Study names Uganda top entrepreneurial country but experts say more must be done to make country more entrepreneurship-friendly
Amos Wekesa, the famous tourism entrepreneur, started his business almost 15 years ago as ‘briefcase’ activity – moving around with an invoice and receipt book and hiring cars to provide services to his few clients. His focus was on delivering personalised, detail-driven service to retain his clients and acquire new ones. The mobile business later birthed Great Lakes Safaris in 2001. It was not easy.
“I even contemplated closing the business but held on,” he says. Wekesa’s experience is not any different from what other entrepreneurs go through. But thanks to his persistence and hard work, Wekesa has evolved into one of the most famous tourism entrepreneurs the country has ever produced. Many are now being inspired to follow in his footsteps.
Indeed, according to the 2014 Global Report, which was conducted by the Global Entrepreneurship Monitor (GEM) and released mid July, Uganda ranks top on the list of the most entrepreneur countries in the world. The rankings were based on calculated percentages of the adult population in each country that either owns or co-owns a new business and has paid salaries/wages for at least three months. In this regard, Uganda has more than a quarter of its population fulfilling that entrepreneurial role standing at more than 28%.
The report further shows that developed nations overall don’t even break the top 25 spots with Australia ranking the highest at number 26.
“In Uganda a massive 28.1% of the population are entrepreneurs, capitalizing on the freedom that comes with shirking off decades-long rule by dictatorship. Many of the self-employed are seeing their businesses expand because of the country’s recently laid fibre optic cables that connect even remote villages to the internet,” reads the report in part.
In each economy, GEM looked at two elements: the entrepreneurial behavior and attitudes of individuals and the national context and how that impacts entrepreneurship.
Trilby Rajna, one of the researchers, said in countries where the economy is poorer, or where unemployment rates are high, citizens turn to starting their own small businesses where they see opportunity.
Fred Muhumuza, an economist with KPMG, throws some light on loopholes in the economy that should be bridged to create opportunities for more entrepreneurs.
He says that while the institutions are tasked with improving the legal framework systems as well as barriers to financial assistance, the citizens should take them up to mobilize resources and actualize them into businesses. The environment according to him in terms of legal and financial institutions is not favourable enough to enable more start-ups.
“There are no legal framework systems to encourage partnerships especially with young entrepreneurs who have the feasible ideas but lack other resources. Kenya is way ahead of Uganda in terms of this,” said Muhumuza.
“Without more job opportunities, young people will find their way into crime and armed conflict.”
Entrepreneurship is defined as the percentage of an adult population who own (or co-own) a new business and has paid salaries or wages for at least three months.
At the Global Entrepreneurship Summit in Kenya; the first of the kind in sub-Saharan Africa, US President Barack Obama who chaired the meeting, applauded Africa as one of the fastest-growing regions of the world. He said, “People are being lifted out of poverty. Incomes are up. The middle class is growing. And young people are harnessing technology to change the way Africa is doing business… “
He said the growth rate creates incredible opportunities for Africans and for the world, which translates into more growth and trade that creates jobs in all our countries. Obama argued that entrepreneurship creates new jobs and new businesses, new ways to deliver basic services, new ways of seeing the world.
Entrepreneurship means ownership and self-determination, as opposed to simply being dependent on somebody else for your livelihood and your future. Entrepreneurship brings down barriers between communities and cultures and builds bridges that help us take on common challenges together. Because one thing that entrepreneurs understand is, is that you don’t have to look a certain way, or be of a certain faith, or have a certain last name in order to have a good idea.
Muhumuza agrees. “When unemployment is high and the economy is weaker, people are forced to start small businesses to provide for themselves and their families,” he said.
Muhumuza also points out that the definition of entrepreneurship has varied depending on the reports. He attributes this to the fact that many Ugandans are misrepresented as ‘entrepreneurs’ yet they are not.
He argues that an entrepreneur should be an individual who comes up with a business idea, mobilizes resources and starts up a business employing other people.
The main challenge for developing countries like Uganda, some experts say, is to ensure that the business environment is conducive for entrepreneurship. The 12th edition of the World Bank’s Doing Business 2015 ranks Uganda at 150 out of 189 countries in the world with regards to ease of doing business. Rwanda tops the regional rankings at 26, Tanzania at 131, Kenya at 136, and Burundi at 152.
Globally, Uganda stands at 166 in the ranking of 189 economies on the ease of starting a business.