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Academicians Retooled on the System of Environmental-Economic Accounting (SEEA)

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By Jane Anyango

Over 30 members of the academia comprising staff and graduate students from Makerere University School of Economics, Muni University and Makerere University Business School  on 28th September, 2021 converged for a training on the System of Environmental-Economic Accounting (SEEA).

The blended seminar held physically and virtually was organized by the Environment for Development Initiative (EfD-Mak) Centre facilitated by the Makerere University don, who is also Research Fellow at the EfD-Mak center and Fulbright Scholar Dr. Nickolas Kilimani.

Dr. Kilimani streamed live from the USA on the System of Environmental-Economic Accounting focusing on the Integrated Water Resources Management, Policy Analysis and Decision making.

Dr. Kilimani highlighted the recent developments in Environmental-Economic Accounting in Uganda, the System of Environmental-Economic Accounting  and its objectives, Water resources accounting modules and the role of Water Accounting in Integrated Water Resources Management (IWRM).

Dr. Kilimani observed that the national economic policy has been underpinned by macroeconomic theory and the necessary statistics are collected and arranged using the System of National Accounts (SNA) which covers all economic activity from production to consumption and accumulation, and all industries using the Gross Domestic Product (GDP) as the key indicator.

He noted that the basic theoretical foundation of the SNA has not changed since 1953 even with the detail that has evolved with technological, economic and social change adding that, for more than 70 years, governments and business have used the information from the SNA as an information source in economic analysis and policy.

Dr. Nicholas Kilimani delivers his training on SEEA online
Dr. Nicholas Kilimani delivers his training on SEEA online

“The SNA does not adequately account for the environment and yet economic activity can adversely drive both observed and unobserved changes in it. The System of Environmental-Economic Accounting (SEEA) aims to address the deficiency of the traditional national accounting (the SNA) by accounting for the environment and linking it to environmental information through common concepts, definitions and classifications” Dr. Kilimani stated.

Compared to the SNA, Kilimani said, the SEEA is not yet widely used in decision making, partly because, it has recently been adopted as an international standard.

Dr. Kilimani said the objectives of SEEA are to develop a consistent data system for economic and environmental data and provide a common system to derive indicators and measure sustainable development. 

He explained that the SEEA provides a better measure of national wealth to include not only produced capital but also natural capital,  and assesses availability of natural resources, their use in production and final consumption and the cost of depletion. In addition  Kilimani said, SEEA assess the level and cost of emissions and other waste from production and consumption and identifies monetary flows related to the environment which are already within the SNA (e.g., expenditures on environmental protection, environmental taxes and subsidies,etc.)

Dr. Kilimani underscored the role of Water Accounting in Integrated Water Resource Management (IWRM) noting that the growing pressure on water resources and high uncertainty on future water availability have caused the urgent need for better planning and management.

He emphasized that water is not only essential to cover basic needs for humans and the environment that underpins them, it is also a key factor for the economic development of diverse sectors with conflicting interests as regard to its use.

A dual view of Physical participants in the Makerere University EfD Conference Room (L) interacting with Dr. Nicholas Kilimani (R) live from the US.
A dual view of Physical participants in the Makerere University EfD Conference Room (L) interacting with Dr. Nicholas Kilimani (R) live from the US.

“The IWRM paradigm is considered a good approach to deal with those complexities. It proposes a coordinated utilization of water and land resources to support economic and social development without compromising environmental sustainability.

It recognizes that water management is a key aspect since human intervention is the trigger for all trade-offs and conflicts around water. IWRM highlights the influence of catchment management on water resources quantity and quality, as well as the need to preserve the natural capital for future generations.” He added.

Dr. Kilimani said Water management is considered a social, economic, and political issue rather than just technical and therefore, stakeholder involvement in water management is needed and this translates into legal requirements for public participation and transparency in water governance.

“The value of water, the opportunity costs of its allocation, or the costs of making it available should be known and recognized in order to incentivize water use efficiency. The implementation of those legal requirements calls for making information about water publicly available in a clear and accessible way. In this sense, water accounting emerges as a useful tool to promote efficiency and transparency in water resource planning and management”, Kilimani stated.

The current and proposed framework for IWRM in Uganda

Dr. Kilimani said the existing institutional and policy framework shows the multiple institutions charged with the management of water resources in Uganda, but, there is a need for an explicit connection between water sector policies and those of the social-economic sectors, since water resources are a key input into the country’s economic and social sectors.

