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Private Sector

The Private Sector is recognized as the primary engine for Uganda’s socio-economic transformation, responsible for over 75% of the Gross Domestic Product (GDP) and 90% of non-farm employment. Under the 10-fold Growth Strategy, the private sector's role has shifted from passive participation to leading the qualitative leap in the ATMS sectors. The strategy demands that private enterprises spearhead value addition and export-oriented manufacturing to diversify Uganda’s economic base. To support this, the government is focusing on creating a business-friendly environment by dismantling regulatory barriers, reducing the cost of doing business, and fostering a Knowledge Economy where private innovation drives double-digit growth.

 

Strategic benchmarks require the private sector to bridge massive productivity gaps to achieve the target of doubling the economy every five years. Key statistics for (2025) indicate a real GDP growth of 6.3%, with a medium-term target of 10%+ annually. To achieve the 2040 goal, the Private Sector must help increase the tax-to-GDP ratio from 13% to 25% and drive merchandise exports from 13% to 50% of GDP; create 47,413 jobs annually; and increase domestic savings from 17.7% to 22.7%. A critical challenge remains the high informality rate, which rose to 54.75% in 2025; consequently, a major NDP IV target is the formalization of MSMEs, given that 90% of small businesses currently do not survive their first year. Furthermore, the strategy aims for a surge in annual Foreign Direct Investment (FDI) from US$3 billion to US$50 billion, necessitating a highly competitive and transparent local private sector.

 

The government is facilitating Private Sector growth through heavy capitalization of development finance and targeted industrial projects. Key initiatives include the Uganda Development Bank (UDB), which has been allocated an extra Shs 1 trillion to provide low-interest credit (about12%), and the Agricultural Credit Facility (ACF).  With these efforts, the Private Sector is expected to facilitate innovation, technology adoption, market linkages and capital mobilization, complementing government investments in infrastructure, skills and regulatory reforms. Through public-private partnerships, value-chain development and enterprise formalization, businesses enhance industrial competitiveness, export readiness and inclusive growth, contributing to poverty reduction and lowering subsistence households to 21%. Strong private sector engagement, supported by an enabling business environment, investment incentives and access to finance, is essential for achieving NDPIV Private Sector Development targets and sustaining progress toward the 10-Fold Growth Strategy.