Kampala, Uganda | Julius Businge | Absa Bank Uganda and International Finance Corporation, a member of the World Bank Group, have partnered to train over 300 Ugandan small and medium-sized enterprises to help them assess business risks, adapt their business models, and navigate the difficult operating environment caused by COVID-19 pandemic.
The training according to a media release distributed on Oct.21, held under the Absa SME Academy platform, is in response to the current economic climate and the impact of COVID-19 on SMEs.
Mumba Kalifungwa, the managing director Absa Bank Uganda said COVID-19 pandemic has left a significant impact on Uganda’s SMEs, with nine out of ten businesses reporting an increase in operating expenses, 38% of micro-businesses reporting no access to inputs, and overall, 83% of businesses reporting a decline in the demand for their products, all of which have affected their cost of doing business.
A recent report on the impact of the COVID-19 pandemic on Ugandan MSMEs by the United Nations Capital Development Fund stated that recovery for most businesses affected by the COVID-19 pandemic is expected to take more than three months and possibly until the end of the year.
Approximately, 70% of businesses evaluated estimated their recovery time to last more than three months, while 26% envisaged a recovery period of one to three months.
Industries with the longest period of recovery include accommodation and catering (58%); production and supply of utilities (54%); real estate (54%); financial industry (44%); and manufacturing (41%).
The SME Academy will train the directors and proprietors of the Ugandan SMEs in financial-related courses led by IFC-certified trainers, helping the SMEs build their capacity to thrive in the current uncertain business environment.
The initiative was introduced in 2019 as an avenue for Absa to help businesses address their challenges and improve their skills, such as business management, planning and governance.
Moses Manuel, the IFC country manager for Uganda said supporting smaller businesses is a strategic priority for IFC in Uganda and across Africa, a focus that has become even more critical since the onset of the COVID-19 pandemic.
“Our partnership with Absa Bank Uganda is designed to strengthen the Ugandan SMEs and therefore, strengthen the wider Ugandan economy,” he said.
According to Uganda Investment Authority, the Micro, Small, Medium, Enterprises are the engine for the economic development, innovation, wealth creation of Uganda.
They are spread across all sectors with 49% in the service sector, 33% in the commerce and trade, 10% in manufacturing and 8% in other fields.
Over 2.5 million people are employed in this sector, where they account for approximately 90% of the entire private sector, generating over 80% of manufactured output that contributes 20% of the gross domestic product (GDP), the UIA says.