The Government of Uganda has for long recognized the significance of the private sector in achieving sustainable socio-economic development. Uganda’s economic development policy envisages an inclusive private sector-led and export-oriented economy. To that end, Government designed and implemented several initiatives such as the Plan for Modernization of Agriculture (PMA), the Medium Term Competitiveness Strategy – MTCS (2000-2005) and the Competitiveness and Investment Climate Strategy (CICS) I (2005/6-2009/10) and II (2011-2015/16), National Development Plans (NDP I, II &III). These strategies are useful in building private sector stakeholder consensus hence developing the economy at large.
On the basis of a comprehensive situational analysis of Uganda’s Private Sector, the Government launched the National Strategy for Private Sector Development-NSPSD 2017/18-2021/22 which proposes interventions to be undertaken at Macro, Meso and Micro levels of the economy. The National Strategy takes into account the key lessons from the design and implementation of previous strategies and has been formulated for a five-year period (2017/18-2021/22), in accordance with the priorities of the National Development Plan (NDP II). It aims to facilitate coordinated action within the public sector and between the public and private sector for development.
Based on performance, the private sector credit continued to decline in FY2020/21 recording a growth of 7.1 percent compared to 125 percent in FY2019/20 and also below the NPDIII target of 8.4 percent for the period under review. The lower private sector credit is attributed to the persistently high lending rates, risk aversion by banks due to the poor performance of many businesses as well as the negative effect of the lockdown on the performance of many SMEs. Nonetheless, the private sector as a percentage of GDP was reported at 14.35 % in FY2020/21 surpassing the NDPIII target of 10.9 for the review period.