Kampala’s Small-scale Industries: an Empirical Investigation of Investments in the Manufacturing Sub-sector

Abstract

This is a study on investments, in Kampala's small scale industries. The study concentrates on metal work- and woodwork activities of the manufacturing scale industries. A survey questionnaire was used to collect data in Kampala area lone. Besides verbal interviews were held in liaison with relevant government organs on the financial set-up of Uganda as it relates to small scale industries. An investment determination model was developed from existing literature and the model was estimated using 2SLS. The significant variables in the general model are output, credit and training. Significant variables in the metal work activity are output, income and savings while those of the woodwork are output and credit. The financial set up in Uganda was found to be strangling and less accommodative to the small scale industry sector. The SSI was found to be the largest employer of Ugandans and capable of generating employment faster than the large scale sector. .Several recommendations are prescribed which include formation of co-operatives among SSI, government involvement in the marketing of SSI products, encouraging subcontracting to large scale firms, increased training and revision of local laws to become more regulatory other than control of SSI.