We need more Entrepreneurs not Grant-preneurs
“We need more entrepreneurs, not more grant-preneurs.”
Businesses that can create real value, not just spend investors money.
Talked with Onzimai Fredrick Daniel with Private Sector Foundation Uganda (PSFU) at The Global Impact Investing Network in Copenhagen for our micro-podcast series.
120,000 jobs created in Uganda, made possible by working with partners like Grainpulse Limited, EzyAgric, Mukwano Industries U Ltd., Movit Products Limited, Zenith Business Strategies Uganda with donors like The World Bank and UNDP.
Podcast Transcript
Jacob: [00:00:00] So we’re here at the Global Impact Investing Network Investor Forum in Copenhagen. And I’m here with Frederick Daniel. And tell me about your organization.
Fredrick: Yeah, thank you very much. Once again, I’m Frederick Daniel Onzimai and I work with the Private Sector Foundation, Uganda. So we a private foundation.
We are the apex body for the private sector in the country. We aggregate about 300 associations that represent private-sector companies. In short, so we have about a member base of 2. 5 million businesses that we represent. A lot of our work is in advocacy. We support these businesses speak to government to address their issues, but also because of our position, we also work with them on a key challenge.
In Uganda, particularly on unemployment. So we work with these businesses to create jobs. And we have a number of partners that support that journey. One among them is the MasterCard Foundation [00:01:00] who is hopeful with whom we are currently implementing the Young Africa Works project in Uganda and other donors like the World Bank, EU UNDP, so we work with a number of donor partners.
But our main agenda is really job creation and accelerating the growth of our local companies in the country, both from small micro to large entities.
Jacob: So tell me some success stories with that.
Fredrick: Well, we have been quite I’ll say with a bit of challenges, we have been able to. and creates about 120, 000 jobs working with a number of large enterprises in the country. Like Mukwano, Grain Pulse Hot Loaf. Nice House of Plastics so yeah, those are the big corporates in the country and we’re working with them to really create jobs.
Jacob: Pick one of those and what was, what did your organization specifically do for them to help them create jobs?
Fredrick: Right, I’ll pick let me pick out Grain Pulse because that’s one of the [00:02:00] projects I directly support so I quite know a bit about their model. At the beginning, they were trading mainly in coffee. Looks out and sees there’s a gap, does a merger with K& S group so that they could move into the space of fertilizer and production of fortified foods.
So yes, they do the merger, they come out as Grain Pulse, and they raise I believe debt from IFC. So this debt is supposed to build the factory, which they do. Now you have a factory built you have a lot of, production capacity, but then you don’t have raw materials and also your new company and the market needs these things, needs the fertilizers, needs food, fortified food.
That presents an both a challenge and an opportunity because they need raw materials. They need outgrowers, they need people to grow maze, barley, soy gum, coffee so that they can supply them and they can produce. So that’s a good challenge for [00:03:00] us. So, we partner with Grain Pulse and we say. We are going to help you solve this challenge.
We are going to support you in deepening your understanding of the value chain. We are going to support you in digitizing this so that you can trace where this food is coming from, who is producing for you. We are going to support you pass on some of the working capital challenges to the farmer by making the farmer able to get his own credit so that you don’t always have to pass on credit to them from your coffers.
So we start this partnership in 2020. Unfortunately, we are coming out of COVID. So it was a bit challenging, but then we soldier on. So we directly support Grain Pulse in taking down a learning system, how they are going to train. They bring a, provider called Easiagreek.
And Easiagreek is doing Easiagreek is doing digitization. So they digitize their, their content, training content. They profile the farmers. They know the acreage. They know what each farmer can produce. [00:04:00] Along that journey, we support them to get more farmers on board and convince these farmers that look, farming is a worthy business.
You can, you can do it, but don’t do it one season, do it every other season. So we support them in convincing these guys to do that. We also support them in retaining the farmer because that’s also another challenge. The farmers lose interest after one season and they move away because these are young farmers.
So we support them through that journey. At, up until the end where the farmer is sustainably engaged in farming and supplying Grain Pulse directly. Also, one interesting model that we supported them to roll out was what they call the, the Bion Corp. So, because most of these farmers that they are working with plant maize, one of the biggest challenges with Ugandan maize is aflatoxins and aflatoxins later on cause cancer causing elements.
