Uganda is one of the most enterprising countries in Africa, however, most of the started businesses never make it to their third birthday. The high business failure in the country, experts say, is due to young entrepreneurs borrowing money to start businesses.
Annette Kihuguru, the executive director of Ecobank, says many SMEs bleed to death due to simple mistakes from business owners that can easily be avoided. She says to show some seriousness, entrepreneurs should at least have part of the capital that will make them more responsible in their businesses than when they get 100 per cent capital from financial institutions.
“If you want to start a business, please do not start with loan money. If you do that, chances of your failing are 99 per cent. You should at least have 50 per cent of the capital and then the bank adds you another 50 per cent,” Kihuguru counselled.
She said these while addressing graduands recently who undertook the Executive Entrepreneurship and Personal Improvement Programme offered by Human Capital International (HCI), a leadership, entrepreneurship and human resource organisation based in Ntinda, Kampala.
Kihuguru also advised those intending to start businesses to venture into only those enterprises they have passion for, ensure good records keeping, and avoid extravagant lifestyles which end up draining their crawling businesses.
In 2004 the Global Entrepreneurship Monitor (GEM) report ranked Uganda among the top five enterprising countries in the world, rubbing shoulders with the United States, Brazil and Peru. Thirteen years later in 2017, the Approved Index report, a UK-based business networking group survey ranked Uganda as the most entrepreneurial country in the world.
Emmanuel Dei-Tumi a renowned entrepreneurship and leadership coach, at HCI advised that entrepreneurs all over Africa should seek the necessary practical entrepreneurial skills and attitudes to enable them start enterprises and grow them for generations if youth unemployment and the low tax base is to be addressed.
Dei-Tumi said Africans have demonstrated an enterprising spirit for years but many lack the necessary tools to build enterprises that will last for generations and transcend beyond the continent.
“It is the reason why we started this programme that offers practical ways of starting and growing a business that a founder should pass on to the next generation,” said Dei-Tumi, who is the HCI chief copywriter.
Dei-Tumi added; “Our graduands have been taken through the key business pillars such as entrepreneurship leadership, strategies for organic growth, basic accounting and cash flow management and how to innovate your way out of business challenges,” he added.
Matia Kasaija, the minister of Finance, Planning and Economic Development during the 2019/2020 budget speech in July, said that four out of every 10 young Ugandans were unemployed. The unemployment rate, Dei-Tumi said, can be reduced through entrepreneurship development but that can only happen if there is business sustainability.
The tax to GDP as of 2018, stood at 14 per cent and Kasaija said government hopes to increase it to 18 per cent in the FY 2019/20. Increasing tax base requires more enterprises that will be taxed.
Dei-Tumi explained that since the introduction of the programme in May this year, about 80 entrepreneurs have successfully gone through the programme. Divine Masaba, one of the graduates of the programme said the practical course has helped her realised the mistakes that led to the near-collapse of her decoration business such as poor marketing, less commitment, customer care and living beyond her means.
“I can now confidently go and I re-awaken my business. I made many mistakes which I am going to correct,” Masaba said.
Agnes Oluka, another business lady said she fears to retire into poverty and the training has helped her lay strategies and tactics to retire happily.
“As ladies, we fear to grow old but the truth; we are ageing. I took this course to prepare for my 50s,” Oluka said.