Few Ugandan youth own Businesses-Twaweza

By Ronald Orachwun

Government has been urged to improve the design of and create more awareness around livelihoods and financing initiatives after a report discovered that less than half of Ugandan youth own businesses. This is despite the available government initiatives to alleviate poverty among the Ugandan youth. These findings are based on data from a mobile phone survey dubbed Sauti za Wananchi where 1,597 young people aged 18 to 34 and 2,900 other respondents were randomly selected from across the country to determine perceptions of the challenges and opportunities for young Ugandans in starting and running businesses.

In a brief released on Friday 12th August 2022 as Uganda joined the rest of the World to commemorate this year’s International Youth day, the data shows that young Ugandans are less likely to own businesses than older citizens: four out of ten (41%) citizens under 35 years have owned a business in the previous five years, compared to five out of ten (51%) older citizens. Similarly, fewer young citizens (18%) than older citizens (25%) currently own a business.
The major reason for this trend has been attributed to challenges of accessing sources of funding. Almost nine out of ten young Ugandans (86%) name start-up capital as the main thing they would need to start or run a business. This is followed by a suitable space to run the business (69%), financial literacy or management skills (54%), access to inputs (37%) and affordable inputs (32%). The government has in the recent past initiated programs targeting the youth, but the reception has been minimal. For instance, according to the Twaweza report, Ugandans under 35 are also in part aware of government programs to provide support for youth livelihoods. Seven out of ten young people (69%) are aware of the Emyooga initiative, though just two out of ten (22%) can name the initiative without prompting. Three out of ten (32%) are aware of the Youth Livelihood Program YLP, including one out of ten (13%) who can name the initiative unprompted. One out of six young people (16%) report participating in Emyooga, around half of whom (7%) named it as the most useful youth empowerment initiative. A much smaller proportion of youth have participated in the Youth Livelihoods Program but all of them name it as the most useful such initiative. However, several youth are aware of other possible sources of finance for their businesses and point to a number of different potential sources other the possible government sources of funding.

The most widely cited are savings groups and village savings and loan associations (VSLAs; 37%) and banks (35%). Savings and credit cooperative organizations (SACCOs; 26%), funds from family members (23%) and friends or neighbours (20%) are also widely named. Violet Alinda, Country Lead for Uganda at Twaweza said: “These data clearly show that there is untapped potential for entrepreneurship among young Ugandans since fewer of them own businesses compared to older Ugandans. Young people have some of the skills and knowledge they require to manage their finances. They are aware of major constraints to starting and running businesses as well as government and other initiatives to support youth businesses. Young people are specifically asking for support in accessing capital and building their business skills. Given the current economic crisis, the food shortages and global economic contraction, these data highlight a great opportunity. If the government can improve the design of and awareness around livelihoods and financing initiatives, young Ugandans are ready to play their role in economic transformation.”