Youth in Uganda Work Toward Lives as Job Creators, Not Seekers
April is Financial Literacy Month in the U.S. To honor the importance of personal finance and the power of making smart decisions about the money we earn, KWHS will be featuring profiles in April of teenagers from around the world who are champions of financial awareness and money management (see the Related KWHS Stories tab for last year’s profiles). Check in regularly to read about interesting young people who are learning skills to help them prosper and to live with financial confidence.
First up: Ssebuggwawo Jovan, an 18-year-old high school junior from Panorama Secondary School in the Mukono district of Uganda, Africa.
Uganda, a country in East Africa, is known for its beautiful lakes, rivers and forests. Its economic landscape, however, is far less enchanting.
As one of the poorest nations in the world, Uganda struggles with the serious problem of youth unemployment. According to information published in recent years by the Brookings Institution, a non-profit public policy organization in Washington, D.C., that explores problems facing local, national and global societies, youth (aged 15 to 24) in sub-Saharan Africa were twice as likely to be unemployed compared to any other age group. With labor statistics that suggest that three quarters of the Ugandan population are below the age of 30, unemployment is hitting this country particularly hard. According to the organization Enterprise Uganda, 400,000 young people enter the job market annually for a mere 9,000 new jobs each year.
Herbal Soap, Vaseline and Baking
Many young people in Uganda face the challenge of finding work and earning wages to support themselves and their families. Entrepreneurship has become one option, with an increasing number of Ugandans starting small businesses to generate income. Last summer, Uganda topped a Global Entrepreneurship Monitor ranking of the world’s most entrepreneurial countries.
“Six in every 10 families in the places I have lived are involved in some form of business, mostly to raise money for food, school tuition and other needs,” says Elizabeth Gimadu, a director with Children Alive Ministries in Mukono, Uganda, a religious organization that works to empower children and youth in surrounding communities. “In my family, my mother did over 10 different businesses growing up until she settled for just two. Now, even though she is gone, her children carry on making herbal soap, vaseline and a little bit of her baking business. Many, many graduates have failed to get jobs after their formal education, especially in the areas of their training. For those who have found jobs, it is not in their fields of study. Out of my four siblings and me, just two of us have jobs now.”
Gimadu and her team, including Prossie Namagembe, are working to change those statistics through Children Alive Ministries’ Street Leader Program (SLP). Since 2013, 27 high school students have met regularly outside of school hours to build their entrepreneurship skills and develop into, as Gimadu says, “self-reliant young men and women” who are able to support themselves through a business and ultimately become job creators, not job seekers.
When considering what business to launch, the SLP team explored options that required little start-up capital and production time and had an available market and easy access to materials. Their product of choice? Liquid soap.
Ssebuggwawo Jovan admits that when he joined the Street Leader Program in 2014 at the age of 16, he knew very little about soap making, finding a market for your product, selling, and managing the money you earn. With each soap batch that he and his SLP partners produce, he deepens his knowledge about business and people. “At first, I saw that the process was very easy because we mixed salt and water until it dissolved and then we added other ingredients like ungalu, perfume, urea, caustic soda and colors,” notes Jovan, a spiritual teen who loves snacking on doughnuts and playing football (soccer) with friends. “Now, after two years of doing this, I know the process much better.”
The SLP crew produces a new 80-liter batch of soap (a little more than 20 gallons) once a month during the school term and once a week during holidays. Through trial and error, they have built a market for their product, starting out by selling to the Children Alive Ministries staff and then expanding to family and neighboring organizations, such as OFF-TU Mission and Reach One Touch One Ministries. “The agreement is that every teenager takes part in the making and marketing of the soap,” says Gimadu. “They stay in different villages and they meet and associate with different people and tell them about the business. These people spread the word, and the market has been growing.”
Bring Your Own Jerrycan
Since they actively began making and selling the soap for market in 2016, SLP has earned 350,000 Uganda shillings, which is about 100 U.S. dollars. For now, all profits are reinvested into SLP’s projects, especially the soap-making. Expenses can be high and pricing is negotiable, especially due to the cost of packaging the soap. They sell the soap in jerrycans, which are costlier than the raw ingredients used to make the product. SLP has therefore adjusted its strategy to reduce the price for customers who show up with their own jerrycans.
“The market for the liquid soap is sometimes difficult because buyers want it at a reduced price. Different people are not the same in terms of finances,” says Jovan, who admits that his SLP group has had some challenges agreeing on goals. “I have made some mistakes, and from this I learned that it leads to having fewer buyers and reduced profits.”
