Trade Minister Sanjay Tanna roots for SMEs as drivers of economic growth

KAMPALA: Trade Minister Sanjay Tanna has reaffirmed government’s commitment to supporting micro, small and medium enterprises (MSMEs), describing the sector as the backbone of Uganda’s economy and a key driver of the country’s industrialisation and export agenda.

Speaking at the opening of the UG Catalyst Summit at MoTIV in Bugolobi on Thursday, Mr Tanna said MSMEs account for about 99 percent of businesses in Uganda, contribute 75 percent of Gross Domestic Product (GDP), employ more than three million people, and generate over 80 percent of domestic revenue.

He said the summit aligns with the objectives of the Fourth National Development Plan (NDP IV) and the government’s priority sectors under the Agriculture, Tourism, Minerals, and Science, Technology and Innovation (ATMS) strategy.

Despite the sector’s importance, Mr Tanna acknowledged that many businesses continue to face challenges such as limited access to affordable credit, low adoption of technology, inadequate skills, and difficulties in meeting quality standards required for regional and international markets.

“Our MSMEs have demonstrated remarkable resilience despite economic shocks and market challenges. Government remains committed to helping them transition from informal survival businesses into competitive, productive and export-oriented enterprises,” he said.

The minister highlighted several government interventions aimed at promoting business formalisation and growth, including the Trade and Enterprise Revival Programme (TREP), the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), and the establishment of One-Stop Business Centres to simplify registration and licensing procedures.

He also announced that qualifying startups can now benefit from a three-year tax holiday under the revised Income Tax Act, 2025, a measure intended to encourage innovation and entrepreneurship among young businesses.

Mr Tanna said the Ministry of Trade is finalising several policy reforms to strengthen the MSME ecosystem, including the revision of the MSMEs Policy (2015), the Startup Development Policy, which is expected to be submitted to Cabinet soon, and the Business Development Standards Policy.

He noted that these reforms are intended to improve access to finance, strengthen business development services, enhance competitiveness and create a more supportive environment for startups and growing enterprises.

The minister further pledged continued government investment in productivity, value addition, market access, industrial parks, free zones and business incubators to help local enterprises scale up and participate more effectively in regional and global value chains.

“Uganda’s economic transformation will largely depend on the success of our MSMEs. By supporting innovation, formalisation and value addition, we can create more jobs, expand exports and improve household incomes,” he said.

The UG Catalyst Summit brings together entrepreneurs, investors, policymakers and development partners to discuss strategies for accelerating the growth of startups and small businesses in Uganda.

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