For the month of February, the Covid-19 Business Info Hub focused its efforts on tackling the topic of youth entrepreneurship in Uganda – exploring the ways youth entrepreneurs are making their mark on the country’s economy, understanding the challenges they face, and identifying the different institutions that work to support them. While unemployment among youth remains one of the biggest challenges that Uganda is facing today, youth entrepreneurship can play an important role to provide employment and economic development for the country. So, what did we learn?

Entrepreneurship among youth is not just increasing out of necessity but out of passion.

From our interactions with young entrepreneurs, it was evident that they chose the entrepreneurship path out of more than just the challenge in finding rewarding employment in today’s economy; they are increasingly launching their own businesses out of passion. For example Kevin Asinde Founder of Amarin Financial Group started the company to give hands-on skills to youth getting into the accounting field and today, she is excited to watch these youth grow into successful professionals.  Entrepreneurship also offers youth an opportunity to develop valuable skills such as critical thinking, decision-making, innovation, leadership, and teamwork, which are relevant in all aspects of their lives. These skills are also in-demand by potential business partners, employers, and others – making it a valuable experience even for those entrepreneurs who may eventually decide instead to go back into the workforce in a different capacity.

 

Youth entrepreneurs face a number of challenges, including some which they share with their older peers and some which are unique to them.

Despite their strengths, opportunities, and vast entrepreneurial potential, young people still face many challenges while starting and growing their businesses. Many of these have escalated due to the Covid-19 crisis and internet shut down during the elections.

Failure to access capital is the major challenge they face, which is one that is unfortunately common among entrepreneurs across segments. For youth, it may be exacerbated by a lack of credit history or experience managing finances. Access to networks is another key hurdle – many young entrepreneurs we spoke with were unaware of the associations that exist to voice youth issues or mentorship opportunities to draw on for encouragement or inspiration. Youth also encounter moments in their journey where they lack a set of skills or specific knowledge needed to grow their businesses, such as product development, business planning, risk management and financial management.

The Covid-19 crisis and internet shut down were some of the first external shocks faced by current youth entrepreneurs. Some closed businesses during the lockdown since they were not offering essential services, while others saw an opportunity and pivoted their businesses. An example is the Smart Girls Foundation who trained youth to start making face masks during the crisis, which is still the alternative source of revenue. Youth have leveraged technology and are doing business online using social media, e-commerce and website applications. They have reduced the costs of renting physical space, greater reach to the customers and building social networks. However, when online business was recently interrupted due to the internet shut down, many lost revenue. Entrepreneurs are now building resources and critical skills to enable them cease available opportunities amidst the crisis to generate revenues for business survival and growth.

The institutions that work to support youth entrepreneurs recognize the need to work together.

Actors supporting the entrepreneurial ecosystem acknowledge that youth entrepreneurship is a gateway to employment opportunities and can be a way to build a prosperous, secure future. To develop the skills to successfully launch and manage businesses, this means providing youth with quality, hands-on training programs starting from an early age through all stages of the entrepreneurship cycle. Incubation centres like Makerere University Business School (MUBS) Entrepreneurship Centre and StartHub Africa develop innovative youth ideas into viable business ventures. Viable businesses also receive mentoring and support to access early-stage funding. M-Kyala Ventures have specialized in offering technical advice on designing financial products tailored to youth entrepreneur needs and cautions that youth need individual and not group funding. The actors informed us that ecosystems most conducive to successful youth entrepreneurship should offer holistic and tailored support. Therefore, coordination is required among actors to achieve this and support for youth programs they are offering. The coordination calls for an umbrella organization that will profile and harmonize on-going initiatives among the different actors.

 

Young entrepreneurs need responsiveness to identify and decode opportunities in the ecosystem

Even with the enabling environment, youth still need to actively seek knowledge and information through networks to learn about the ecosystem’s initiatives. Looking out and participating in business plan competitions, pitch events for their business ideas to get known and stimulating their potential. Youth have to adopt best practices such as; record-keeping, compliance to regulations, and financial management from the inception stage because they are building blocks for growth and exit/succession. Finally, when faced with challenges in the dynamic entrepreneurship journey, young people should look out for opportunities, on how to scale businesses, innovate new products  and diversify strategies to remain relevant and competitive in the market.