5 July 2012

Uganda: Youth Fund Should Include Mentorship Programme

IT is uncommon to find a 26-year-old with a successful land surveying business, but Godfrey Agenonga has managed well for the past two years.

His firm, Joleka Survey Services, has survived beyond the average business lifespan of one year for most Ugandan businesses. And like his peers, Agenonga dreams of the day he will get a piece of the Youth Fund money.

"With the money, my business would boom," he says.

"However, only one of my friends has accessed the fund money so far. It is hard to tell if I will ever be selected as a beneficiary," Agenonga says.

Debate is still raging whether first time entrepreneurs qualify as recipients for funding, and whether the illiterate should be included as beneficiaries.

According to African Development Indicators of 2008/2009, youth unemployment is at an all-time high of 83 percent.

Emmanuel Kitamirike, the Uganda Youth Network executive director, recently said Uganda produces 400,000 graduates from universities and tertiary institutions every year, while only about 90,000 jobs are created.

Speaking at the KPMG budget dinner, Charles Ocici, the Enterprise Uganda boss, pointed out that 70 percent of the youth reside in rural areas. And that it is illogical to assume that a person with access to factors of production can run them well.

"Only a few people are natural entrepreneurs. Handouts will either leave a person worse or better off," he said.

The youth fund is supposed to focus on agro-processing, primary agriculture, livestock, manufacturing, construction, tourism, ICT, health, education and transport.

Finance minister Maria Kiwanuka noted in recent remarks that over 3,000 youth have since accessed part of the sh25b Youth Fund, adding that more money has been allocated to the fund in the current financial year.

However, concerns are starting to arise about the ability of the youth to churn out viable businesses that will stand the test of time, let alone to repay the sh5m-sh25m loans at a fixed 15 percent rate per year.

"I have spoken to many youth that intend to use the money for construction and to marry. There should be an incubation and mentorship programme so that the scheme does not end up like the Entandikwa scheme," said Abbey Mutumba, the Abbedax boss, an entertainment firm.

Moustapha Ndiaye, the World Bank country manager, said the inclusion of commercial banks to dispense the money acts as vetting mechanism to ensure that borrowers are well assessed before they receive funding.

"It is not a university degree that makes you an entrepreneur. It is critical to have a system of mentorship to guide the graduates in their first year of business," he added.

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