Briefing Paper

Improving the Growth and Transition of Small and Medium Enterprises in the Greater Kampala Metropolitan Area

In the face of rising population numbers, urban areas in Uganda are increasingly facing competition for their resources. More than one out of every five Ugandans are residing in urban areas and the urban population is expected to triple in the next two decades. Most of the urban population resides in the Kampala Metropolitan Area (GKMA)— a region challenged with unemployment and inadequate opportunities. Enhancing firm performance in urban areas offers a promise for jobs and local revenue to boost city development. Local governments and city council need to create mechanisms that address firm constraints and harness the factors that drive firm competiveness, growth and transition. Potential opportunities lie in collaborating with financial institutions to provide affordable credit, improving taxation procedures, establishing of business spaces for the small firms and influencing vocational schools to impact relevant skills. This brief examines constraints to small and medium firm’s business operation in the GKA. The study interviewed 80 micro, small, medium and large firms in Kampala, Mukono and Wakiso districts.