Bailout university startups

By Ronald Nyakahuma

The big running story lately has been about the proposed sh1.3 trillion bailout to some businessmen.

The Government is hoping to keep those companies in business so that they continue providing jobs and generating taxes.

However, I have been thinking about how many companies and jobs the sh1.3 trillion can generate if indeed the Government is planning this bailout of a few companies to save jobs and keep generating revenue from them.

I am a technology entrepreneur and a business mentor. Every day I run into brilliant business ideas from equally very brilliant ICT innovators but there is usually one major problem; lack of money to kick start these businesses.

So I went on to think about what sh1,300b can do that would make Uganda an economic power base in the East African region. I will only look at one sector - technology.

I will also take one university as case study and that is Makerere University.

Makerere University is estimated to produce over 3,000 computing graduates every year. Any computing student is required to solve one problem with an ICT solution as the final year project. That means we have over 1,500 possible business created every year. This is what actually happens at Makerere University.

Students are grouped in more than two people under a supervisor normally a lecturer. After which they are sent out to go and find problems faced by people, document them indicating the respective proposed solution. A proposal is submitted to the supervisor and if accepted the students will build that solution under close supervision of the lecturer. A detailed report is done about the solution and final presentation is made to the jury normally made up of senior lectures with a working solution (minimum viable product).

When judges agree, it is a good solution that works well, students are given good marks with a degree and sent to go hunting for jobs leaving the solution in the library.

When you look at all those steps, every computing student does start a business at university complete with a working product and founders, which I will call university startup. Assuming every year 5,000 university startups from all universities of Uganda are given sh10m each to deploy what they have built. Every year 5,000 companies will be created. Sh1,000b will produce 100,000 companies in 20 years.

We all know some companies will fail, others will somehow succeed and others will massively succeed to create over 1,000 jobs direct and indirect.

Now assuming we get success rate of just 10%. Meaning 10,000 companies will be created in 20 years.  And a massive 10 million jobs will also be created.

If 10 million Ugandans and 10,000 companies pay taxes. The government of Uganda will be able to generate sh200b every year in tax revenue. Now, what if we achieve success rate of 50%? Do the math.

ICT-based business usually need very little resources to start. I started my business with less than sh300,000 and invested my time and skills building the solution. My solution has been used by over 3,000 people in less than four months.

The eco system of solving problems with ICT innovations (startups) is complete for Uganda and Africa. All we need is to boost innovators that will build those solutions.

The Government is investing in small scale businesses that are very difficult to grow and tax. ICT businesses naturally grow rapidly and create huge opportunities. Imagine how many opportunities has Mobile money innovation created? In the same spirit imagine if we have 10 such innovations?

Do you want to create jobs or increase tax revenue? Please invest in ICT innovations.

The writer is a technology entrepreneur and a business mentor