Uganda's SMEs: Backbone of Economy, Yet Missing from Exports

Uganda’s Small and Medium Enterprises (SMEs) form the core of the local economy, making up over 99% of businesses, employing more than 2.5 million people, and contributing up to 70% of GDP. They span trading, services, and agro-processing, fueling daily economic life.

However, SMEs are notably absent from export figures. In FY 2024/25, Uganda’s goods and services exports exceeded $13 billion, with merchandise at $10.6 billion. Exports surged 77.6% in January 2026 to $1.45 billion, led by gold ($5.8 billion), coffee ($1.3 billion), fish, sugar, cocoa, and electricity—mostly from large firms.

Fewer than 10% of SMEs export formally, with most stuck in informal cross-border trade. Over 93% are micro-enterprises with under 10 employees; only 7% scale for exports. Half are in services, a third in trade, and 10% in manufacturing.

Export barriers include certifications like ISO, HACCP, and GlobalG.A.P., plus packaging, traceability, and financing challenges for over 60% of SMEs. Yet, the Uganda Free Zones and Export Promotion Authority (UFZEPA) oversees 40 zones with $2 billion in investments and 14,000 jobs, contributing 11% of merchandise exports. SMEs could integrate as suppliers with better access to infrastructure and mentorship, especially beyond Kampala.

The Uganda National Bureau of Standards (UNBS) should bolster support for sanitary and phytosanitary standards to tap AfCFTA and EU-EPA markets. Regional African markets, taking 40% of exports, offer easier entry via processed goods and formalized informal trade.

Services present huge potential: tourism earned $1.28 billion from 1.37 million visitors in 2024 (43% of GDP), while ICT and BPO leverage 15 million internet users for remote exports like software and consultancy.

To make SMEs export-ready, actions needed include free zone integration, expanded finance, standards aid, regional trade formalization, and digital services promotion.

Source: Daily Monitor (Uganda)