Ten Reasons why Uganda is the Most Entrepreneurial Country in the World

Richard Branson shared an article on Uganda being the leading Entrepreneurial country in the world. I had earlier on written an article on the same subject having read the report made by the UK networking group Approved Index.

The Freedictionary.com defines an entrepreneur as; “A person who organises, operates and assumes the risk for a business venture.” Branson’s post generated quite some debate on twitter and it’s on that basis that I now share the Ten reasons why I believe Uganda is the most entrepreneurial country in the world.

1. Everyone knows someone intending to, starting up or running a business. I say this with confidence and pride. Nearly all Ugandans employed or not, young or old will be able to point out themselves or someone else they personally know who is involved in some form of entrepreneurial activity. These could range from semi commercial farming, petty trade, service provision, speculative dealings all the way to complex operations involving high end logistics. Quick example, look at how many homes in Kampala have their backyards converted into chicken coops.
2. There are very few jobs. With very many graduates in various fields being churned out annually through the education system, we have too many Ugandans vying for very few jobs. Many Human Resource practitioners tend to complain about the hoard of applications they get whenever they advertise for jobs. In a certain instance, a particular position in a telecoms company received over 3000 applicants when only one person was to be selected. This scarcity of jobs leads to many of the ‘unemployed‘ to moonlight in business as they look out for opportunities in the employment world. It could partially explain the high closure rate of these enterprises within the first few months or years of operation since when a job presents itself, most are inclined to quit business.
3. Salary is never enough. In a country that has no minimum wage, the employees are usually at the mercy of the employer to determine their pay. The biggest hit category are the non professional staff like casual laborers, part time workers among others. Government employees too tend to be hard hit due to their low salaries with an ever increasing cost of living. This leads many to always ensure that they start up a small side business aimed at guaranteeing the daily cash flow demands to meet living expenses.
4. No safety in employment. As a country with very weak labour laws and heavily compromised trade unions, it’s common knowledge that employers especially in the private sector can sack employees with little or no consequences to be faced. This feeling of nakedness among the employees has created a need for ‘insurance’ which is exhibited through the side businesses that the average employee has to have. In the public sector, the gross obsession for patronage makes the tenures of most staff members highly dependent on who the head of the organisation is at that moment in time. Any change means a likely clean up of the organisation’s staff. This uncertainty among public officials leads to their increased zeal to engage in private business.
5. Stock What? Stock Exchange. The average Ugandan hardly knows about the stock exchange and how it operates. Even the few that have tried to participate in it get bogged down by the load of things required to be a participant. Buying shares in publicly listed companies is largely a preserve of a small fraction of the elite with most people feeling comfortable investing their money in ventures that they have a lot more control over. Those that have invested in stocks usually do it with the long term in mind.
6. Glorification of Business. Over the years, being a business man/woman has become something of good repute and in many cases gives one more clout than the traditional professions that we used to look up to like being a Doctor or Engineer. The media is always awash with stories of successful entrepreneurs, the recent drive of a private sector led economy has only increased the admiration many have towards doing business.
7. Abundance of opportunities. The country still has an abundance of stuff to trade in or services to offer with little or no innovation requirement. Most sectors of the economy are virgin and could do with much more participation. Take Agriculture as an example, the ever increasing rural-urban migration is putting a strain on the ever decreasing number of farmers available to supply food to the urban centres and this coupled with demand from neighboring countries like South Sudan, DRC, Rwanda and Kenya has seen food prices soar over the last 5 years.
8. Absence of Oligopolies. Wikipedia defines an Oligopoly as a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Apart from the Telecoms sector and precisely for Voice and Data business, most other sectors in the economy don’t have oligopolies. There is potential for numerous small players to still operate and make meaningful business. Across the border in Kenya, in the diary sector for example, Brookside Diary by the nature of its operations can’t easily enable a new entrant to survive. However, in Uganda, despite there being two large players in the market, there are numerous smaller players that have opened up in the past few years and they are performing better than expected. We also have the category of milk businesses that sells door to door and it too is thriving.
9. There is room to risk. Most people are pushed away from entrepreneurial pursuits due to the fear for risk. Risk translates into many possibilities among which are; lack of money, failure to afford shelter, food, clothing, family/home needs among others. One thing that is common in our social fabric is the fact that most Ugandans have a place to call a village (country home or place). In these villages we usually have access to land or even free accommodation that doesn’t require one to pay rent regularly. In the village, food is hardly bought with most coming from the gardens. So, what is the worst that can happen to me if I failed to make it in the big city? Retreat to a rural life and sort myself out there. If one is a rural based entrepreneur, they are able to take the risk due to this assurance of an abode. Compare this with a Kenyan friend I knew while at university who was born in Nairobi City, her parents were born there too and they never had a place to call village. She had to make it or die trying. She confessed that it is such fears of ‘no where to go’ that made her settle for a job that guarantees a monthly stipend. It may not be much money but it’s predictable hence providing the comfort zone that she needs.
10. Low entry requirements. For most sectors of the economy, the bar of entry is quite low and thus gives many a chance to try out their luck at business opportunities. Due to failure in one way or another to enforce the regulations in place, people are able to commence entrepreneurial ventures at minimal costs. Take the case of a restaurant, while in developed countries one might need to get all sorts of clearance permits and ensure availability of set basic facilities, a Ugandan could very easily start by cooking food in their home backyard and delivering already served plates to offices during the lunch hour.

Roadside fruit vending entrepreneur, Tirinyi Road, Eastern Uganda.

When you travel around the country, you see the buzz of entrepreneurial activity in urban and rural areas. Take an example of your journey from home to work, notice the roadside entrepreneurs selling seedlings, flower pots (designed in different styles), lockup shops dealing in airtime and simple electronics, mobile grocery salesmen, transporters (boda bodas, bicycles, 3-Wheelers) of various household commodities destined for the customers, cars cum sales shops with open trunks displaying products like herbal soaps and traditional medicines for sale, plastic container dealers, motor garages, the list can go on and on.

Now you know why year in year out, Uganda is always featuring among the top most entrepreneurial countries in the world.