management systems.
Ms Mugaga said financial institutions have developed interventions aimed at supporting SMEs, including recovery funds and affordable financing options designed to help businesses weather difficult economic conditions.
Ms Mugaga encouraged entrepreneurs to seek professional advice, improve bookkeeping practices and take advantage of available financing opportunities to strengthen their enterprises.
The Managing Director of Nation Media Group-Uganda, Ms Susan Nsibirwa, said the Top 100 Mid-Sized Companies initiative has over the past 18 years provided a platform for recognising and supporting businesses that demonstrate resilience and growth potential.
She noted that many successful companies started as small enterprises before growing into major players in their respective sectors.
‘For 18 years, this platform has celebrated businesses that began modestly and went on to become industry leaders,’ Ms Nsibirwa said.
She added that supporting SMEs is critical because they account for the majority of businesses in Uganda and play a vital role in employment creation.
‘When we support SMEs, we support the economy. They make up the bulk of businesses in the country and provide livelihoods to millions,’ she said.