Jovan, who hopes to someday become an architect, believes that his new entrepreneurship skills will prepare him well for the future. “I have learned that the more you invest, the more you gain.”
Adds Gimadu: “With the skills they are learning, we believe they have more than just the formal education they get when they graduate from university. They will be in a better position to begin personal businesses or to be employed in businesses and companies that need their skills and work experience.” And as skilled leaders, students like Jovan may well create new opportunities for the Ugandan communities in which they live and work.
Related Links
- The Guardian: Uganda Is a Land of Entrepreneurs
- Brookings Institute: Youth Unemployment Challenge in Uganda
- Panorama Secondary School Global Money Week Video
- Global Entrepreneurship Monitor Report
- Enterprise Uganda
- Kiva: Loans that Change Lives
- The Challenge of Global Youth Unemployment
Conversation Starters
What are the realities of youth unemployment in Uganda?
Why did the Street Leader Program choose to start making liquid soap and what have been some of the steps they have taken to build their market and figure out their prices?
Using the Related Links tab, read The Guardian article describing Uganda as the land of entrepreneurs. Yes, the country has many micro-businesses, but do they all survive? What are the challenges of entrepreneurship in Uganda?
Why is youth unemployment a serious global issue?
I think the youth unemployment rate in Uganda is somewhat frightening, especially considering the youth of the country make of ¾ of its population. Because of this extensive unemployment, it only makes sense that the economy of the country would be suffering. I admire those in the Street Leadership Program, however, for going out of their way to try and change the way things are, rather than settling for less. It takes a lot of strength to work for something like that when harsh statistics and facts are staring you in the face. Their dedication is something to really be impressed with.
Even though SLP has done a commendable job, but it is still in shallow waters. When it will come up in the real market, it will have to face the bigger giants and these companies would not have a second thought in gobbling them up.
So the question comes up what has to be done to give these upcoming ventures, protection in the undeveloped nations, developing nations and the developed nations.
In countries like Uganda, these upcoming businesses with basic entrepreneurship skills, are like the early birds. They will probably survive and thrive in the longer run, as the economy is still young and developing. However the numbers presented in the article, show another picture, also. Elizabeth Grimandu’s mother started out with 10 small businesses but only 2 survived. The final conversion rate of start ups becoming successful is far too low. The only thing that can be done in situations like these is spreading knowledge about entrepreneurship, which is directly linked to the education system of the country.
Now looking into the case of developing nations, I have realized that the new startups tend to grow in the market to some extent because bigger business houses don’t have deep roots in the market yet. A startup with a good idea may still survive and give competition to an internationally renowned brand in the market (a good example of this is, how Flipkart and Snapdeal took control of the online retailing market from bigger companies like eBay and Amazon, in India). However, the Government still needs to interfere. The bigger giants should not be restricted but rather a safe path for the younger companies to grow should be defined by the Government.
Finally when we look at the developed nations, we see that even in the local market, young startups face competition from the already established business houses. This scenario becomes highly unfavorable for new businesses to come up, which becomes a deterring factor for anyone to go for a startup. This can cause a worrying decline in the number of innovative ideas entering the market, which can be catastrophic for a developed nation as without innovative ideas, foreign companies from the developing nations or the newly developed nation can take over the market. To ensure that this doesn’t happen, the government should interfere and make stringent laws, which would protect these upcoming ideas and startups. The bigger giants should be targeted by these laws in such a way that they don’t end up losing a major share in the market but also, are not able to form a monopoly.
Dear Jayesh:
Thank you for your astute and well-thought out comment on this important topic of youth job creation in Uganda, as it most definitely warrants a larger debate and discussion. I am commenting today on this article for two significant reasons. First, I want to respond to Jayesh’s comment by elaborating on a few of his main claims and to explore some alternative reasons as to why people should practice job creation over job seeking in undeveloped countries. Second, I will provide my own analysis and examination of the article, particularly from a labor perspective, in an effort to reveal that the potential success for job creation in undeveloped countries stems from a (global) labor problem.
