Position papers

FSME publishes a range of position papers to articulate our members’ position or viewpoint regarding a particular government policy or issue.  These policy papers also contain key recommendations on what government should do. Below are our most recent position papers:

Position paper on lowering the costs of doing business

This position paper was written in the aftermath of the release by the World Bank Group, of its annual ‘Doing Business report 2018: Reforming to Create Jobs’. The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operations. Economies with a high rank (1 to 20) have simpler and more friendly regulations for businesses. In this year’s report, Uganda dropped by seven points to a rank of 122, out of 190 economies. This dismal performance contrasts with the rank of 115 scored in the year 2017. In the period 2016-17, Uganda introduced only one reform of improving trading among East African trading partners through allowing the submission of electronic documents, processing certificates of origin and extending the ASYCUDA++ electronic data interchange system to four additional customs stations.  This position paper makes recommendations on necessary reforms in starting a business, dealing with construction permits, getting electricity, registering property, getting credit, paying taxes, enforcing contracts, protecting investors and resolving insolvency. Please email info@fsmeuganda.org for the detailed position paper.

Position paper on improving access to finance

This position paper summarises the key challenges faced by MSMEs in accessing finance and makes recommendations on how SMEs, who play a major role in innovation, employment creation and economic growth in Uganda; can more easily access affordable finance to grow. The paper states that most SMEs still rely on debt financing by banks, microfinance institutions and money lenders, as their primary source of business financing. Unfortunately, formal financial institutions alone seem unable to provide affordable finance to micro and small enterprises, as they are considered very risky. There is therefore a need to look at alternative mechanisms for financing small businesses.  Unfortunately, external equity financing is not well understood by most SMEs in Uganda and most venture capitalists are reluctant to invest in smaller companies, as it is quite difficult to exit from such investments. Key recommendations of this paper include: government reviewing its taxation regime to incentivize venture capitalists, developing a secondary market for equity investments in SMEs, need to promote Saving and Credit Societies (SACCOS), cooperative banks/societies and investment clubs as alternative sources of finance for SMEs. The need to strengthen the capacity of banks and MFIs to lend to SMEs .

 Position paper on positioning small and medium enterprises as drivers for job creation and decent Work in Uganda

This position paper posits that although Small and Medium Enterprises constitute the largest share of private sector enterprises and account for the bulk of employment in Uganda, they still struggle with attracting skilled workers. SMEs specifically need workers with technical, practical and job specific skills. Increasingly also, SMEs need workers with management and soft skills. The paper shows that to fill the skills gap, SMEs rely on both formal and informal training methods. However, the limited collaboration between formal training institutions and industry, undermines the effectiveness of formal training. As such most SMEs seem to get better training outcomes from inhouse informal training that focusses on productivity enhancing skills.  To encourage firms to invest in training for their employees, the paper makes the following recommendations:  Promote co-investments by the private sector in the proposed Skills Development Fund, on condition that the private sector oversee its operations, incentive formal training organizations to recognize informal and non-formal learning, support SMEs undertake skills audits so that they are able to address their enterprise skills challenges and develop local skills ecosystems that feature partnerships between industry and training providers.

 

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