The implementation of business policy reforms in East Africa remains a critical yet under-diagnosed process, with significant gaps between formal legislation and on-the-ground entrepreneurial experience. Uganda serves as a salient case study, having enacted numerous policies aimed at improving the business climate over a sustained period. This study aims to critically diagnose the implementation gap affecting Uganda's business environment. Its objectives are to quantify the perceived efficacy of key policies and to qualitatively explore the systemic barriers faced by micro, small, and medium enterprises (MSMEs) during implementation. A sequential explanatory mixed-methods design was employed. First, a survey of 450 registered MSMEs quantified perceptions across policy domains. This was followed by 24 in-depth, semi-structured interviews with entrepreneurs and 6 focus group discussions with sector associations to contextualise the quantitative data. Quantitatively, 68% of surveyed firms reported that licensing reforms had failed to reduce bureaucratic delays. Qualitatively, three dominant themes emerged: inconsistent enforcement by local authorities, a pervasive informality negating formal policy benefits, and a critical lack of post-registration support for business growth. The study concludes that Uganda's business environment is characterised by a significant implementation deficit, where policy design is consistently undermined by systemic enforcement failures and an unsupportive operational ecosystem for MSMEs. Policymakers should shift focus from legislative change to implementation capacity, specifically by investing in local authority training, streamlining post-registration compliance, and establishing formal feedback mechanisms between MSMEs and regulatory bodies. Business environment, policy implementation, mixed methods, Uganda, MSMEs, regulatory reform This paper provides a novel diagnostic framework that integrates quantitative perception data with qualitative systemic analysis, offering a granular, evidence-based model for assessing policy implementation gaps in developing economies.