Participants pose for a group photo with EfD-Mak Centre Director Prof. Edward Bbaale after the seminar.
Participants pose for a group photo with EfD-Mak Centre Director Prof. Edward Bbaale after the seminar.

“The institutional framework in Uganda, provides for a key component such as Water for Production. Institutions in charge of managing the productive sectors of the economy, i.e., MoFPED, (MAAIF), and the MTTI need to link their development plans and policies with those of the water sector.  A sound national water policy should relate the different development plans of the social-economic sectors in an explicit manner”. Kilimani said.

In the (2015) paper, Dr. Kilimani and other researchers proposed a framework for policy analysis which relates the development plans for the different social-economic sectors to those of the water sector.

This framework he said is aimed at providing policy analysis of IWRM in a typical economy by linking e.g., agriculture, industry, households, hydro-electricity and navigation which are key sectors that primarily depend on water.

The don explained that development plans in these sectors involve several policy variables and inputs. Therefore, the interaction between the policy variables and their impacts are monitored through multiple indicators in the social-economic and ecological domains.

“Given the multiplicity of variables, the SEEA framework uses aggregated water data as do the existing approaches for analyzing the associated policy impacts.

Some of the female graduate students that attended the training listen to proceedings.
Some of the female graduate students that attended the training listen to proceedings.

Computable general equilibrium (CGE) models also use aggregation and hierarchical decomposition in order to simplify model development and data compression to manageable sizes.

While the aggregation hides some of the temporal and spatial variability, it still preserves the fundamental trends that help to provide needed answers by policy-makers”, Kilimani said.

SEEA, a new area of interest to academicians and the Government of Government

The Director EfD-Mak Center Prof. Edward Bbaale described  the seminar  as the most exciting because it brought on board a new area which is of interest to the Government of Uganda.

Prof. Bbaale said, Uganda Bureau of Statistics, the National Planning Authority and other partners are trying to work on the system of Environmental-Economic Accounting away from the conventional system of National Accounting.

“Our System of National Accounting is deficient in incorporating Environmental aspects because as we produce and consume, then in one way or another, we are depleting the environment which we refer to as natural capital and this natural capital is all the time depreciating but there is no way in our conventional GDP measurements that, but now, this new system is solution to this”, Prof. Bbaale stated.

From the academic perspective, Prof. Bbaale commended the facilitator for showing participants   how to undertake the System of Environmental-Economic Accounting and ably bringing participants on board in terms of the key variables that are important in this new system specific to the water sector.

A section of staff and graduate students that attended the seminar
A section of staff and graduate students that attended the seminar

The  Director appreciated Dr. Kilimani for exposing  participants to the policy,  non-policy and  the output variables and giving tips on some methods such as the Computable general equilibrium (CGE) which can be utilized to understand the impact of a policy decision on the rest of the economy in terms of the social, economic and environmental outcome.

“The lesson here is that we need to invest our time into understanding this new System of Environmental-Economic Accounting as a way of incorporating new ventures in our research as economists and academicians. And to our graduate students, this is an area worthy of investing their time and I am glad that a number of graduate students attended this seminar”, Prof. Edward Bbaale said.

Prof. Bbaale said, a number of reports are already out and that SEEA is an area which is very virgin, where very limited research has been undertaken partly because of lack of numbers that incorporate the environment into the entire national analysis.

“But now, some strides have been taken, some milestones are being achieved and if our own, Dr. Nickolas Kilimani with a Fulbright Scholar in the US is having all these on his fingertips, it is a huge resource to Makerere University, to our country and it is a starting point of deeper analysis into how the environment is being affected when we are doing our production and consumption   activities”, Prof. Bbaale said.

He reported that the seminar was quite intriguing and important for national policy and pledged to arrange to involve policy makers from the Ministry of Water and Environment and the National Water and Sewerage Corporation in the next seminar.

Participants comment on the seminar

Makerere University PhD student from the School of Economics Alex Aliga, who is also a lecturer at Muni University Uganda said the seminar was timely.

“It has enriched many of the things that I had learnt in class and I had taken for granted. The System of Environment and Economic Analysis though new is very important and interesting because once you begin to understand Natural Resource Accounting and integrate it into GDP, then we get to understand the full value of our resources. In that case, it means that we may actually be richer than what we thought we are. Some of these things are not easy to bring to the GDP which is the measure of our national economy.

