The purpose of the study was to investigate the role of privately owned enterprises on economic development of Masaka City. The study was based on the findings from 290 respondents out of the sample size of 310 respondents. 290 respondents presented results that were accurate basing on the objectives of the study. To assess the contributions of privately owned enterprises on the economic development of Masaka City, to analyze the characteristics of privately owned enterprises in Masaka City, to identify the challenges faced by privately owned enterprises in Masaka City. Data was collected from the business people in Masaka City. The findings of the study in this report showed that majority of the respondents strongly agreed that privately owned enterprises would lead to the economic development of Masaka City. The findings of the study presented results indicating that 60% of the respondents informed the researcher that whole sale and retail was one of the major characteristics of privately owned enterprises followed by 30% of the respondents who informed the researcher that another characteristic of privately owned enterprises was that they take risks and finally 10% of the respondents informed the researcher that privately owned enterprises pay all the taxes. There was also a need to for the government to provide financial Aid to the privately owned enterprise owners in order to boost their businesses.