Virtual consultation conference on challenges affecting start-ups in Uganda

  • Private Sector Foundation Uganda

PSFU in partnership with The Innovation Village organized a virtual policy consultation conference on 11th February 2021 to interact with the different innovators, policy makers, development partners and the academia. 

Innovation is synonymous with the youth and has been identified as a key driver for economic growth, enhancing competitiveness and stimulating productivity of businesses in developing countries alike. Startup entrepreneurs, play a critical role in innovation which includes, testing and validation of innovative ideas to create a sustainable economic model. 

The key note address was made by Mr. Eric Sempambo- Investment Specialist, Business Environment PSFU, whose discussion was shaped around the preliminary policy challenges that is affecting Start up entrepreneurs. The presentation outlined the following issues; 

# Challenge Possible Implications Possible Proposal 
 1 Inadequate levels of entrepreneurship (Business management, (business idea/model identification)
  • Results into high levels of business failure
  • Leads to stagnation of business
  1. Capacity building support in entrepreneurship development- Business management
  2. Support  incubation centers to scale up across the country

Limited access to Start-up capital

  • Affects industry entry
  • Inhibits development of ideas
  1. Attract venture capital funds & seed funding
  2. Create grant scheme to support innovation

High costs of internet & access to internet

  • Deters innovation
  1. Complete National Backbone Infrastructure to improve access to internet

Lack of coordination & among players in the industry

  • Disorganization of the sector
  • Inhibits mobilization of funds
  1. Develop a start up policy, law and requisite regulations to regulate start up ecosystem
 5 Restrictions to accessing public market
  • Affects  scaling up of innovations
  1. Capacity building of start ups in e- procurement
  2. Preference schemes for start ups

 During the open discussion with participants, the following policy issues, implications and recommendations were raised;






Weak levels of entrepreneurship: Business model identification, business administration, finances management.

  • Leads into high levels of business failure
  • Leads to stagnation of business

a)      Prioritize Business Development services such as Entrepreneurship skills, business management, planning for Start- up entrepreneurs

b)      Promote incubation/innovation centers to scale up across the country and also extend information to start ups

c)      Skill young entrepreneurs in soft skills areas such as integrity, emotion intelligence


Limited access to Start-up capital from both Equity and commercial banks

  • Inhibits  industry entry
  • Inhibits development of ideas
  • Limits growth of the innovation space

a)      Create (60:40) credit guarantee scheme working through incubation centers for the potential start ups in the sectors

b)      Develop a policy that organizes the Start ups ecosystem to achieve efficiency, address intellectual property issues and also attract venture capital funds

c)      Promote business mentorship program through concept competition campaigns that help identify potential products and interest mentors to join.


High costs and limited access to internet

  • Deters innovation

a)      Complete National Backbone Infrastructure to improve access to internet

b)       Reduce the costs of internet to compare with our EAC trade partners such as Rwanda


Restrictions to accessing public market and High costs of taxation

  • Affects  scaling up of innovations
  • Increases doing business costs

a)      Build Capacity of start ups in e- procurement and its requirements

b)      Subsidize the cost of UNBS certification for start-up entrepreneurs

c)      Provide preference scheme for start ups in the BUBU policy

d)      Harmonize the licensing regime for the start ups especially in IT sector

e)      Exempt the DTS costs on products of Start ups

The conference was closed agreeing to a way forward which includes among others; developing a position paper on the need for start-up policy to address the aspects below:

(1) organize the sector

(2)address intellectual property issues

(3) provide business development and;

(4) provide conducive business environment



PSFU is collaborating with the MasterCard Foundation to co-implement (anchor) Young Africa Works – Enhancing Lead Firm Structure for Youth Employment Program. The intervention targets creation of 300,000 sustainable work opportunities in 5 years for young people through strengthening the capacity of private sector to efficiently produce and sell their products in expanded markets, developing new diversified financing mechanisms as well as growing the capacity of business leaders and their support service providers to expand their enterprises. 


The Innovation Village is also one of the co-implementers of the Young Africa Works Strategy addressing the key challenge of youth job creation in the Uganda marketplace. Together with key strategic partners from public, private, academia and development communities, The Innovation Village offers a comprehensive ‘ecosystem’ approach to building Ventures (or Companies), i.e. making a market for entrepreneurs, which will, in turn, generate employment. The forecasted direct output of the program is 300,000 young people securing dignified and fulfilling work.