Some of the graduate students and staff from Muni University that attended the seminar.
Some of the graduate students and staff from Muni University that attended the seminar.

I got many lessons; – understanding how you can apply the theoretical things into practical and to influence policy is very important for our country. Given the fact that our resources are under attack, climatic change and environmental issues are real, we need this knowledge so as to be able to sustainably use our resources for a better future”, Mr. Aliga said.

Dr. Paul Edabu, a Senior Lecturer at Muni University said:

“The day’s seminar was an eye opener to the current situation in Uganda bearing in mind that we have two blocks of people who are in accounts and economics and there is no integration even in our ministries.

Our country is at a paradox, today people are restricted to cut trees from the forests and also carrying out farming in the wetlands and the next day, a factory is erected in the wetland. This seminar is timely and something I had yearned to learn because it incorporates the environment as a key resource into the national accounting system”,  Dr. Edabu commented.

SEEA and the Government of Uganda

Government of Uganda (GoU) is moving towards resource-led industrialization by developing a set of natural capital accounts under the Uganda Natural Capital Accounting (NCA) program. The National Biodiversity Strategy and Action Plan (NBSAP), National Development Plan, and Uganda Green Growth Development Strategy (UGGDS) recognize the challenges of development planning without accounting for its effect on natural resources, many of which are non-renewable.

In cognizance of the above, GoU with her development partner UNEP with its World Conservation Monitoring Centre arm is working with the Darwin Initiative to develop  Natural Capital Accounts for Uganda.

The project is aligned with existing initiatives on natural capital accounting, i.e., the Gaborone Declaration for Sustainable Development in Africa, the UN project on Natural Capital Accounting, and the World Bank Wealth Accounting and the Valuation of Ecosystem Services programme.

The Uganda Bureau of Statistics (UBOS) Ministry of Water and Environment, and Ministry of Lands, Housing and Urban Development commenced with the development of land accounts and Water accounts in 2019.  Under the NCA program, the country launched the Wood Asset and Forest Resources Accounts.

Natural Capital Accounting effort is based on the international statistical standard, System of Environmental-Economic Accounting (SEEA).

Jane Anyango is the Principal Communication Officer, College of Agricultural and Environmental Sciences (CAES)

Mark Wamai

Business & Management

PIM Centre Makerere, Graduates Second Cohort of Certificate in Financial Implications – Integrated Regulatory Cost-Benefit Analysis

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Seated: Mr. Paul Mwanja (Centre), Prof. Ibrahim Mike Okumu (2nd Left) and Dr. John Sseruyange (Right) with trainers at participants in Jinja on 5th September 2025. Ministry of Finance, Planning and Economic Development (MoFPED), in partnership with the Public Investment Management Centre of Excellence (PIM CoE), Makerere University, Kampala, successful completion of two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. September 5 2025, Pearl on the Nile Hotel, Jinja, Uganda, East Africa.

Jinja, September 5, 2025 

Thirty-one government officers from Ministries, Departments, and Agencies (MDAs) have successfully completed a two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. The certification ceremony was held at the Pearl on the Nile Hotel, Jinja, marking another milestone in Uganda’s efforts to institutionalize evidence-based and fiscally responsible policymaking.

The training, delivered by the Makerere University Public Investment Management (PIM) Centre of Excellence in partnership with the Ministry of Finance, Planning and Economic Development (MoFPED), and National Planning Authority equipped participants with practical skills to evaluate policy and legislative proposals for their financial, economic, and social implications.

Mr. Paul Mwanja. Ministry of Finance, Planning and Economic Development (MoFPED), in partnership with the Public Investment Management Centre of Excellence (PIM CoE), Makerere University, Kampala, successful completion of two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. September 5 2025, Pearl on the Nile Hotel, Jinja, Uganda, East Africa.
Mr. Paul Mwanja.

Speaking at the closing ceremony, Mr. Paul Mwanja, Commissioner for Infrastructure & Social Services at MoFPED, who represented the Permanent Secretary, commended the officers for their commitment at a time when government institutions are finalizing the Auditor General’s audits, implementing the FY2025/26 budget, rolling out the National Development Plan IV’s tenfold growth strategy, and preparing for the 2026 General Elections.

“Your participation affirms a collective commitment across Government to strengthen the quality, transparency, and credibility of public policymaking in Uganda,” Mr. Mwanja said. He urged graduates to return to their institutions as champions of reform, share their knowledge with colleagues, and drive the change needed in Public Finance Management. He also announced that the next cohort of the training will take place in January 2026.

