Performance and Survival of Ugandan Manufacturing firms in the context of the East African Community

Using the most recent enterprise survey data of the World Bank(2006), this paper investigates the factors influencing firm performance and survival after the promulgation of the East African Community (EAC). The major findings of the paper include: (i)The EAC has adversely affected the survival of small and young firms; (ii) large manufacturing firms are consolidating their position in the EAC market by exploring the increased market size and information technology to increase their output and value added per worker; (iii) Exporters, especially to the advanced markets, have a higher chance of survival compared to the non-exporters. It was also evident that firm size, age, ownership, and business experience of the manager do significantly influence the firm’s performance. Government policies should aim at improving the macroeconomic environment in which manufacturing firms operate so as to reap the benefits of the EAC and increase the chances of firm survival. Specifically, there is need for government policy to create more industrial parks, solve the problem of electricity power outages, and encourage the penetration of information technology across the country.