Columbia International Affairs Online: Working Papers

CIAO DATE: 06/2008

Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda

Esther K. Ishengoma, Robert Kappel

May 2008

German Institute of Global and Area Studies


Ugandan micro- and small enterprises (MSEs) still perform poorly. The paper utilizes data collected in Uganda in March and April 2003 to analyze the business constraints faced by these MSEs. Using a stratified random sampling, a sample of 265 MSEs were interviewed. The study focuses on the 105 manufacturing firms that responded to all questions. It examines the extent to which the growth of MSEs is associated with business constraints, while also controlling for owners’ attributes and firms’ characteristics. The results reveal that MSEs’ growth potential is negatively affected by limited access to productive resources (finance and business services), by high taxes, and by lack of market access.