Prof. Ibrahim Mike Okumu. Ministry of Finance, Planning and Economic Development (MoFPED), in partnership with the Public Investment Management Centre of Excellence (PIM CoE), Makerere University, Kampala, successful completion of two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. September 5 2025, Pearl on the Nile Hotel, Jinja, Uganda, East Africa.
Prof. Ibrahim Mike Okumu.

Prof. Ibrahim Mike Okumu, Dean of the School of Economics at Makerere University, delivered the graduation address, highlighting the certificate’s importance in addressing Uganda’s triple challenge of scale, scarcity, and speed.

“This program does something unique. It teaches you not only to ask whether a policy or project is beneficial, but also whether it is affordable and resilient under real fiscal constraints,” Prof. Okumu noted. He challenged graduates to apply their skills at project, portfolio, and policy levels—ensuring value for money and enhancing public trust in government spending.

Participants make a group presentation. Ministry of Finance, Planning and Economic Development (MoFPED), in partnership with the Public Investment Management Centre of Excellence (PIM CoE), Makerere University, Kampala, successful completion of two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. September 5 2025, Pearl on the Nile Hotel, Jinja, Uganda, East Africa.
Participants make a group presentation.

He further emphasized that Uganda’s pioneering approach to integrated CFI-CBA positions the country as a leader in Africa and beyond: “You, Uganda’s first CFI-CBA graduates, are now part of a global brain trust. Your work will speak to investors, parliaments, development partners, and above all, the Ugandan people.”

Dr. John Sseruyange, Manager of the PIM Centre of Excellence, expressed appreciation to participants for their active engagement throughout the training and thanked MoFPED and the faculty drawn from Makerere University, the National Planning Authority, Ministry of Finance, and the Ministry of Energy for their technical support.

Dr. John Sseruyange. Ministry of Finance, Planning and Economic Development (MoFPED), in partnership with the Public Investment Management Centre of Excellence (PIM CoE), Makerere University, Kampala, successful completion of two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. September 5 2025, Pearl on the Nile Hotel, Jinja, Uganda, East Africa.
Dr. John Sseruyange.

The Certificate of Financial Implications – Integrated Regulatory Cost-Benefit Analysis was introduced following the Revised Guidelines for Financial Clearance, effective July 1, 2025. The guidelines require MDAs to prepare their own financial implications statements, subject to rigorous cost-benefit analysis, thereby strengthening linkages between fiscal responsibility and regulatory impact assessments.

With the successful completion of the second cohort, Uganda is steadily building a critical mass of professionals capable of embedding cost-benefit thinking across government, ensuring every shilling delivers maximum impact for citizens.

A female participant receives her certificate. Ministry of Finance, Planning and Economic Development (MoFPED), in partnership with the Public Investment Management Centre of Excellence (PIM CoE), Makerere University, Kampala, successful completion of two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. September 5 2025, Pearl on the Nile Hotel, Jinja, Uganda, East Africa.
A female participant receives her certificate.

A male participant receives his certificate. Ministry of Finance, Planning and Economic Development (MoFPED), in partnership with the Public Investment Management Centre of Excellence (PIM CoE), Makerere University, Kampala, successful completion of two-week intensive training in the Certificate of Financial Implications (CFI) – Integrated Regulatory Cost-Benefit Analysis. September 5 2025, Pearl on the Nile Hotel, Jinja, Uganda, East Africa.
A male participant receives his certificate.

Betty Kyakuwa
Betty Kyakuwa

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PIM Centre of Excellence Steering Committee Charts Way Forward

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Members of the PIM CoE Steering Committee pose for a group photo during their meeting on 4th September 2025. Public Investment Management Centre of Excellence (PIM CoE) Makerere University Steering Committee meeting, 4th September 2025 at Mestil Hotel, Kampala Uganda, East Africa.

The Public Investment Management Centre of Excellence (PIM CoE) at Makerere University held its Steering Committee meeting on 4th September 2025 at Mestil Hotel in Kampala. The session, attended by all members, focused on reviewing progress, reflecting on achievements from the past financial year, and charting the way forward for the Centre.

About the PIM Centre of Excellence

The PIM CoE was established in March 2022 at Makerere University’s College of Business and Management Sciences (CoBAMS), in partnership with the Ministry of Finance, Planning and Economic Development (MoFPED). Its purpose is to strengthen Uganda’s public investment management system through training, research, and advisory services.

