Ugandans – Most Entrepreneurial in the World

The Observer newspaper made a facebook post on Uganda’s entrepreneurship ranking based on a report by a UK based business Networking Group, Approved Index which placed Uganda as the most entrepreneurial country in the world.

The comments that followed rendered me momentarily numb. Here I was seeing Ugandans diss their country like it’s worse than any trash one could ever come across. Some of the notable comments I read are pasted below verbatim;

Lukoda Ibrahim: thus rather embarrassing than interesting to read coz am sure whoever did the study doesnt know Uganda properly

Edward Ssalin: Its The Fact But Selling Sugar Canes And Tomatoes On The Road Sides Is That Really Enterprenuership?! Be Serious For Once Guys!

Odwee Sam: Uganda Bureau of Statistics is the only credible entity to come up with a conclusive statistics on this data,basing on the National Household Survey 2013,this ranking is a hoax!

Kyazze James: I daught if It’s true , but what kind of business do they run just hawk g nuts and tomato stalls? Capital of 10000 and you call that business.

Yosa Braxton John: World Econ Forum How Much Bribe Did U Take So As To Come Out With Such A Broad Dayilte Lie?

K Vian Neutron: well i guess opening up a MOBILE MONEY stall is that entreprenual….why dint i think dat at 1st?..Oh Gosh!!!

Samson Muwanga: It maybe true bt what are de returns? Majority are small businesses bt taxed heavily leaving de proprietors with nothing to take home.

Timothy Champion Atwiine: Chapati, hawking nsenene, hawking boiled eggs, bicycle bodaboda, digging people’s gardens…etc…we’re indeed entrepreneurial

Denis Rinda: I’m not sure if I should be happy. Highest ranked entrepreneur but Poorest nation.. No need to get high

Not only did I sense an attitude of lack of self belief but quickly realised that some Ugandans are still trapped in an elitist vacuum that tends to denigrate certain work activities thereby identifying them with failures. Take the example of a sarcastic statement like this, “Chapati, hawking nsenene (grass hoppers), hawking boiled eggs, bicycle bodaboda, digging people’s gardens…etc…we’re indeed entrepreneurial.”

My favourite Rolex guy, based in Buikwe Town Council

I wonder what century such a character is living in. As an educated person who has time to schmooze with facebook, doesn’t he have the least appreciation that one can start off by having a roadside Chapati stall and later operate a chain of such stalls all over the city offering a much sought after brand?

To avoid engaging in pedestrian commentary, I decided to download the report and flip through it. Based on the criteria used and findings got, indeed without doubt Uganda deserves the position. However, to avoid being distracted by mere semantics of being considered Number One in the world, I tried to dig deeper into what the various metrics evaluated mean to us and what we can draw from the findings as individuals and Government of Uganda.

The Global Entrepreneurship Monitor survey monitors entrepreneurial attributes and activities both individually and globally. It tracks business dynamics by capturing the rate of established businesses among the adult population and the rate of discontinuation of business.

Uganda was classified among the ‘Factor-driven economies.’ This is where countries compete primarily on the use of unskilled labour and natural resources and companies compete on the basis of price as they buy and sell products or commodities.

The study reveals that in factor-driven economies especially African ones, starting an entrepreneurial venture is seen as a good career choice, it offers successful entrepreneurs a high status and there is a lot of media attention for entrepreneurship. Just look at the New Vision’s Pakasa initiative and the multitudes of followers it commands.

A study of individual attributes among Ugandans pre-determined matrix revealed the following scores;

Perceived Opportunities; This is the percentage of individuals aged 18-64 involved in any stage of entrepreneurial activity who see good opportunities to start a business in the area where they live. A score of 76.9% was achieved putting Uganda in the lead of all countries involved in the study. Sweden follows at 70.1%.

The learning point from here is that the Ugandan mindset is one that has been driven over the years towards opportunity identification. This could have been caused among others by the high unemployment rate, poor job security and perceived lack of Government interest in addressing the joblessness situation. Essentially amidst all these challenges, the society is indirectly benefitting by readjusting itself towards being solution oriented.

What can Government do? Ride on this mindset, publicise and create more opportunities targeted for the local audience. The same effort being put into selling the country to international investors should be directed towards local investors.

Perceived Capabilities; This is the percentage of individuals aged 18-64 involved in any stage of entrepreneurial activity who believe they have the required skills and knowledge to start a business. At 84.9%, Uganda is the runaway leader in this category again followed by Jamaica at 81.2%.

Lesson learnt from here is the self belief many Ugandans have. They may not have the advanced degrees that the small elitist workforce seeks comfort in but they know that they can do something for themselves and survive for starters.