Jayesh, your comment does a nice job of touching on the fundamental challenges entrepreneurs and small startups will face in undeveloped nations like Uganda, specifically your argument about prominent business “giants”, to use your language, will ultimately hinder the progress that can be achieved. While you in fact mention that SLP and other similar startups will act merely as “early birds”, but eventually not make it in the big leagues, one thing that I think you should consider Jayesh is why even invest in small startups / pursue job seeking in the first place, if they are most likely not going to succeed? To unearth a potential answer to this question (if there is one), I want to emphasize first the importance of building a strong foundation for small businesses (especially given an adverse economy), since you cannot build a tree without nourishing its roots. I believe it requires the drive and motivation of inquisitive minds like Elizabeth Gimadu and her compelling startup, Children Alive Ministries’ Street Leader Program (SLP). Given that Uganda is one of the poorest countries in the world, with an Gross Domestic Product per capita of 687.50, and with neighboring countries nearly equally as poor GDP per capitas, Democratic Republic of Congo (411.914) and Rwanda (721.202), entrepreneurs undoubtedly take a risk by investing into small startups, which are susceptible to economic collapse by both the nature of their home country’s unstable economy and by foreign companies willing to overtake market opportunities. But, like anything in life, risks should be taken since they have the chance to be rewarded, and that is a chance that both Gimadu and SLP were willing to do in order to taste success. While SLP is certainly far away from a major success, Gimadu did her research by using her mother’s 8 failed startups a guiding lesson for her own business, which is why she continued to pursue herbal soap making as her source for economic income.
Furthermore, small startups within the field of job creation shall be implemented by entrepreneurs because they do something job seeking cannot: build their own markets. In a place like Uganda where an item like soap may seem like a luxury, why sell such a far-off “accessories” when a company could sell, for instance, cheap clothing, or take advantage of the nearby Lake Victoria and equatorial climate Uganda contains to sell fishing rods that be used used for direct consumer consumption? While the answer may lie in the fact there is no apparent market for such items (roughly a quarter of the nation’s citizens live in poverty) or that the investor has a spare amount of capital to invest, in truth it is that job creation spurs its own market. Originally, SLP started selling their product of soap to staff members, which may not be looked upon as an authentic market if you go by definition. But eventually, as SLP was able to get its feet wet and as the flow of commerce started to pick up, they were able to expand to family and nearby organizations (OFF-TU Mission and Reach One Touch One Ministries), developing networks that were previously nonexistent. SLP’s self-developed network serves as a testament that job creation, macroscopically speaking, can move beyond the limits of job seeking by creating its very own markets. As in the words of author Erik Qualman, the “best results are often achieved well before you need a job, by consistently networking so that when you find yourself job-hunting you have a large network to work with.”
The second part of this comment shifts towards analyzing Uganda’s present environment for job creation from a labor point of view, specifically my own observations. As part of UN representative for my school, I am currently working on Sustainable Development Goal 8.1, which aims to promote stable economic growth and productive employment for all workers in undeveloped countries. Because I am deeply invested in this matter, I am drawn to communicate a few facts and trends about the current global labor unemployment scene and argue that job creation can ultimately serve as a better approach than job seeking. Globally, labor productivity (the basis for job seeking), which is measured in annual growth rate of real GDP per worker, is on a decreasing scale, as it has slowed from an avg annual rate of 2.9% from 2000-2008 to 1.9% from 2009-2016. So what exactly does this mean? This negative trend and drop in 1% translates to less production per given worker, which means less opportunities are available for workers are available for employment. Moreover, in a country like Uganda, where 400,000 young people enter the job market annually to compete for a meager 9,000 new jobs each year, this measurement can potentially double, or even triple. Surely if labor productivity is heading down a decreasing path, than job seeking, which will not even necessarily guarantee a job, will prove less fruitful in the future. Entrepreneurial approaches, however, may supercede this trend since essentially if a startup manages to succeed, it will naturally develop networks like the one SLP created which in turn by pass the need for a job / product from labor.
On my closing remarks, I want underscore the potential future success that job creation can harbor for undeveloped countries like Uganda. It is becoming seemingly impossible to “fix” youth unemployment in undeveloped countries through job seeking, and I think it can only grow worse by continuing to force youth into the failures of job hunting. Instead, we shall direct our attention towards the promise of job creation, which, given entrepreneurial drive, will spur new networks and markets for small startups like SLP that were previously inconceivable under prior modalities of economic thought, while also contributing to the larger, global trend of curing youth unemployment.
-Varun Sikand
It talks about how that most people from ages 15 to 24 are twice as likely to be unemployed than any other age group. A lot of young people in Uganda face the hardship of having to find work and earn wages that support their family. Entrepreneurship has become one option, with an increasing number of Ugandans starting small businesses to generate income. Elizabeth Gimadu is a director Children Alive Ministries in Mukono Uganda.This is a religious organization that helps empower children and youth in surrounding communities. Gimadu and her team are working to change the statistics through their program Street Leader Program. What they decided to do is to start a soapmaking business. “At first, I saw that the process was very easy because we mixed salt and water until it dissolved and then we added other ingredients like ungalu, perfume, urea, caustic soda and colors,” notes Jovan. This will help the kids get started into their own idea for businesses and for them to get income.