The Steering Committee plays a critical role in oversight, review, coordination, and advisory functions, guiding the Centre’s work and ensuring that public investment processes align with national development priorities.

Dr. Joseph Muvawala. Public Investment Management Centre of Excellence (PIM CoE) Makerere University Steering Committee meeting, 4th September 2025 at Mestil Hotel, Kampala Uganda, East Africa.
Dr. Joseph Muvawala.

Highlights from the Meeting

Speaking at the meeting, Dr. Joseph Muvawala, the Executive Director of the National Planning Authority, praised the October 2024 Annual PIM Conference for expanding perspectives on project design and delivery. He emphasized the importance of shifting from theory to practice in training, advocating for students and officials to engage with real-world projects. He also underscored the Centre’s new autonomy—transitioning from a subvention to a vote—which gives it greater independence but also demands stronger financial accountability. Dr. Muvawala further called for a permanent physical home for the Centre, noting that sufficient resources are available to make this possible and that negotiations with government are underway.

Mr. Ashaba Hannington, Director Budget at MoFPED, shared key achievements from the 2024/25 financial year. He noted that the Annual PIM Conference, organised jointly by MoFPED and the Centre, provided a vital platform for stakeholders to reflect on progress in public investment management.

Steering Committee Members and part of the Secretariat at the meeting. Public Investment Management Centre of Excellence (PIM CoE) Makerere University Steering Committee meeting, 4th September 2025 at Mestil Hotel, Kampala Uganda, East Africa.
Steering Committee Members and part of the Secretariat at the meeting.

Mr. Ashaba reaffirmed MoFPED’s commitment to working closely with the Centre to strengthen Uganda’s public investment capacity.

Prof. Eria Hisali (Left) and Mr. Hannington Ashaba (Right). Public Investment Management Centre of Excellence (PIM CoE) Makerere University Steering Committee meeting, 4th September 2025 at Mestil Hotel, Kampala Uganda, East Africa.
Prof. Eria Hisali (Left) and Mr. Hannington Ashaba (Right).

Prof. Eria Hisali, Co–Principal Investigator of the PIM CoE, outlined strategies to increase the Centre’s vibrancy and impact. He emphasized direct project engagement, advisory services, and peer reviews as ways to bridge the gap between theory and practice. Looking ahead, he revealed plans for a Master’s program in Economic and Investment Modelling, a Training of Trainers (ToT) initiative, and deeper practical capacity-building efforts.

Prof. Hisali also noted several successful trainings from the past year, including:

  • 46 staff from MDAs trained in Essentials of PIM.
  • 59 participants across two cohorts trained in Financial Appraisal and Risk Analysis.
  • 25 participants trained in Economic Appraisal and Stakeholder Analysis.

He proposed the introduction of a “trailer feasibility test” to evaluate whether completed projects deliver benefits as projected and to address optimism bias in project planning.

Dr. John Sseruyange (Centre) with Prof. Tonny Oyana (Left) and Ms. Alice Nakimbugwe (Right). Public Investment Management Centre of Excellence (PIM CoE) Makerere University Steering Committee meeting, 4th September 2025 at Mestil Hotel, Kampala Uganda, East Africa.
Dr. John Sseruyange (Centre) with Prof. Tonny Oyana (Left) and Ms. Alice Nakimbugwe (Right).

Dr. John Seruyange, Manager of the PIM CoE, highlighted the Centre’s growing regional footprint. Beyond Uganda, six central government officers from Somalia have been trained in Infrastructure Asset Management, generating further interest in advanced training from Somalia, Zimbabwe, and Somaliland. To position itself as a regional hub, the Centre is preparing a prospectus to market its courses across Africa and beyond.

Why It Matters

The Steering Committee reaffirmed its commitment to ensuring that the PIM CoE remains a leading think tank and capacity-building hub for government and regional partners. By improving the appraisal, financing, and implementation of public projects, the Centre is strengthening accountability, enhancing service delivery, and contributing to Uganda’s broader development goals.

Eve Nakyanzi
Eve Nakyanzi

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Dissemination Workshop: Government and Regulators urged to formalize the informal sector

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Prof. James Wokadala (4th Right) poses for a group photo with participants at the dissemination workshop on 29th August 2025. College of Business and Management Sciences (CoBAMS) and the Copenhagen Business School, in partnership with Uganda Small Scale Industries Association, dissemination workshop on Firm Formalization and Sustainable Development, 29th August 2025, CoBAMS Conference Hall, Makerere University, Kampala Uganda, East Africa.

