Uganda Bets on Small Biz Growth to Hit $500B Economy by 2035

Uganda is placing a big bet on its small businesses to power an audacious economic leap—from 50 billion to 500 billion by 2035.

According to Ramathan Ggoobi, Permanent Secretary to the Treasury, micro, small, and medium enterprises (MSMEs) hold the key, but they need urgent support to scale up.

Why Small Businesses Matter

MSMEs dominate Uganda’s economy, making up:
✔ 90% of the private sector
✔ 80% of manufacturing output
✔ 75% of GDP
✔ Employing 2.5 million people

Yet, 93.5% remain micro-enterprises, trapped in informality. Only 4.1% are small firms, and a mere 2.4% are medium-sized.

“We must transform these small businesses into larger, formal enterprises,” Ggoobi stressed in the 2025-26 Budget Framework Paper.

The Six-Point Plan to Unlock Growth

To fuel this transition, the government is rolling out a bold strategy:

1. Formalizing businesses – Expanding Business Development Services (BDS) and enforcing local content policies.
2. Boosting financial inclusion – Making credit more accessible.
3. Capitalizing public financial institutions – Strengthening support for SMEs.
4. Completing regional standards labs – Ensuring quality for exports.
5. Finalizing free trade zones – Enhancing market access.
6. Fixing infrastructure bottlenecks – Cutting transport and energy costs.

The High Cost of Doing Business

Uganda’s SMEs face brutal hurdles:
🔴 East Africa’s highest lending rates (18.6%)
🔴 Expensive, unreliable electricity
🔴 Poor transport networks
🔴 Sky-high ICT costs

“We’re addressing these constraints head-on,” said Works PS Bageya Waiswa. Under National Development Plan IV, the government will:

✔ Build a multi-modal transport system (roads, railways, waterways).
✔ Slash logistics costs.
✔ Leverage urbanization for productivity gains.

The Bigger Vision

Ggoobi’s message is clear: Uganda’s economic future hinges on small businesses evolving into bigger players. With the right policies, the country could see:

✅ More jobs
✅ Higher exports
✅ A thriving formal sector

“If we get this right, the $500B economy isn’t just possible—it’s inevitable,” he asserted.