The private sector is an area of production activities not mainly controlled by the government. It may include; the informal sector, farmers, the self-employed, from owned by both the local and foreign individuals, etc.

The Role of the Private sector

The private sector in Uganda is still significant as it performs a number of dominant functions.

The private sector employs the majority of the people in Uganda, thereby raising incomes and standards of living.

The sector contributes significantly to the Country's total national output (GNP).

It promotes the gradual growth of the economy since it stimulate entrepreneurship.

The private sector contributes to the growth, and modernisation of industry in the country, through the vigorous mobilisation of private savings, stimulating consumption among individuals, and increased investments.

It helps in the exploitation of the available domestic resource potential. This reduces excess capacity and wastage of resource utilization.

The sector uses local raw materials for the local requirements. This leads to a substantial reduction in the country's foreign exchange expenditure.

In Uganda, several private sector activities have been and are continuously being established. This increases the degree of competition and hence efficiency.

Government revenue from taxes is likely to increase, with the expansion of the private sector, that can pay the required taxes to the state.

The role of the private sector is commended as it tends to supplement the little government funds towards development.

The sector often, re-invests (ploughs back) profits. This helps to expand its existing productive capacity.

Technological development is enhanced as the sector tends to be innovative by adopting to new and efficient techniques of production to suit the ever changing consumer tastes and requirements.

The private sector can help to reduce the subsistence sector through the monetisation of the majority of the economy.

The tremendous expansion of the private sector is also instrumental in the development of the country's infrastructure.

Rural urban migration can be reduced with the development of the private sector activities. This is true if such activities are located in rural areas.

The private sector in Uganda is highly flexible. It can not only lead to the promotion of exports but also lead to the country's import substitution target.

It should further be noted that the sector is often characterised by a considerable degree of dedication.