Problems facing the informal sector in Uganda
- Inadequate capital required for business expansion due to low savings and incomes.
- Poor and inadequate infrastructural facilities. This is reflected in form poor transport network, lack of permanent premises for operation and poor storage facilities. This makes it difficult to carry out effective production of goods and services.
- Low levels of technology. This leads to the production of low output and of poor quality.
- Limited entrepreneurship skills. This is due to limited skilled manpower needed for business management and expansion.
- Limited markets for the products. This is due to low aggregate demand resulting from high levels of poverty in the country.
- Limited government support and lack of legal recognition by government. This leads to constant harassment by local authorities. For example city council agencies.
- Political instability in some parts of the country. This discourages people from setting up meaningful businesses due to fear of losing life and property.
- Limited access to credit facilities from formal banks arid microfinance institutions. This is due to lack of collateral securities.
- Inadequate supply of raw materials required in the production of goods and services. This forces some of them to import hence increasing the cost of production.
- High risks and uncertainties involved with investments in the informal sector. This is due to poor planning and lack of proper business plans which leads to’ high failure rates of business enterprises.
- 11. Stiff competition from both imported and locally manufactured This makes it difficult to market the products.
CATEGORIES Economics
TAGS Dr. Bbosa Science
