Unprofessionalism holding back SMEs' growth

By Billy Rwothungeyo

The lack of professionalism among Small and Medium Enterprises (SMEs) is hurting their chances of growth, key people in Uganda’s academia have noted.

“Most of our SMEs cannot grow because they have failed to professionalize. It (growth) could be in profits or market share,” said Arthur Sserwanga, the dean of the Faculty of Commerce at Makerere University Business School (MUBS).

Speaking on the sidelines of the 18th annual international management conference hosted by MUBS in Kampala on Wednesday, Sserwanga said due to the local firms’ lack of professionalism, foreign companies are outdoing Ugandan companies on home ground.

“That is why companies that are not indigenous come here (Uganda), and because they have a professional touch, within a few months, they are on top,” he said.

As a result of this unprofessionalism, Sserwanga said the damage is being felt across the economic divide.

“How many people are we employing as SMEs? Quite few, yet we have the capacity to employ much more. Even the government is losing out on taxes. If you look at the top 100 tax payers in this country, how many are SMEs? Very few,” he said.

The ineptitude of these enterprises is also jeopardizing their efforts to partner with bigger foreign that would in the long run boost their growth.

“At one time, the New Vision published a story that showed that the majority of the water companies in Uganda are not certified. Can such companies attract a joint venture? Yet certification with the Uganda National Bureau of Standards (UNBS) is not a very difficult process,” he said.

Way forward

Sserwanga, also the chair of the conference, said SMEs need to embrace proper registrations, audits, certification, tax compliance among other measures to move grow.

“Professionalizing does not mean that you should get big headquarters and so many company vehicles. We should begin doing things the right way as expected by the stakeholders in the business environment,” he said.

MUBS principal Prof. Waswa Balunywa said training of SMEs is fundamental in the cause, but he also cited a challenge that the school is facing in their efforts to better enterprises.

“They (SMEs) do not want to be trained. It seems the NGOs sector has created a problem whereby people who undergo trainings are paid money. Training is the most important aspect because you cannot improve without knowledge,” he said.

Prof. Mathew Tsamenyi of the University of Birmingham said government should put more emphasis on SMEs.

“Very often when you go to African countries, you find that SMEs are left alone because there is no coherent government policy. Simply because everyone is targeting the big organisations which are very few,” he said.

The conference attracted scholars from over 40 countries around the globe.