On 29th August 2025, researchers from Makerere University College of Business and Management Sciences and the Copenhagen Business School, in partnership with Uganda Small Scale Industries Association disseminated the key findings and policy recommendations aimed at impacting both the informal and formal sectors in Uganda.

The dissemination workshop follows an intensive and participatory research project, which presents insights from a large scale study of over 1,100 small-scale firms across Uganda. Hosted at Makerere University, the dissemination workshop on Firm Formalization and Sustainable Development, brought on board key stakeholders including regulators, policy implementers, researchers, industry partners, the private sectors, manufactures, the academia, business men and women from the informal sector, and the media.

Approximately 90% of Small and Medium Enterprises (SMEs) in Sub-Saharan Africa operate in the informal sector. Uganda’s informal economy employs the majority of workers, but is characterized by low productivity and unsustainable practices. In Uganda, nearly 78% of the working population operate in the informal economy, spanning from street vendors to large unregistered businesses. Firms may choose to remain informal to hinder the accessibility of tax information, which consequently affects the government’s ability to mobilize domestic revenue. While informality provides livelihoods and informal firms may enjoy a significant degree of adaptability and flexibility, they typically face low productivity, limited worker protection, and environmentally harmful practices.

In 2022, an interdisciplinary team of scholars and practitioners embarked on research to examine the informal sector, gain a deeper understanding of the informal sector, as well as, its impact on sustainable development. The research team conducted field experiments and survey-based studies between 2022-2024 to evaluate the links between formalization and sustainable development.

Prof. Faisal Buyinza. College of Business and Management Sciences (CoBAMS) and the Copenhagen Business School, in partnership with Uganda Small Scale Industries Association, dissemination workshop on Firm Formalization and Sustainable Development, 29th August 2025, CoBAMS Conference Hall, Makerere University, Kampala Uganda, East Africa.
Prof. Faisal Buyinza.

Led by Prof. Marcus M. Larsen as the Principal Investigator, the research team consisted of the following the members: Prof. Faisal Buyinza-Local Principal Investigator, Dr. John Seruyange-Makerere University School of Economics, Dr. Ismail Kintu and Dr. Yusuf Kiwala-Makerere University School of Business, and Prof. Rebecca Namatovu-Copenhagen Business School. The research was funded by the Independent Research Fund Denmark.

“Our research shows that formalization can promote sustainable development, but outcomes differ by type: URA tax registration drives the most meaningful improvements in business, labour, and environmental practices, while URSB business registration mainly boosts legitimacy and local government licensing lags behind. To realize Uganda’s green and inclusive growth goals, formalization must be coupled with sustainability incentives, targeted reforms, and strong support from government, business associations, and civil society. From the policy perspective, the government needs to simplify the legitimization process through increased proximity of the registration centres for SMEs to leverage the benefits of formalization.”

Opening the dissemination workshop, the Principal of the College of Business and Management Sciences-Prof. Edward Bbaale represented by the Deputy Principal, Professor James Wokadala, emphasized the significance of the study in shaping Uganda’s development agenda.  He underscored that Makerere University is committed to undertaking research with partners to drive inclusive growth and sustainable economic development. The Deputy Principal noted that the interdisciplinary research team combining the global north and global south expertise, positions the College of Business and Management Sciences at Makerere University, to produce impactful research to influence policy and practice at the national and global levels.

Ms. Veronica Namwanje. College of Business and Management Sciences (CoBAMS) and the Copenhagen Business School, in partnership with Uganda Small Scale Industries Association, dissemination workshop on Firm Formalization and Sustainable Development, 29th August 2025, CoBAMS Conference Hall, Makerere University, Kampala Uganda, East Africa.
Ms. Veronica Namwanje.

Unpacking the key concept in the research project, Ms. Veronica Namwanje, the Director of Uganda Small Scale Industries Association (USSIA) explained that formalization goes beyond business registration. “Formalization is about strengthening enterprises to grow sustainably,” she articulated. Commending the partnership between USSIA and the School of Economics at Makerere University, Ms. Namwanje stated that this collaborative learning experience will strengthen SME’s in Uganda. “This research will significantly impact Uganda’s economy. 75% of the labour force is employed in the non-formal sector. The research will support over 12,000 member SMEs across Uganda,” she said.

