Spare a thought for small businesses

NELSON KITUUKA

A few tweets that caught my attention this season are, a bunch of matooke in some villages have hit 1,000 Ushs and farm gate prices of milk have hit 200 Ushs per litre.

As everyone tries to make the best of this crisis, plans are being laid out to stimulate the restarting of the economy but in my view little or no thought is being paid to exactly how those plans will trickle down to the man on the ground. (Muntu Wa Wansi)

For the last two years, I have spent time working on the creation of a digital bank that is targeted towards trying to find an efficient means (by use of technology) that can provide ordinary people with working capital that can help them participate in enterprise and spur their small business in general.

After a two months hiatus during which time we were trying to figure out where the economy would land as a result of the lockdown we have reopened our taps but with a lot of emphasis being put towards talking to clients and understanding what they are experiencing in the market.

Firstly, maybe it's in Ugandan "cultural thing" but most working adults at every level seem to have more than one economic activity they are engaged in to make ends meet. Some of the books but most of the books.

When you ask them what they do, for example, someone will tell you they are an automotive mechanic. However, if you asked them how they make ends meet they will tell you aside from being a mechanic they grow and sell mushrooms, supply water in their local area by the jerrican, and also dig boreholes as business to augment their earnings from "formal" employment.

For that reason somehow during this lockdown with the arcades, schools, markets, public transport being on closed, many were able to hunker down and pull through without scenes of widespread hunger and malnutrition being shown in the streets because for once their side gigs became the main gig.

What our interface with clients has however revealed is that there is generally a fall in confidence in where the economy is going.

Many of the clients we interviewed are finding that the problem now is they produce their goods/services but there is no buyer for the products as there used to be.

Large aggregators or purchasers of goods and services have for the most part shut down or greatly reduced their operations and the dominos that result are that the middlemen in the chain have also followed suit.

As a result of the loss of confidence in the market more and more small business is now liquidating their enterprise call it Boda Boda, Taxis, chicken houses, closing arcade shops, etc because they have determined that even if COVID was sorted tomorrow there will be no customers to keep their enterprise in operation.

I have noted that in the corridors of power the main talk is about recapitalisation of UDB, UDC, elections, and radio, and TVs.

I am not a politician but maybe some thought should be extended into for once giving contracts or tenders nationally that put money into the hands of as many ordinary people as possible.

Why can't the government give out tenders for seed suppliers to distribute their seeds to farmers in their areas and based on output the suppliers are paid for the seeds delivered and the supervision of farmers to yield the highest output so the army is used to supervise this process as opposed to the logistical challenge of giving away seeds to farmers who don't have the working capital to plant and nurture the plants to harvest.

The same goes for TVs and radios.

Most feature phones in this country have radios anyway, so instead of buying and distributing radios, funds are availed for ordinary people to expand the reach of the telecommunication networks and supply and charging of phones so that the effective reach of the messages for politicians during elections is broadened.

There are so many examples of ways by which the government can set the rules and police them and let enterprises take over as opposed to government hoarding the funds and providing the proverbial fish as opposed to teaching the populace how to fish.

The Ugandan economy is like the Kenyan economy.

Both economies are created by the aggregation of several small and medium-sized enterprises that together create the total output GDP of the country.

If we spend our time financing big business through UDB whereby not a single business or factory can support even one district then our predicament will move from bad where it is now to worse.

So when I say share a thought for the muntu wa wansi I am saying find a way to ensure that in the government planning money gets to the small enterprise or cottage industry so they can pay for electricity, transport and store their produce without starving so that they can command better prices and find a way of supporting enterprises that have models that finance small enterprise, as they are, without all the bottlenecks of, books of accounts, cash flow projections, business plans, collateral security, tax clearance, etc.

After all, it eventually is the "muntu wa wansi" that consumes or provides raw materials for industry and if they don't produce we will have many examples of fruit and potato factories which can't run because no one is supplying them.

By working on the muntu wa wansi you in effect take care of big business. But you keep ignoring small enterprise and before long big business folds because they can't sell what they supply.

The author is an entrepreneur and managing director of Discount Cards Limited, Uganda's first digital credit card for the ordinary person built on a mobile money platform.