This was a question, which was raised at the SCALE conference for entrepreneurs, which was held last week. Uganda has been hyped as very entrepreneurial, but on the other hand the vast majority of business start-ups fail, and very few local businesses develop to the point where they can attract international partners. Also, many substantial Ugandan businesses do not make it past the first generation, so when the patriarch dies the business dies with him.
So are Ugandans simply hustlers who cannot build businesses, which can be passed from generation to generation?
One cannot deny that there are many hustlers on the streets; indeed a large number of Ugandans would starve to death if they did not hustle for a living. Hustlers live a hand to mouth existence, and vary in activities, from the businessman looking for the next big deal to the taxi tout looking for the next passenger.
What they have in common is that they don’t have job security and live one day at a time. I am not critical of hustlers, in fact I admire them, because they don’t get depressed, they don’t bemoan the lot that they have been dealt in life, they usually enjoy life, and live it with confidence as if they have money in the bank, a secure pension and a bright future. On the other hand, I am not happy when I am the victim of some scam or theft which one of these ‘businessmen’ has perpetrated.
The figures for the unemployment rate in Uganda are hard to ascertain with accuracy, but it is safe to say that if we did not have people earning their living through some form of hustle, the unemployment situation would be immeasurably worse. This is why there was an outcry when KCCA tried to bring order to the city – because so many people eek out a living on our city streets, and when they are chased off the streets by the guys in the yellow shirts, they have literally no livelihood.
The question is how we could turn this activity and endeavor, which is based on survival, into something more. In a society where entrepreneurs build businesses, they employ more people, thus creating wealth and the economy grows. However in Uganda, we are not seeing as much economic growth as we need to see. This is partly because we cannot keep up with the rapid increase in the population growth, which in turn creates a high dependency ratio, with every working person having many mouths to feed. There is a real danger that despite all our survival activity, we are not growing the people with the skills and aptitude capable of growing businesses. So that when opportunities come along, such as in the oil industry, they may be lost to foreigners who are more prepared than us – the Chinese, the Indians or even the Kenyans.
There may also be a problem in Uganda in how family members relate to one another, support each other and leverage their assets. I know several Ugandan families who are rich in assets: I can think of one, which was gifted five squares of miles of land by the Kabaka several generations ago, but over the years have lost most of it to squatters, while the rest lies fallow. Such a family could form a partnership with an investor, but cannot achieve the unity and clear legal status to make this happen. Indian families work together and back each other until they have built up substantial assets. The Chinese come with Chinese government backing and access to cash and take over the large contracts. Ugandans are fixated on doing deals – to bring the Indians or the Chinese and score some facilitation.
This is not entrepreneurial activity, this is hustling, but if that money was used to build up a business, which scaled and provided employment and wealth creation, then the Ugandan would have become an entrepreneur.