He also pointed out that this should change now that the economy is to be opened up next month, adding that the lack of affordable finances has remained a major obstacle for the SMEs.

The executive director of FSMEs, John Walugembe said that in the wake of Covid-19 and its attendant effects on the economy, the cost of doing business in Uganda is rising to levels which are suffocating investments and innovations.

He also pointed out that this should change now that the economy is to be opened up next month, adding that the lack of affordable finances has remained a major obstacle for the SMEs.

Walugembe made these remarks during the release of the 2021 SMEs performance report, which shows that 20% of the SMEs closed business due to the unfavorable economic environment occasioned by the Covid-19 pandemic.

“This has been a difficult year for the SMEs sector. People don’t have money. You can open your shop and wait for the clients for three days and then you have to pay the rent. This is a big issue,” Walugembe said.

To leap beyond some of these hurdles in making money, Walugembe asked the government to formulate the Start-up Act to enable all SMEs to benefit from business-friendly government incentives and special packages.

“We ask the government to expedite the passing of the Act in order to ensure that our startups are supported to thrive. We want the government to put in place mechanisms to ensure that people find it easier to start and run businesses in this country because this is the only way they (government) can create jobs,” said Walugembe.

The Start-up Act Uganda project is an initiative of Uganda’s entrepreneurs in partnership with the Private Sector Foundation Uganda (PSFU), Uganda’s apex body for the private sector and the Mastercard Foundation.

It aims at leading entrepreneur-focused public-private dialogue to co-create a Start-up focused policy to make Startups a key driver of economic growth in Uganda.