Building on the remarks from the College Principal and the Director of USSIA respectively, the Moderator of the dissemination workshop, Dr. Anthony Tibaingana called upon the project Principal Investigator, Prof. Marcus Larsen from Copenhagen Business School, to present to the audience, the gist of the research on formalization and sustainable development.

Dr. Anthony Tibaingana. College of Business and Management Sciences (CoBAMS) and the Copenhagen Business School, in partnership with Uganda Small Scale Industries Association, dissemination workshop on Firm Formalization and Sustainable Development, 29th August 2025, CoBAMS Conference Hall, Makerere University, Kampala Uganda, East Africa.
Dr. Anthony Tibaingana.

Prof. Larsen commenced his presentation by acknowledging the Local Principal Investigator, Prof. Faisal Buyinza and Makerere University researchers in Economics and Business for their commitment and dedication. “This project started in 2022. You have worked with me wholeheartedly. Thank you for being true partners,” he remarked. Prof. Larsen explained that this research exposed him to the beautiful country called Uganda, its fine weather and hospitable people. As this particular research project comes to an end, he leaves Uganda and Makerere University with good memories, of working with people, committed to the transformation of society.

Setting the pace into his presentation that provided a strong case for formalization of business given its contribution to inclusive growth and development of any country, Prof. Larsen provided a comparison between the Global north where formalization is a norm.  “The Global North has zero tolerance for informal practices. In the Global North, you must be formally registered to operate a business,” he reported.

In the Global South, Prof. Larsen disclosed that the research studies proved that the number of firms under the informal sector was quite high. Through the research project, Firm Formalization and Sustainable Development in Uganda, they observed that many small scale businesses operate without any form of registration, from the Uganda Revenue Authority (URA) and the Uganda Registration Services Bureau (URSB).

With over 78% of the working population employed in the informal economy through numerous establishments (ILOSTAT, 2024), Prof. Larsen stressed that the situation in Uganda, necessitates a combined effort to ensure formalization of businesses/firms. He notified the audience about Sustainable Development Goal (SDG) 8.3, which encourages the formalization and growth of micro, small and medium sized enterprises. He also made reference to Uganda’s 4th National Development Plan, which states, and I quote: “This dual nature of informality contributes to low productivity, survival and growth of enterprises, as well as, limiting effectiveness of government policy incentives.”

Prof. Larsen argued that addressing high firm informality in the Global South through formalization can unlock growth, enable access to resources, spur sustainable development, drive inclusive growth, and contribute to the realization of Sustainable Development Goals (SDGs).

Examining SMEs and the environment, Prof. Larsen reported that the research findings indicated that that environmental issues are given less attention by SMEs. “Informal workers are particularly affected by and affect climate change. Most of the interactions proved that informal workers use environmentally unfriendly practices,” he stated. Prof. Larsen together with the research team advocated for a transition to formalization of firms, which leads to environmental sustainability with decent workers.

Prof. Marcus Larsen presenting the research insights. College of Business and Management Sciences (CoBAMS) and the Copenhagen Business School, in partnership with Uganda Small Scale Industries Association, dissemination workshop on Firm Formalization and Sustainable Development, 29th August 2025, CoBAMS Conference Hall, Makerere University, Kampala Uganda, East Africa.
Prof. Marcus Larsen presenting the research insights.

The research team observed that informal workers suffer from job insecurity, and in most cases, their employers do not remit their social protection funds. For instance, in Uganda, most of the workers in the informal sector did not have any contributions with the National Social Security Fund (NSSF).

Presenting the key research insights, Prof. Larsen focused on the formalization and practices, interpretation for policy makers, and SME survival and sustainability. Formalization and Practices provided hints on URSB (business registration), URA (Tax Registration) and Local Government (Trading Licenses).

Providing the interpretation for policy makers, Prof. Larsen elaborated as follows: URSB formalization mainly signals legitimacy, but has limited impact on deeper practices; URA formalization, though resisted initially, delivers the strongest and broadest improvements in business, worker and environmental practices once firms adopt it; and Local government licensing is associated with negative or weak outcomes indicating a need to reform systems to better incentivize sustainability.

On SME Survival and Sustainability, the key research insights include the following:

Financing: MSMEs that started with external financing were 12% more likely to survive than those using internal funds.

