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World Bank ranking leaves out concerns of small businesses

By Vision Reporter

Added 3rd October 2014 10:23 AM

Small-scale businesses are concerned that the World Bank Doing Business Report does not capture their challenges and, therefore, reform programmes like business licensing may exclude them.

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Small-scale businesses are concerned that the World Bank Doing Business Report does not capture their challenges and, therefore, reform programmes like business licensing may exclude them.


By David Mugabe

Small-scale businesses are concerned that the World Bank Doing Business Report does not capture their challenges and, therefore, reform programmes like business licensing may exclude them.
 
John Walugembe, the executive director of Uganda Small Scale Industries Association (USSIA), has pointed out the gaps in the doing business parameters, citing the registration process as an example of the inadequacy in the process.
 
During discussions held at the UMA Conference Hall earlier this week, Walugembe also noted that the Uganda Registration Services Bureau (URSB) is making business registration expensive for small-scale operators, who comprise over 90% of the country’s businesses.
 
“If it takes 15 days to register a business, it will not be easy for a small-scale entrepreneur upcountry,” noted Walugembe, adding that USSIA’s research shows that only 11% of small-scale manufacturing businesses are registered with URSB.
 
They (USSIA) are also concerned that Uganda Revenue Authority has done little for small enterprises, especially on the online tax registration process. They say this has resulted into additional costs with designated agents for tax registration charging them, thus hiking business costs.
 
“For small businesses, it is a matter of life and death,” noted Walugembe.
 
The World Bank releases the Doing Business Report for over 185 countries globally based on their performance across 10 indicators, among them, registration, access to credit and electricity and the legal framework.
 
Uganda has been declining in the rankings consistently, dropping to position 132 out of 185 this year, perhaps an indication that the reforms are not taking shape or they are too slow.
 
For instance, the process of registering and having a business licensed online has taken close to two years since it was kick-started. Although the reforms at the Uganda Registrations Services Bureau are ongoing, businessmen feel they are painstakingly slow and the country’s image and competitiveness is affected.
 
USSIA members are also concerned that the report leaves out aspects such as corruption, which is a huge cost to businesses, especially to the small players.
 
The association wants some of the issues to be expedited because they believe there are issues that do not need the President’s approval, but can be handled by mere directives. The reforms are mainly donor-driven although a secretariat at the Ministry of Finance.
 
USSIA members also complained about the high cost of power, transport and the lack of affordable financing as major deterrents to moving their businesses forward.
 
Officials from the Ministry of Finance responded, saying the reforms are taking shape slowly.
 
Most of the USSIA members are unaware of the doing business ranking. USSIA was formed in 1979 and comprises close to 4,000 businesses involved in value addition and production, mostly in construction materials, electrical and ceramics.
 
The majority of the members have less than sh100m in capital. Uganda’s micro, small and medium-scale enterprises constitute about 90% of the entire private sector, employing about 2.5 million people, according to information from USSIA.

They also comprise over 80% of manufactured output and contribute about 75% to the gross domestic product.

World Bank ranking leaves out concerns of small businesses

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