What can Government do? Carry out a study on the skills gaps across the entire spectrum of our populace and make efforts to impart those skills to the interested public through specialised trainings or integration into academic curricula.

Fear of Failure; Is the percentage of individuals aged 18-64 involved in any stage of entrepreneurial activity who report that fear of failure would prevent them from setting up a business. Once again, Uganda scores the lowest rate of 12.6% closely followed by Panama at 14.6%.

This implies that the majority of Ugandans are less fearful about engaging in a business venture. While they may not have the guarantee of success, they still are willing to give it a shot. Could this be driven by social factors like the media publicity around entrepreneurship, likely respect to be attained or the seeming lack of alternatives that leaves one with only bold choices to make? Another silent factor could be our family setup where most people have a family setting to fall back to. In case you bungled up, you are likely to fall back to your parents or uncles or aunties for salvage. I have been to India and seen people who have practically no where to turn to in case things went sour. This reduces their innate ability to take risks and leads them to prefer predictable stability even when it comes at the cost of pursuing their passion.

Entrepreneurial Intentions; This is the percentage of individuals aged 18-64 involved in any stage of entrepreneurial activity who are latent entrepreneurs and who intend to start a business within three years. Uganda again scores highest at 60.2%.

These intentions are highest among factor driven economies like that of Uganda and lowest in Innovation driven economies like those of the EU and North America thereby reinforcing a pattern that has been observed that starting an own business is dominant where other options to provide income for living are limited.

From just these matrix alone, it is evident that there is a trend in Uganda towards being an entrepreneurial society and despite the level of operations or type of businesses we may boast of, the fact remains they are business ventures.

A further analysis was done on the motivation for Early Stage entrepreneurial activity (TEA). This was defined as the “percentage of individuals aged 18-64 who are either a nascent entrepreneur or owner-manager of a new business.”

35.5% of Uganda’s adult population is involved in TEA coming only second to Cameroon at 37.4%. However, of more interest is the actual composition of this grouping. Of these Ugandans involved in TEA, their motivations for joining are broken down as follows;

Necessity Driven; Is the percentage of individuals involved in early stage entrepreneurship who claim to be driven by necessity (having no better choice for work) as opposed to opportunity. An obvious example could be that lady who chooses to sell groundnuts and assorted snacks by the roadside having failed to get employed by any one. Another vivid one that is common lately is the university graduate who decides to hawk merchandise after having failed to get a job and yet needs to look after himself or even younger siblings.

18.9% or people involved in Early Stage Entrepreneurial activities in Uganda fall in this category. I actually thought it as much higher but then again, here we are faced with researched statistics.

Opportunity Driven; Is the percentage of individuals involved in early-stage entrepreneurial activity who claim to be purely or partly driven by opportunity as opposed to finding no other option for work. This includes taking advantage of a business opportunity or having a job but seeking better opportunity. Of obvious significance here are the various people you find who have quit their jobs to pursue a business venture in an area they perceive to have potential.

This category is the largest among early stage entrepreneurs in Uganda at 80.8%. Coupled with the low fear factor of 12.6% more Ugandans are likely to pursue opportunities once they identify them.

Improvement Driven Opportunity; Is Percentage of individuals involved in early-stage entrepreneurial activity who (1) claim to be driven by opportunity as opposed to finding no other option for work; and (2) who indicate that the main driver for being involved in this opportunity is being independent or increasing their income, rather than just maintaining their income.

This category ropes in most of those employed people who have a business on the side. Lately there is a craze for farming and many corporate leaning employees are purchasing land and investing in crop and animal husbandry. 54.3% of early stage entrepreneurs are in this category.

The study however went ahead to come up with a Motivational Index which is a ratio between the necessity driven entrepreneurs and improvement driven entrepreneurs to help understand better the entrepreneurial capacity of a country. A high motivational index indicates a high share of improvement driven entrepreneurs that brings more long term and ambitious expectations related to the venture. Uganda’s score of 2.9 is midway the range and puts us out of the bracket of countries where businesses are mainly started out of necessity. Countries like India, Cameroon, Philippines, South Africa, Iran, Croatia, Jamaica are tending towards the motivational index of 1.0 or even lower hence pointing to some challenges that need to be addressed in their economies.

To the doubters out there, Uganda is actually faring well in the entrepreneurial space and there is still alot more to be achieved. Cease criticising blindly and start making an effort to become one of the entrepreneurs who want to have a piece of a pie.

Imagine this, by the end of this decade, ours will be a nation of 40 Million mouths to feed and the East African region will likely have more than 100 million mouths to feed. If you processed just one of the many foods we have richly growing and targeted only One Dollar from only 10% of that population by 2020, how rich do you think you can be?

Start that business.

Additional information form the Global Entrepreneurship Monitor 2014 Global Report.

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