Global Global Policy Studies & International Security Technology Policy

Open for Innovation: The Growth of Social Entrepreneurialism in Uganda

Photo: Rachel Strohm (CC)

This past summer, I had the good fortune to attend the LeoAfrica Economic Forum, a one-day conference dedicated to chronicling disruptive growth and development innovations in Africa. The event featured panelists and organizations from all segments of the innovation space in Africa and played host to a series of talks about unlocking the true potential of disruptive technologies. In the morning, the opening plenary kicked off the day with a bold vision of harnessing entrepreneurial spirit in the country, creating innovation hubs around across Uganda, and scaling locally produced apps. The energy was contagious and despite funding hurdles for many individuals, approximately 350 people were in attendance.

Uganda, like many East African countries, is currently undergoing a profound transformation on the spectrum of possibilities in the country. According to a report published by the Konrad Adenauer Stiftung (KAS) entitled “Employment, Entrepreneurship and Education in Uganda”, Uganda is one of the top ten most entrepreneurial countries in the world. Unfortunately, the publication notes that much of this entrepreneurship is “necessity-driven” instead of “opportunity-driven.” Nonetheless, the entrepreneurial space in Uganda is certainly expanding, and the world is beginning to notice.

For me, an education in entrepreneurialism began during my summer internship with the Open Sustainability Institute, which was housed in the colorful and artsy Innovation Bureau. The bureau, an extension of the ever-growing Innovation Village, opened three years ago in the Ntinda neighborhood of Kampala, and is a coworking space that hosts a variety of startup organizations and social enterprises.

CK Japheth, the founder of the Innovation Village, argues that entrepreneurialism in Uganda must be its own proof of concept. He has commented that the rise of a “Hackathon” culture has damaged Uganda’s nascent entrepreneurial culture as young people chase tournament prizes rather than invest in the longevity of their concepts.

“Our entrepreneurial ecosystem is still early and as a result you do not have the pillars that can support the scaling of entrepreneurial activity,” Japheth explained via email. “The government has no idea what it is supposed to be doing, you do not have investors–Angels or VCs or alternative sources–and market options like corporate or private sector are also not completely awake to opportunities to collaborate with entrepreneurs.”

Despite its entrepreneurial potential, Uganda has its problems. The country still fails to attract a sizable portion of foreign investment. Other countries, like Nigeria, continue to outpace their African counterparts. Nigeria’s startup sector is $2 billion. According to a recent report published by Village Capital, East Africa is attracting more venture capital than at any point in its history. Despite this welcome development, the report points out that approximately 72 percent of that funding has been allocated to three companies and that many investors are risk-averse, relying on an elite network of accelerator programs and universities to drive their decisions.

There are success stories like Solomon Kitumba, the founder of the washing app Yoza. Solomon managed to scale his business from a small startup into a full-fledged app that currently serves three-hundred Ugandans. He has since implemented swipe-to-pay systems as credit card activity takes off in Uganda. He commented that “Yoza began as one good idea that we were able to transform into reality. We’re now excited to move into the swipe-to-pay systems that will make it easier for vendors and consumers alike to make purchases.”

Around the continent, additional services have sprung up that show promise. This past April, the World Bank launched XL Africa, a five-month business acceleration program designed to support the 20 most promising startups in sub-Saharan Africa. The program launched this past summer and aims to help startups attract between $250,000 and $1.5 million in capital. Despite this initiative, none of the 20 selected startups came from Uganda, and nearly half of them were based in Nigeria.

Policy Recommendations

As Uganda and other sub-Saharan countries advance toward a digital future, there are priority areas that politicians should address to make aspiration a reality. First, policymakers should consider strengthening Africa’s existing internet infrastructure. A recent Quartz article revealed that Africa still has the slowest broadband speeds of any continent.

There is progress though; according to a report, “Africa’s Telecom Infrastructure in 2016,” from 2015 to 2016 the number of major terrestrial fiber network projects increased from 19 to 26, with approximately $5.3 billion of commitments from countries around the continent. This increase in infrastructure will create better data speeds in remote areas and enable NGOs to share data more efficiently.

Second, African policymakers should commit more money and resources to expanding their country’s startup and innovation spaces. Countries like Rwanda have excelled in this realm, providing government support to localized startups that scale socially impactful solutions, an initiative others have yet to try. As Rwanda forges ahead with an ambitious smart city project sponsored by Nokia, other East African countries like Uganda and Tanzania should take note if this model proves successful.

Lastly, African policymakers should incorporate open, centralized, and readily-accessible data platforms, which would help entrepreneurs by empowering them to identify solutions and ground their startup pitches in robust, empirical evidence. Uganda is a leader in this space, and its Ministry of Information, Communications and Technology (ICT) is currently accepting feedback for an Open Data Policy draft that will take effect in early 2018.

At the end of the day, the LeoAfrica Economic Forum concluded on a high note, with policymakers and practitioners pledging to increase the number of innovation hubs in Kampala and to expand access to capital for start-ups. KAS Uganda and South Sudan Program Manager Donnas Ojok, who keynoted the event, affirmed that “businesses must harness the emancipatory potential of technology and understand that it has the power to build and strengthen social relationships and communities.” Given the climate of entrepreneurialism and innovation in Uganda, it was a fitting note to end on.

Leave a Reply

Your email address will not be published. Required fields are marked *

Social Widgets powered by