The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | The US Government through the United States Africa Development Foundation, has in partnership with Uganda Investment Authority and Stanbic Bank, launched a 5-year program aimed at helping small and medium enterprises to be ready for large-scale investments.
The program worth two million dollars (or about 7.5 billion shillings) involves training and skilling the beneficiary entrepreneurs and accessing them grants of up to 40,000 dollars (about 151 million shillings) each. Under the USADF Accelerate program, the SMEs undergo incubation by the Stanbic Business Incubator to, not only build financial capacity but also formalize their operations to a level attractive to large and international investors.
UIA Chief Executive Officer Robert Mukiza says the program answers the main challenges of SMEs in Uganda and Africa as a whole, which include lack of formalisation, access to financing, and access to markets.
A total of 12 MSME members of the first cohort were awarded grants of between 20,000 and 40,000 dollars. According to Mukiza, the challenge at hand for Ugandan authorities and the private sector leadership is to prepare entrepreneurs to access the markets that have been created, regionally and at the continental level.
Ugandans are lagging in as far as trading under the AfCFTA, while countries like Rwanda and Tanzania are already benefitting under the Guided Trade Initiative of the African Continental Free Trade Area. But Mukiza says the AfCFTA is just one of the several market opportunities that have been created for Ugandan entrepreneurs, who must now plan to grow in them.
According to UIA, Initiatives like the USADF Accelerate Grant simplify the process for foreign investors, eliminating the need to establish new businesses from the ground up. Mukiza called on international investors to consider investing in the growing “Investment-Ready” SMEs in the country as a better option than starting a new company.
Timothy Nzioka, the Director of Programs Operations for Africa at USADF said the purpose of the USADF Accelerate Grant is to help SMEs graduate and reach the market, enabling them to be ready for investment. Focus is on SMEs that are focused on value addition and import substitution, providing job creation.
USAF has several programs including their core program supported by USADF in collaboration with the government of Uganda with each partner providing half of the required financial resources.
He says the US program has been focusing on agricultural development but is now being extended to SMEs in other sectors to help them address their challenges and grow to be more relevant.
The five-year 2 million dollar partnership is to provide development grants to MSMEs, Cooperatives, and producer groups in Uganda, to help them address gaps in their internal systems and capabilities to 100 percent meet investment requirements by commercial investors.
The aim is to catalyze agricultural growth in Uganda by empowering SMEs, cooperatives, and producer groups operating within the agricultural sector for this first cohort, and later spread to energy, health, and construction, among others, in line with the National Development Programs.
Emma Mugisha, the Executive Director and Head of Business Banking at Stanbic Bank said that each of the two partners will be contributing 200,000 dollars over each of the five years, with a possibility of increasing it to 500,000 dollars.
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