So how do you remove the aflatoxins? And aflatoxins are normally coming at the point of post [00:05:00] harvest when you’re drying. So we support Grain Pulse to convince the farmers that you don’t have to remove the maize from the stem. Keep it there until I come and buy it. So when I buy it, I’ll take it directly to my nearest dryer. I’ll not have aflatoxins in this. It will not, it will not touch the ground. It will be from your garden directly to my dryer. Straight to the factory that processes the eating 2 45 foods and other parts into, into fertilizer elements. Soap, really you reduce soap because of that, the losses are reduced.
The farmer gets more money upfront. And yeah, it has been a good story and we have learned a lot from it. So that’s really one of our stories. We have many in different value chains in the oil value chain with ano in trade with MoVI. In construction with, with a firm called S. M. Catherine. So, yeah, they’re different channels, different stories, yeah.
Jacob: How’s the organization structured? Is this an NGO? Is it a for-profit [00:06:00] entity? Is it a government,
Fredrick: I’ll start with, we are not a government entity. We are often thought to be a government entity because we engage a lot with them, but we are not a government entity. We are not for profit organization.
And we are, we are structured as a company limited by guarantee. So our members our shareholders associations who represent these businesses and other corporate members who also have that vested interest in the business environment. So that’s really how we’re structured. So, we have three strategic arms the members the operation of the foundation and growing its own internal resources and then a program side I belong to the program side and in the program side we work with other donors and philanthropic agencies to to solve social problems.
Jacob: And what are you excited about in the future with your organization?
Fredrick: Well we have learned a lot over time, and right now we are raising what we call the Private Sector Catalytic Fund. And our [00:07:00] learning has taught us a lot on how we need to do things differently. But, the key thing is how to be sustainable.
So we have done so many short programs, and we have learned that we need to build in an element of sustainability. We need to guide the general space on how to make grant investments so that at the end of the day we have very strong entrepreneurs and not grantpreneurs like we’d like to call them now.
Which is some of the bad, the negative impacts we are learning from our work. So I’m excited about the Private Sector Catalytic Fund. I’m excited about our Zimba Impact Fund, which is focused on the construction sector. I know we’ll be able to change Uganda into over the next 10 years, it will be a very different space.
We’ll have high, we’ll have a very low SME mortality rate. Many of our SMEs will thrive and grow. And we know and think that we’ll have very strong businesses. The next [00:08:00] generation of the large businesses that will be in Uganda in this phase. And with our work, with the work we’re doing, we are going to see that happen.
Jacob: What are you most looking for right now?
Fredrick: We’re looking for capital and not necessarily consensual capital. We’re looking for more capital into the country. impact capital finance-focused capital, both. We want both. We’re also looking for learning. I think those are the two main things we are looking for coming here.
We have to learn a lot. And that’s why you see, we are always, we are the gene, we are interacting with people that have learned this a lot. We want to get more people we can learn from. We don’t have to do, we don’t have to make the same mistakes that have been made before. So our biggest challenge is really finding partners whom we can learn from, whom we can build some of these solutions with, but that understand the Ugandan, the Ugandan context.
I think that’s one of our biggest challenges. We have a lot of people that support us, but understanding the context or the community that we are [00:09:00] trying to solve these problems for, how they think, how they behave, what they anticipate.
Jacob: How would you describe an ideal potential investor for you?
Fredrick: I’ll say one that is willing to teach us too, I mean, yes, they’re an investor, but maybe they’re an investor because they know a little bit more on how these things should be done.
One that is willing to teach us, but also willing to learn from us. One that is flexible enough to build this solution so that it’s optimal to the community. Because you can only make money, whether it is consensual or finance focus. You can only make money when the people you’re giving this money to can sustainably create it.
So we want one, want an investor that is aligned with that, with that mission and vision. Yeah, that’s, I’ll say that’s what the kind of investor we are looking for.
Jacob: If somebody wants to try to find you online, what’s the best way?
Fredrick: You can just look up The Private Sector Foundation Uganda.
Our website is [00:10:00] PSFUganda. org, so you can find us there, you can reach out to there, we have a contact number and email that you can write to us. Website, Twitter, and LinkedIn, that’s where you can find us.
Jacob: Fantastic.
Fredrick: Yeah.
Jacob: Thanks for sharing your story and I hope you have a wonderful conference here.
Fredrick: Thank you.
Jacob: Thank you.
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