Gender: Male owned MSMEs had a higher survival rate (+13%) due to greater access to resources, though firms owned by females reported stronger sustainability orientations.

Location: Urban-based firms had 10-20% higher survival than rural firms, though rural enterprises displayed higher sustainability practices overall.

Education: Owners with university education had survival rates 17 to 24% higher than those with primary schooling.

Business associations: Female-owned MSMEs in associations had 13 to 16% higher survival rates

Registration effects: Surprisingly, longer registration with URA/URSB was associated with slightly lower survival rates (1 to 4%), pointing to burdens of compliance.

The Local Principal Investigator, Prof. Faisal Buyinza, advocated for multi-faceted policies to empower SMEs in Uganda for instance, through simplifying registration, providing green tax incentives, protection of workers and guarding against counterfeit products.  Prof. Buyinza presented the following policy recommendations:

  • Raising sustainability standards in business formalization
  • Building green and fair fiscal systems
  • Strengthening social protection and green employment
  • Enhancing entrepreneurial skills for sustainability
  • Promoting youth and ago-led green innovation
  • Advancing women’s leadership in sustainable enterprises
  • Digital transformation for green formalization
  • Civil society and employer advocacy for just transition

The participants delved into an interactive question and answer session moderated by Prof. Eria Hisali, former Principal of the College of Business and Management Sciences, who provided strategic guidance and oversight at the inception of the research project.

Prof. Eria Hisali. College of Business and Management Sciences (CoBAMS) and the Copenhagen Business School, in partnership with Uganda Small Scale Industries Association, dissemination workshop on Firm Formalization and Sustainable Development, 29th August 2025, CoBAMS Conference Hall, Makerere University, Kampala Uganda, East Africa.
Prof. Eria Hisali.

Prof. Hisali called upon the participants and key stakeholders to contribute to the discussion, when he said: “The informal sector is not abstract. The informal sector is with us. I therefore call upon you to share lived experiences and practices on this matter.”

Taking on the form of a plenary, the following ideas were raised:

  • Financial constraints are a major blow to SMEs. This is further complicated by the payments required through registration, licensing, taxation, and other formalization processes including the high cost for online operations that require access to the Internet.
  • Power outages in Uganda significantly affect business operations. When power is on and off, SMEs incur losses due to the nature of their activities.
  • URA has a close working relationship with Uganda Small Scale Industries Association (USSIA). This partnership should be leveraged to reach out to business owners in the informal sector.
  • The government should provide tax incentives to local investors. This incentive will positively impact formalization of businesses.
  • URBS should come up with tough measures on standards in order to safeguard Ugandans from counterfeit products.
  • URA and URSB should note that majority of players in the informal sector are not educated, and, as such, should come up with specialized awareness programmes delivered in a language that they can understand.
  • Noting that despite the benefits of formalization, entrepreneurs fear to formalize their business, those concerned should invest time and resources to identify the reasons behind this attitude.
  • Create awareness by deliberately popularizing the benefits of formalizing a business, and the incentives that accrue to someone who has formalized his or her business.
  • Commending the stakeholder mapping and segmentation with respect to policy recommendation, the participants requested for the involvement of the Ministry of Gender, Labour and Social Development.
  • Tackling the policy recommendation on digital transformation, the participants recommended the involvement of NITA-Uganda.
  • Formalization of businesses and registration is affected by the high cost of Internet services and subscriptions. The participants reported that the high costs of Internet deter online operations.

Reflecting on the ideas raised during the plenary sessions, Prof. Hisali observed differences in the level of awareness regarding business formalization. He called upon the Uganda Small Scale Industries Association and Makerere University to continue the discussion with key stakeholders to conduct periodic awareness creation and training sessions.

On a positive note, the participants and stakeholders were notified that URA was in advanced stages of according tax holidays to SMEs. Prof. Faisal Buyinza, who interacted with URA, during the course of the research project (2022-2024), highlighted that effective July 2026, start-up business up to UGX 300million, will not be taxed. Such start up business, will enjoy a tax holiday of three years.”

The submission from Prof. Faisal Buyinza was supported by officials from URA who were physically present in the dissemination workshop held in the Conference Hall, at the College of Business and Management Sciences, Makerere University.

The participants were thoroughly engaged during the dissemination workshop, which entailed remarks from the College Principal, presentation by USSIA, project purpose and findings, research presentation, policy implications, question and answer session, and final reflections.

Ritah Namisango
Ritah Namisango

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