The Business Linkage Promotion Programme is an initiative of a partnership comprising the Government of Uganda (GoU), development partners and the private sector. It is aimed at promoting the growth and survival of local businesses (SMEs) through capacity and capability enhancement on one hand, and improving the policy environment for Trans National Corporations (TNCs) to flourish on the other.
Comprising over 90% of Uganda’s private sector, SMEs are considered to be critical in accelerating economic growth through the expansion of productive jobs, tax revenue and export revenues, as well as through the reduction of the country’s import bill by substituting imports. Yet most of Uganda’s SMEs are generally not only unable to meet business standards required to deal with TNCs on such crucial competitive issues as price, quality and volumes, but are also wanting in governance standards. In spite of such limitations however, TNCs were found to be ready to upgrade business relationships with SMEs into long-term relationships, provided SMEs committed themselves to remedy shortcomings.
Intervention
The programme started in 2005 with assistance from Swedish International Development Agency (SIDA). The implementation of the programme was possible then because it was conceived as a fast-track vehicle for creating a dynamic SME sector, which represents the backbone of Uganda’s economy. Experience has shown that countries that facilitate the development of sustainable TNC-SME linkages can upgrade their local productive capacities and enhance their industrial performance by integrating their enterprises into global supply chains of large foreign firms.
Programme Objectives
The programme was formulated to nurture SMEs to meet international business standards and encourage TNCs to source locally from the SMEs instead of sourcing from foreign firms.
Achievements in the Implementation of the Programme
The programme started with six priority sectors in Uganda including among others; Agriculture, Telecommunications, Building/Construction, Real Estate Development, manufacturing and Petroleum oil and gas sectors. So far, over 10,000 farmers growing Sorghum, barley and food crops have enhanced their capabilities in production by being only linked to 3 TNCs in the agriculture sector. In other sectors i.e telecommunication, manufacturing and construction, tremendously improvement in operations of SMEs have been observed in various areas such as;
Some of the TNCs on the programme include: MTN Uganda linked to 5 SME in telecom technical areas; Uganda Breweries linked to 1500 sorghum farmers; ,Nile Breweries linked to over 4000 sorghum and barley farmers; Roofings linked to 3 SMEs; National Housing and Construction Company; Kinyara Sugar Works Ltd; Celtel Uganda; Toyota; Akright etc.
The programme is now targeting the Oil and Gas sector, preliminary discussions are on-going with both Neptune and Tullow. Road shows targeting potential and existing SMEs in the albertine region aimed at creating ready SMEs for the upcoming opportunities in the region are also on-going.
Comprising over 90% of Uganda’s private sector, SMEs are considered to be critical in accelerating economic growth through the expansion of productive jobs, tax revenue and export revenues, as well as through the reduction of the country’s import bill by substituting imports. Yet most of Uganda’s SMEs are generally not only unable to meet business standards required to deal with TNCs on such crucial competitive issues as price, quality and volumes, but are also wanting in governance standards. In spite of such limitations however, TNCs were found to be ready to upgrade business relationships with SMEs into long-term relationships, provided SMEs committed themselves to remedy shortcomings.
Intervention
The programme started in 2005 with assistance from Swedish International Development Agency (SIDA). The implementation of the programme was possible then because it was conceived as a fast-track vehicle for creating a dynamic SME sector, which represents the backbone of Uganda’s economy. Experience has shown that countries that facilitate the development of sustainable TNC-SME linkages can upgrade their local productive capacities and enhance their industrial performance by integrating their enterprises into global supply chains of large foreign firms.
Programme Objectives
The programme was formulated to nurture SMEs to meet international business standards and encourage TNCs to source locally from the SMEs instead of sourcing from foreign firms.
Achievements in the Implementation of the Programme
The programme started with six priority sectors in Uganda including among others; Agriculture, Telecommunications, Building/Construction, Real Estate Development, manufacturing and Petroleum oil and gas sectors. So far, over 10,000 farmers growing Sorghum, barley and food crops have enhanced their capabilities in production by being only linked to 3 TNCs in the agriculture sector. In other sectors i.e telecommunication, manufacturing and construction, tremendously improvement in operations of SMEs have been observed in various areas such as;
- Improved competitiveness of SMEs through technological, knowledge and management skills transfer and capital injection.
- Behavioural transformation as entrepreneurs display much higher commitment to fulfilment of contracts.
- Improvement in turnover and staff numbers.
- Increased domestic sourcing by TNCs and large local companies – import substitution.
- More quality jobs created and or preserved.
- Ability to attract commercial banks to provide credit and other financial products to SMEs.
- TNCs deeply getting rooted in the local economy.
- A more dynamic private sector.
- Increased capacity to attract Foreign Direct Investment.
Some of the TNCs on the programme include: MTN Uganda linked to 5 SME in telecom technical areas; Uganda Breweries linked to 1500 sorghum farmers; ,Nile Breweries linked to over 4000 sorghum and barley farmers; Roofings linked to 3 SMEs; National Housing and Construction Company; Kinyara Sugar Works Ltd; Celtel Uganda; Toyota; Akright etc.
The programme is now targeting the Oil and Gas sector, preliminary discussions are on-going with both Neptune and Tullow. Road shows targeting potential and existing SMEs in the albertine region aimed at creating ready SMEs for the upcoming opportunities in the region are also on-going.