Market assessment of services for IT and ITES companies in Uganda

Value chain analysis

Published by
CBI Ministry of Foreign Affairs

An overview of the IT service and IT enabled service (ITES) market system in Uganda. It aims to identify critical root causes that prevent Ugandan IT and ITES companies from entering the EU market.

The assessment not only covers the core value chain but also assess the enabling environment to then uncover what kind of Business Development Services (BDS) will be required to assist firms on their export journey.

On the rules and regulations, the EU sets legal protection of computer programs by copyright and protects the personal data of people using online services. Several European buyers require companies to have quality management standards, such as ISO 9001 or CMMI. There are also other Ugandan legal aspects, such as the ban on importation of second-hand ICT equipment, over-the-top tax on social media and challenging requirements to assess government tenders that affect Ugandan business.

Four essential Supporting Functions were identified:

  1. Infrastructure (connectivity) such as access to internet and broadband, access to software and hardware, reliable power, and mobile phone penetration.
  2. Access to Finance, constrained by no acceptance of intangible assets, highly volatile cash flows, lack of short- and medium-term loans for capital expenditures and low investment readiness.
  3. Skills & Capacity which shows a sizeable tech-savvy workforce but lack of managers with general business as well as eBusiness and eTrade management skills.
  4. A well-functioning market for Business Development Services forms the fourth critical supporting function.

The report undertakes an analysis of the subsequent market system itself. Many of the identified root causes stem from the lack of tailored and affordable business support services. Thus, the report concludes by providing some guidance on how Ugandan Business Support Organisations (BSOs) could improve their BDS portfolio and develop new services tailored to the needs of the sector.