Monday, May 14, 2012


Moses is a budding entrepreneur with a small restaurant and washing bay near Munyonyo.  From his road side operation Moses services all types from the mason on a very tight budget to the hung over sufferer on weekend mornings. He plans to be a household name in five years’ time with branches of his restaurant dotted all over the city’s suburbs.

It is with this in mind that Moses has presented himself to KCCA to benefit from the government’s Youth Fund, of which KCCA is one of the agents.

With the sh5m he is applying for he plans to buy new furniture for his restaurant and be able to buy his supplies in bulk. He also wants to buy new equipment for his washing bay.

During last year’s election President Yoweri Museveni made the campaign pledge to set up a Youth Fund, a revolving fund that would lend money to young entrepreneurs to shore up their businesses.

Since then the government has committed sh44b to the endeavor, channeling it through the formal banking system.

The finer details of the loans may differ but basically the loans of between sh100,000 to sh5m, will be on lent to small businessmen over three years at a about 14%. The money is intended for projects that will increase employment and which have promising futures.

As a nation we are seating on a time tomb. At current rates our population is doubling every 20 years, while our economy is not growing fast enough to meet the rising demands of this growing population. But even more worrying is that almost half of our population is under the age of 15 and in coming years will need a source of employment.

It is fallacious to think – and it has not happened anywhere in the world, that by building huge industrial concerns we will be able to absorb this youthful army. The world over it’s the small enterprises that employ the most workers.

For this reason it makes sense to offer some support to small businesses. But in addition it is these small businesses that will eventually grow into big businesses. As a long term strategy to grow big businesses we need to support the small businessman.

Government has identified a lack of capital as a major constraint of the small businessman and this is there effort to redress this. People who have studied the subject in Uganda may argue too, that entrepreneurship – the ability to convert opportunities into profitable, sustainable enterprises is what is most missing in our society.

Past studies have shown that Uganda is atop the world entrepreneurial ladder. However a lack of know how is preventing us from rising from the setting up businesses for subsistence to building national, regional and international concerns.

The know how to  form and sustain partnerships, to create and hold a vision and to create a systems based operation that can not only drive itself but is scalable and transferrable.

This knowledge cannot gleaned from the text books but learned from experience. May government may want to invest too in a mentorship program, where some of these small businessmen have more experienced businessman helping then through the hard knocks of the business world.

In Uganda we are at a bit of a disadvantage. When you ask a child in the US what he wants to be when he grows up he may answer Mark Zukerberg, the founder of Facebook but Ugandan a kid will more likely than not want to be a minister or a big public official. Which would be laughable if it were not sad, because society’s wealth is created by the businessmen and not the politician or the technocrat.

If there is one lesson we learn from the cold war is that a country is only as viable as the strength of its private sector.

Years of turmoil means that most Ugandans are always on the lookout to make an extra shilling on the side, starting up small businesses alongside their formal employment. We take it for granted but this is not normal procedure in neighbouring countries.

This is good thing because success in business is a numbers game. Since the world over only a small fraction of businesses survive beyond their first let alone fifth birthdays, the more startups you have the better the chance one of those successes will gone to expand and thrive.

So government is on the right track trying  to bridge the capital deficiency of  our budding entrepreneurs, but maybe we would get more bang for our buck if we invested in improving the capacity of our businessmen, because after all money follows good management all the time.

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