Mr Stephen Asiimwe, the chief executive officer of Private Sector Foundation Uganda. PHOTO/ISMAIL MUSA LADU
How relevant are you in terms of impacting businesses in the country?
You can look at the Private Sector Foundation Uganda (PSFU) as a catalyst as well as a policy and advocacy institution. We intend to ensure that there is an enabling environment for the private sector operating in the country to create wealth and succeed. For those who have operations beyond the borders, we also look out for them. We want all our exporters to do business without being encumbered by non-tariff barriers NTBs. We are also the focal point for the East African Business Council. We work closely with our neighbouring private sector agencies, like Kenya Private Sector Alliance as well as the Private Sector Foundation in Tanzania.
Are you at the point where you believe you can influence policies in favour of businesses?
We are firmly involved in the co-creation of policies. Up to 82 percent of the national budget presented recently reflects our position and ideas. This was as a result of collaboration with the Finance Ministry and the private sector. We toured the country and after consultations with our members, we came up with a position to support the government. We work with the World Bank, the European Union, the Mastercard Foundation, and other development partners whose interests are in tandem with the private sector.
Any real example of the outcome of your engagements so far?
We have a project called the Generating Growth Opportunities and Productivity for Women Enterprises (GROW) worth about $217 million (Shs806 billion) and the Investment for Industrial Transformation and Employment (INVITE) which is in the range of $210 million (Shs780 billion). These funds are intended to support women-owned enterprises and value addition for exports. We signed the GROW implementation deal last year and we are working with the World Bank, the Finance Ministry and the Ministry of Gender and Social Affairs to ensure that we support women in business.
We are looking to grow women startups from micro or small businesses to medium and large enterprises. We are going to do this by providing the necessary financial support that will help them formalise and grow their businesses. We shall provide all necessary help or skills in financial management, product development and branding. We shall also help with quality issues and impart a savings culture. This will be in addition to working out market access and digitisation among others. So this is a good time for women in business as well as for those engaged in value-added and export-oriented industries.
Is this kind of patient capital?
We have come up with a very strategic initiative called a catalytic fund. We want to set up a basket of funds which will be easily accessed by business people. Our first target will be small and medium enterprises, and maybe a few other large companies. This fund will be patient and catalytic in its design and nature. Many Ugandan companies are lacking financing for exports. To that end, we are putting an export support fund, which means that if a company is exporting coffee to Hamburg, we shall be there to facilitate that using our export portfolio. PSFU is working with the Finance Ministry and the World Bank in putting in place this mechanism. We have already signed it and very soon, we shall start rolling out the programme.
You are not the government so why are you doing all these?
We are simply bridging the gap between the private sector and government through our policy advocacy roles. Our mandate revolves around creating an enabling environment through dialogue, policy support, skills and capacity building, and through business development services. With all that, we can create a competitive private sector.
For example, we have managed the Competitiveness Enterprise Development Programme which is coming to a close. We have seen it support mainly tourism development, product development, marketing and branding. Uganda is now a certified tourist destination because of supporting efforts like this. We also have the Mastercard Foundation International, targeting to create 300,000 jobs by the end of next year. We have a Work Readiness Programme, which prepares young people over and above the degree they have. We do business development services. But, we are an advocacy and coercive institution to create an enabling environment for businesses.
Speak briefly about the domestic business environment.
While Uganda has the highest propensity for entrepreneurship, this is also accompanied by the highest mortality rates. The reason is simple – emotion takes the better of most people when starting businesses.
We rarely make plans before starting a business. Most of our people do not take into account market forces. Many know little about financing, record keeping, product development or even what competitiveness is all about. And I have been a victim of this myself. I have started businesses and have so many tombstones to talk about. This is largely because I did not plan before venturing into it.
To solve these challenges, you need to understand the specific need your business is addressing. You need to understand whether your business is scalable? Do you have the requisite financing to do this? Are you giving it the necessary time? All these are necessary because young businesses are like infants in need of essential nourishment.
This is why we emphasize that businesses need structure, human resource, capital and the market to be competitive. And importantly, we must dedicate our time.
Often, we manage businesses through phone calls or WhatsApp, overlooking that, like infants, businesses need attentive care and nurturing to grow and succeed.
You have to watch over your business especially in infancy until it has matured or else it will be short-lived.
We have also observed that oftentimes people go into business using finance funds from money lenders or shylocks – attracting outrageous interest rates. These are red flags we signal to our people so they don’t get trapped due to the high cost of finance. The important thing is that although financing is important, having a tight business proposal is equally a deal breaker and it should come ahead of financing. You must also be formally registered, traceable and trustworthy. All these are important before financing.
