The Economic Policy Research Centre (EPRC), in partnership with the Ministry of Finance, Planning and Economic Development (MoFPED) on Thursday November 20, 2025, hosted a high-level policy dialogue in Kampala, convening stakeholders to discuss the persistent barriers to business formalisation in Uganda.
The dialogue, held at the Protea Hotel, called for a concerted national effort to address the challenge of informality, which currently dominates a significant portion of the country’s economy.
Dr. Sarah Ssewanyana, EPRC’s Executive Director, set the tone by emphasising the strategic importance of formalisation.
“Formalisation is not merely a matter of compliance, it is a strategic pathway for inclusive growth,” Dr. Ssewanyana stated. “By supporting enterprises to transition into the formal economy, we strengthen productivity and improve access to finance. Formalisation strengthens business growth and competitiveness, and in turn, enables Government to enhance domestic revenue mobilisation and deliver better public services.” She stressed that informality does not have to be the permanent Ugandan story, urging stakeholders to engage in honest reflections on the necessary changes to alter the current trajectory.
Factors of Production
Mr. Joseph Enyimu, Commissioner for Economic Development Policy and Research at MoFPED, delivered the keynote address. He called for a candid discussion, pointing out that informality severely limits the potential of key factors of production: land, capital, and labour.
Specifically addressing land, Mr. Enyimu highlighted its role in attracting sustainable investment. “Overlapping tenure systems create disputes and hinder effective land use as collateral,” he noted. “With insecure tenure, smallholders under-invest and avoid long-term leases or formal contracts, re-enforcing informality. This is critical given that agriculture accounts for over 40% of informal jobs.” He implored Ugandans to view business formalisation as the norm and a source of dignity.
The Paradox of Regulation
Dr. Emmanuel Erem, a Research Fellow at EPRC, presented the day’s research, which ironically demonstrated how the current regulatory environment is inadvertently driving the growth of informality. He noted that despite the government’s plan under the National Development Plan (NDP) III to reduce informality from 51% to 45%, the rate instead grew. The incoming NDP IV aims to reduce informality from 55% to 46% over the next five years.
Hon Beatrice Akello, the State Minister for Economic Monitoring, addressing participants at the dialogue.
Stakeholder Engagement
The panel discussion brought together diverse perspectives, including:
- Mr. Issa Ssekito: Chairman of the Kampala City Traders Association (KACITA)
- Mr. Enock Mutambi: Ministry of Gender, Labour and Social Development
- Mr. Nelson Mutatima: Microfinance Regulation Department, MoFPED
- Mr. Rogers Lubega: Uganda Retirement Benefits Regulatory Authority (URBRA)
The panel was moderated by Ms. Rehema Kahunde, a research analyst at EPRC. The subsequent plenary session facilitated discussions with a wide range of attendees, from small business owners to government officials.
Call for Action
Closing the dialogue, Hon. Beatrice Akello, State Minister for Economic Monitoring, Office of the President, applauded the EPRC and MoFPED for initiating the crucial conversation. She acknowledged that complex procedures, multiple fees, and high compliance costs are major deterrents for small entrepreneurs.
“When regulation is perceived as punitive or inaccessible, informality becomes the default choice for survival rather than a stepping-stone toward growth,” Minister Akello stated. She concluded with a clear mandate for the future: a call for “a regulatory framework that encourages productivity rather than stifles it; that promotes inclusion rather than exclusion; and that empowers rather than penalises.”
