Uganda can benefit from investment in entrepreneurship post COVID-19

Uganda can benefit from investment in entrepreneurship post COVID-19

From the limited access to market, appropriate talent to lack of investment capital, Ugandan entrepreneurs are grappling with a litany of challenges.  

But when key sector players met at the Bounce Back event on Wednesday, they were all in agreement that it is time to make the business environment right for entrepreneurs to grow their solutions. The event organized by Ugandan Investment Authority (UIA) in partnership with MoTIV and The Innovation Village sought to chart way on investing in the face of adversity and providing a platform to young Ugandan business owners who developed innovative solutions during the COVID-19 crisis  

Speaking at the event, Director One-Stop Centre UIA – Joseph Kiggundu said the authority is working to ensure domestic investors are supported to receive the skilling, access to market, and financing they need so that they can increase contribute to job growth access and improve the quality of goods and products sent to the domestic and international market.   

Joseph Kiggundu, Director One-Stop Centre, Uganda Investment Authority (UIA)

“We want to have a shared understanding of the investment potential of this country and how the government and private sector can work together to make sure investors get access to the necessary support,” he said.   

On the other hand, Japheth Kawanguzi, Team Lead at The Innovation Village called upon key sector players to take the conversation to the next level by building Uganda into a top investment destination, with special emphasis on entrepreneurs’ needs. 

Japheth Kawanguzi, Team Lead, The Innovation Village

“The needs of entrepreneurs are unique from those of a typical investor coming into Uganda. We need to do work on profiling who they are, where they are, what they need in taking their businesses to the next level and we commit our participation as far as that agenda is concerned,” he said.   

Hinging its work on innovation and technology to solve Uganda’s most pressing challenges, The Innovation Village has in the past years done a lot of the work to make Uganda the best place any entrepreneur thrives in by providing business support, knowledge, access to market, links to investors and a community of like-minded people.  

Kawanguzi noted that in the absence of a conducive environment, Uganda will not achieve its aspirations even when it is regarded as one of the most entrepreneurial countries in the world.  

“If our policy environment is not speaking to how we can make this place investable, we will keep saying we are the most entrepreneurial without investment. Some of the initiatives we have been pursuing are around having a Startup Act that will put in place a policy environment where we can incentivize big corporate companies to work with entrepreneurs because there is shared value and opportunity for them in engaging in sustainable relationships with entrepreneurs,” he explained.  

According to the UIA strategic plan 2020/21- 2024/25, the government seeks to increase Foreign Direct Investment contribution to Gross Domestic Product from 3.6 percent to 5 percent. It also wants to increase the value of new domestic investment from 24.4 percent to 50 percent by 2025. As Uganda is now seen by some as an actively growing economy, a lot leaves to be desired as regards the promotion of investment.  

According to Digest Africa, in the first three quarters of 2021, $2.7bn has been raised making 2021 Africa’s most funded year surpassing the $1.8bn raised in 2019. $906M has been raised by FinTechs in Q3 2021 topping Commercial and Professional Services ($200M), Ecommerce and Retail ($140M), and Transport and Logistics($124M) managed to raise at least $100M. The $906m raised represents 62 percent of all funding in that quarter and it is more than the amount raised by all sectors combined in the entire first half of 2021. In 2021, Ugandan startups including Ensibuuko, Numida, Tugende and Chipper Cash raised funding rounds of $1,000,000, $2,300,000, $3,600,000 and $250,000,000, respectively. 

While sharing his experience, renowned entrepreneur Amos Wekesa, also Founder, Great Lakes Safaris said the impact of the COVID-19 pandemic on the tourism sector pushed him to diversify his investment portfolio to include agro-processing.  He said there is need for policymakers to discuss the ease of doing business and protect young entrepreneurs from the challenges arising from government policy. Closer to his heart is the fact that Uganda has done little to market its investment potential to the rest of the world, an issue he says barely helps entrepreneurs.  

Amos Wekesa, Founder of Great Lakes Safaris.

“We need to push for positioning this country. The other reason we are poor and struggling with lack of capital is because we have not told the country how wonderful this country is. We have not marketed it and if we did that, we would solve the issue of capital and other issues. As people who are doing business, we must push this country to have an agenda and to attract opportunities and we have those, we all survive,” Wekesa said.  

 As the country picks up the pieces following the pandemic, there is hope that innovators can contribute to economic recovery. Only time will tell the possibilities therein but for now, players like Damali Ssali believe more needs to be done for the youthful entrepreneurs.  

Damali Ssali, Founder of Ideation Corner.

The Ideation Corner host spoke about the barriers to financing for small businesses started by entrepreneurs and emphasized the need to address the issue of affordable capital, especially for those that have proven successful business models. 

“We need to come up with a framework within which we can help our entrepreneurs. They come up with smart solutions, but they can only do so much for so long. If we address those issues, those SMEs that are dying within two years would instead be able to employ more than three people and we would not have unemployment given the growing population of young people in search for jobs,” Ssali concluded.