Uganda reviews private sector reforms as economy targets 10-fold growth

Government of Uganda has begun a comprehensive review of its Private Sector Development (PSD) Programme as it transitions from the Third National Development Plan (NDP III) to NDP IV, with officials highlighting progress in access to finance but raising concern over rising informality in the economy.

The PSD Programme annual review for FY2024/25, held on Thursday at Mestil Hotel in Kampala under the theme “Strengthening formalisation under the NDP IV,” brought together government agencies and private sector stakeholders to assess performance over the past five years.

Speaking at the meeting, the Minister of State for General Duties, Mr Henry Musasizi, said Uganda’s economy had rebounded strongly and was now ranked among the fastest-growing globally, with projections placing it among the top performers by 2031.

“Macroeconomic indicators reflect resilience and stability, making Uganda increasingly attractive to investors,” Mr Musasizi said.

He pointed to expanded financing to the private sector as a key achievement under NDP III. Capitalisation of the Uganda Development Bank has exceeded Shs1.5 trillion over the past five years, while Emyooga has disbursed more than Shs500 billion. The Parish Development Model (PDM) has injected Shs3.26 trillion into local communities, reaching millions of beneficiaries and deepening financial inclusion.

However, officials acknowledged structural weaknesses that could undermine ambitions under NDP IV, which incorporates the government’s Tenfold Growth Strategy aimed at expanding the economy to $500 billion by 2040.

Mr Musasizi said achieving that target would require a “major leap” in delivery capacity, with focus on affordable credit, managing domestic arrears, strengthening private sector capacity and accelerating formalisation.

The Permanent Secretary and Secretary to the Treasury, Mr Ramathan Ggoobi, represented by Director of Economic Affairs Mr Moses Kaggwa, said the review offered an opportunity to reflect on gains and shortcomings under NDP III.

He noted that while non-commercial lending to priority growth sectors had risen to four percent of GDP from 1.5 percent in 2018/19, the share of the informal sector had increased to 54.75 percent from 51 percent over the same period.

“This shows we have made progress in some areas but performance has been weak in others,” Mr Ggoobi said, urging stakeholders to adjust strategies under NDP IV.

The PSD programme focuses on lowering the cost of doing business, strengthening private sector capacity, promoting local content, unlocking investment in strategic sectors and improving standards enforcement.

The review concluded with the launch of a new PSD Programme Implementation Action Plan to guide reforms under NDP IV.