Transcript ENTERPRISE UGANDA - Makerere University

UN ECONOMIC
COMMISSION FOR AFRICA
SME BUSINESS LINKAGES:
KEY LEARNINGS FROM UGANDA
ADDIS, ETHIOPIA, 17-18 NOV. 2011
THE CONCEPT
A supplier development program that
upgrades MSME suppliers and increases their
competitiveness and sustainability;
A pro-poor business model that creates
mutually beneficial business linkages between
MSME producers and large local and TNCs;
Piloted on 5 sectors ; Agribusiness, Real
estate, Telecom, Services, and Manufacturing
with National BDS Agency and Investment
Centre and joint implementers.
APPROACH
Target large companies and TNCs of repute;
Together with TNC, Identify SME suppliers;
Carry out Business Health Check (BHC) on SMEs;
Basing on BHC, offer tailored BDS to the SMEs;
Basing on TNC’s strategy, produce SMEs business
plans to assist TNC achieve their Strategies;
Let TNC coach and mentor SME partners and
develop them to meet required standards.
Identify policy issues that need to be addressed
to enhance robustness of BL.
PROJECT IMPACT
Behavioral transformation of SMEs
reflected in adherence to contracts;
Improved business management control
systems;
Increased sales turnover of 100% to
300% within two years;
Two to three fold rise in employment;
Increased access to financing; market
information; technical assistance and
markets.
CHALLENGES
Internal – operational challenges.
External – Inadequate policies.
Local content - outsourcing;
Taxation;
Infrastructure;
Capacity Building.
CRITICAL SUCCESS FACTORS
Significance of the economic sectors selected;
Involvement of a credible BDS provider;
Existence of reputable corporates that value ethical way
of doing business and respect canons of corporate
governance;
Conducive business environment that allows investment
in and nurturing of long-term business partnerships;
Robustness of the banking and financial sector;
A well managed publicity campaign.
KEY LEARNINGS
Importance of harmonisation of private sector
development policies, programmes and
institutional framework;
In LDCs business linkages are can be long and
painful, requiring a strong institutional support
mechanism to address multifaceted dimensions
necessary for their success;
The cost of and expertise required for creating
linkage-ready SMEs in developing countries
cannot be wholly found in or accommodated by
TNCs in today’s global village.
KEY LEARNINGS
SMEs are capable of learning best practice in
standards and business management but just
need a strong reason to do so on long-term
basis;
Business Linkages can be a fast truck way of
introducing SMEs into mainstream banking and
keeping them there;
There are many TNCs that are willing to work
with SMEs but just do not understand what it
takes to make SMEs dependable partners.
Thank You