December 04

John and Dayna in Uganda – Entrepreneurs everywhere

???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????Whether you are walking, driving, biking or boda boda-ing here in Uganda, almost wherever you go there is commerce happening. By this we are referring to the fact that people are selling products pretty much everywhere.

In traffic, people are selling everything from phone cards to toilet paper to art objects to you name it.

On most every main road, as far as the eye can see, there are businesses present. These can range from a fruit stand to a small (or large) supermarket to an office building and everything in between. On smaller streets/roads, there are butcheries, repair shops, small schools, and other shops that sell a variety of items.

On even smaller streets it is interesting to see how people are looking to make a living: For example, we see a gentleman with a tiny table under a tree who is a shoe repair professional! There are small shacks everywhere that are being used as a restaurant or a hair salon or a bicycle parts place or any number of other businesses. It is quite a sight to see!

As we come from a country with pretty strict regulations and hoops to jump through to start a business, we wondered what the story was here in Uganda. In asking locals, and looking online, we determined that – purportedly – a trading license is required. This is issued by the local authority (town or city council), but it seems that some people just go for it and set up a stand or kiosk and start offering goods for sale.

It was interesting to learn some other facts:
• The license fee for opening up an office is Ushs. 156,500 (about $60).
• The license fee for carrying out a retail business is Ushs. 206,500 (about $80).
• License fee for carrying out a wholesale business is Ushs. 366,500 (about 140).
• The Trading License is a general business license required for all companies.

As agriculture makes up over 80% of the work force here (with coffee being its greatest export), we read that over the last two decades Uganda has strived to improve performances based on continued investment in the rehabilitation of infrastructure, improved incentives for business owners, reduced inflation, and improving upon domestic security.

In regards to the improvement on the entrepreneurial spirit in Uganda, the current President has looked to made advancements in returning the power of commerce to the peoples of Uganda. We read that the average age of an entrepreneur in Uganda, many of who are women, are between the ages of 30 and 40. Many only have a high school education. 59% of these people are surveyed as being in business for making a living. Trade continues to be encouraged and discounts for starting a business are offered by the government of Uganda.

Uganda’s economy has great potential. While agriculture is the main sector of the economy, economical growth is driven by services and trade. Although Uganda is among the poorest countries in the world, the government has pursued economic reform policies, infrastructure projects, domestic security initiatives that have resulted in positive economic growth.

Some other facts that we read about:
• Asian investors/entrepreneurs are returning to Uganda after being ousted during the last civil war.
• Legal issues and lack of intellectual property rights are a concern for entrepreneurs.
• Culturally, business is looked at with optimism and ownership is well respected.
• 50% of businesses fail; however there is a high rate of failed owners re-starting withing 3 years.
• Angel investors are very common, however the amount invested in very low.
• Most Ugandans feel that entrepreneurial activity is a better way to “make a living.”
• Ugandans cite independence as a key motivating factor in starting a business.

As we purchase fruit and other goods from “street vendors” we feel grateful that we are assisting the local people in pursuing their “Ugandan Dream”.