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Govt formulating Start Up policy to boost local innovations

Uganda is ranked 119 among 132 countries in the Global Innovation Index 2022 making it one of the least innovative countries in the world according to United Nations Development Programme (UNDP). 

The major bottlenecks stifling the emergence of new enterprises from the innovation ecosystem include limited linkages between academia and industry, inadequate specialized facilities and human capital to support technology development, product development and commercialization in the various innovation clusters, absence of necessary regulatory policies to support technological growth, limited capacity for policy implementation in Uganda’s innovation ecosystem and inequality in distribution of innovation and research opportunities.

In order to address these impediments to the growth of innovations and entrepreneurship in the country, the government through the Private Sector Foundation of Uganda (Psfu) with support from the MasterCard Foundation and coordination by the ministry of Trade, Industry and Cooperatives is formulating the first ever National Start up policy aimed at opening up more opportunities for growth of sustainable start ups.

During a round table meeting with development partners in Kampala, Eric Sempambo, business environment specialist at Psfu said even though there are many young people that come up with innovations mostly in universities, many end at academic purposes as they are no frameworks of supporting them from the level of incubation to turning them into a start up that can be scaled.

“Our interest is in those innovative enterprises that can easily scale, have huge potential to employ Ugandans and pay tax revenue. These start ups need to be supported because many of them even take ten years to break even so it is important to have a good incentive regime that supports them as they grow,” he said.

Sempambo noted that although Uganda has quite a number of policies at national level that try to address some of the challenges start ups face, these fall short on supporting emerging innovations.                                        

“Because start ups require a lot of venture capital support, we don’t have a law that can provide confidence for a venture capital to lay capital in Uganda because one of the things they look at is how government is prioritizing start ups and the only way it can do this is through policy and laws.” 

Kenneth Twesigye, policy lead at Start up Uganda, an association for entrepreneurship support in Uganda acknowledged that Uganda is not in deficit of innovations but rather the level of adoption, impact and influence is low with the levels of innovations being limited by the lack of a fully supported start up eco system.

“Right now innovations are being driven by private actors with less of government support. But with policies coming into play and government recognizing the innovation space and the potential we have in creating jobs and improving our economy, we will grow and accelerate our start up businesses,” Twesigye added.

The next steps to the formulation of this policy are going to include stakeholder engagements, definition of a start up in Uganda, description of required incentive regime to support start ups, bench marking activities and drafting of the start up bill and its principles.

Currently, the technical working group is having regular meetings with development partners and stakeholders  to agree on what elements to be elaborated in the policy so that it brings out the intended impact to start ups, with a draft policy expected to be produced by end of this year and the final policy adopted in the course of next year.


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