Private sector players in the financial sector say that government should invest more towards developing enterprises if Uganda’s private equity financing is to grow.
Charles Ocici, dosage the Executive Director Enterprise Uganda said on Tuesday during a breakfast meeting on private equity that making an entrepreneur goes beyond capital.
He opposed the approach by government to go around dishing out envelopes and making declarations instead of supporting enterprises build their institutions.
“As a nation we need to deliberately assist business people to strengthen their systems because some of them make innocent mistakes that collapse them,” Ocici said.
“Building an enterprise takes a minimum of 7 years but in Uganda’s case, government comes up with a Youth Fund, give people money and we never follow up to see their progress. This is a wrong approach.”
He said that in addition to financial capital, successful businesses are driven by a business oriented attitude, making reference to Ugandans that inherited Asian businesses in 1950 only to drown them in a short time. On the contrary, the Asians who fled the country with no money following Idi Amin’s decree, managed to grow big business empires in Europe.
“The U.S that we admire puts USD 60bn in enterprise development every year while South Korea invests USD 2 bn to create the next Samsung,” Ocici said.
He attributed the low uptake in private equity in Uganda to the poor record keeping culture and bad governance within local firms which makes them ineligible for financing.
Similarly, Kenneth Kitaliko from African Alliance which provides equity finance said that most Ugandan companies lack proper structures through which decisions are made.
“We have capital but only a few firms qualify. Some of them have 3 record books while others are run as a family and decisions are made in the bedroom. You can’t fund such a company,” Kitaliko said.