Employers are not paying much, so why not operate side business?

Friday August 23 2019

 

By Benjamin Rukwengye

Almost every young person I know is running a side business or talking of one. That should tell you a couple of things, especially about the state of our economy; first, that it sucks!
What it also tells you is how little employers are paying. People must hustle to survive because ends must meet. So because almost every young person is underemployed, poorly paid and overburdened, all of us are being forced into entrepreneurship. “It’s the economy, stupid!”
To supplement their meagre incomes, my friends have resorted to side gigs in agriculture, or selling fancy (happy) socks, juice, designing clothes and cakes during and after-work hours. It does not matter whether you are good with money, managing ideas and things or aren’t a trained salesperson. You have more bills to pay, right?
The other supposition is that people and their interests are not exactly linear. So I can be a good accountant who is a good photographer too. Or I might be an amazing data analyst that also throws a great barbecue. And because you are not paying me enough to live on, I make the extra from my other interests. A friend in the business told me this week that waiters in top bars around Kampala are paid about Shs25,000 ($7) a night. In the formal sector, the average entry level pay is Shs350,000 ($100). But most of these people have ideas, some, already in existence.
How do employers augment their workers’ interests without it affecting output? You might even find that the staff are happier, and more productive, if they aren’t spending half the company time sneaking around to do their gigs.
But at a more structural level, how do we create a favourable environment specifically for local innovators to start and thrive? The fact that these small businesses, swimming against the tide, haven’t closed is perhaps, a pointer to their potential. Which then makes me wonder, in whose interest is it that these nascent ideas and enterprises don’t fold under the weight of their founders’ inadequacies; but mostly that they are unhampered by systemic constraints such as access to capital, markets or irreconcilable taxation regimes?
You might have heard that Uganda is ranked (one of) the most entrepreneurial country in the world. But you wouldn’t tell, if you listened to the Minister in charge of Investment. Her uncanny obsession with attracting foreign investors without even linking them to the burgeoning local entrepreneurial industry is anything, but clever.
About 10 years ago, entrepreneurship was introduced as a subject in high school. But if you are familiar with our teaching methods, then like me, you don’t expect that it has served much purpose. It is reported that soon, tax education will be added onto the curriculum. Great move. But why is it not part of entrepreneurship. Entrepreneurs pay taxes, no?
We can attract all the foreign investment we want, but if we aren’t investing enough in enabling local ideas to transform into enterprises and doing whatever we must for them to transition to SME status, we’ll be building a pseudo-economy whose engine we don’t own, and the conversion rate to employment will just never take off.
Even as we glory in every new factory launch, we must also ask what we are doing to ensure that Ugandans who are starting out are given every possible chance to succeed, to create jobs and opportunities for themselves and for others. That they are given a stake in the economy. And that is the government’s role – because it makes the laws and has the power to.
The economy isn’t creating enough jobs, even before the discussion on skills has started. Which means that URA can’t collect much for us to live decently and there is nothing to save with NSSF. Basically, things are bad now and tomorrow.
The NSSF, our national saving scheme, has 2.5 million registered members, but only 800,000 make monthly contributions. In 20 to 30 years, most of the people reading this column will be closing in on retirement but, probably without NSSF savings to fall back on.
Right now, they have to contend with every new wedding invite, child birth, burial, rent, school fees and medical expense – all of which are constant reminders of how bad things are.
All they have are dreams and ideas that could potentially save them from drowning (now) and guarantee them some sort of social security in future.
Mr Rukwengye is the founder, Boundless Minds. rukwengye86@gmail.com

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