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Accountants urged to assist SMEs in switching to formal operations
Traders with their merchandise operating along Luwum street on July 14, 2020. Photo | File
What you need to know:
- Derick Nkajja, CEO of ICPAU, emphasised the importance of prioritising productive sectors for sustainable development.
Professional associations like CPA have been requested to assist Micro, Small and Medium Enterprises (MSMEs) to formalize their businesses to drive growth and economic development.
Speaking at the 12th CPA Economic Forum on Friday, Mr Joseph Enyimu, the Ministry of Finance's Commissioner for Economic Development, Policy, and Research Department, stressed the significance of formalisation.
"The lack of professional associations like for accountants is a major reason for the backlog of cases, particularly from the unorganized sector, which accounts for only 53 per cent of GDP," Mr Enyimu said. "We need to influence business owners' decisions, recognize the benefits of formalization, and support economic expansion."
Mr Enyimu noted that investors in Uganda are seeing a positive return on investment, with the return on domestic investment growing from 12 per cent in 2016 to 14 per cent in 2022. However, he stressed that more work is needed to accelerate this trend.
"Professional associations like CPA have a crucial role to play in influencing business owners' decisions. We need to recognize the benefits of formalization and halt the growing trend of informality," he said.
The marginal cost of borrowing from abroad decreased from 11.4 to 7.2 percent during the same period, according to Enyimu, and the average return on savings rose from 6.5 to 7.5 per cent.
Derick Nkajja, CEO of ICPAU, emphasised the importance of prioritising productive sectors for sustainable development.
"The government has consistently emphasized the promotion of productive sectors through National Development Plans, as they have proven to be potential generators of household income and employment opportunities," he said.
The forum aimed to showcase innovative methods for growing and utilising the potential of productive sectors, with a focus on areas like SME promotion, manufacturing, vocational training, and transportation infrastructure.
"We need to work together to meet the Sustainable Development Goals by 2040," Mr Nkajja said. "The accounting body is interested in areas like SME promotion, tax laws and practices, and fraud and corruption."
