Uganda is ranked one of the most entrepreneurial countries in the world.
According to the Global Entrepreneurship Monitor, 30% of Ugandans start businesses annually, dwarfing the United States of America and Japan, whose figures stand at only 7% and 11%, respectively.
But this is always short lived, with many Ugandan businesses (about 60%) failing to survive their first birthday.
To resolve this, several business experts have urged government to formulate a national start-up policy. This, they say, will protect Ugandan businesses from stiff competition from cheap imported products. They also say this will help them raise capital and provide them with incentives such as tax breaks to support their growth.
“These start-ups, if supported with conducive policies, will contribute to the tax base, which will in turn support economic and social development in Uganda,” Gideon Badagawa, the executive director of Private Sector Foundation Uganda (PSFU), said.
PSFU chairman Elly Karuhanga also supported this. “We are the most entrepreneurial country but businesses are collapsing. The time is ripe to address these issues so we can harness the potential of young people. New jobs, self-employment and family businesses can help absorb people into the private sector.”
This was during the National Start-up Policy Dialogue organised by PSFU in partnership with The Innovation Village and Mastercard Foundation at Sheraton Kampala Hotel recently.
Japheth Kawanguzi, the Innovation Village Team Leader, said a policy on start-ups will raise the necessary capital to enable stay afloat when challenges comes.
“There are seven types of capital that can support start-ups including intellectual, human talent, networks to market, finance and institutional capital. We can use a national policy to speak to these types of capital,” he said.
In a written speech, Moses Kaggwa, the Finance Ministry’s acting director for economic affairs, acknowledged the need for a new legal regime that supports enterprise growth and development.
This dialogue on the relevance of a start-up policy in Uganda is definitely an eye opener as it has provided insights in defining a start-up, a micro enterprise and an entrepreneurial ecosystem.
Fintechs take a large share of the Ugandan start-up space. However, many continue to struggle in raising venture capital funding and penetrating the market without the help of the telecoms, banks and other key players in the markets.