Lack of patents and small cash investments for African youth undermines innovation

PUBLISHED: Tue, 29 Mar 2022 12:28:13 GMT
Odrek Rwabwogo

By September of 1969 when I was born, Makerere University in my home country of Uganda was the most prestigious African university any young person with the rare means to access an education could aspire to. But the college, then affiliated with University College London, had less than 3000 students. This was out of a population of 9 million, some 96 percent of whom were subsistence farmers – simply growing food for survival with nothing left to sell – a typical pre-industrial society.

Like many African nations, Uganda had gained its independence just a few years earlier. Across the continent then was an opportunity for us to grow our countries. However, those few who could access university went not with an aspiration to enter the hustle and grind of enterprise; rather, in the hope of filling the coveted positions left by departing colonial offers. Families sacrificed much and risked everything to keep their children in school. Even of those who enjoyed access to education, many struggled to pay the fees and students would often have to cover long distances on foot every day. A government job at the end of all this promised security and comfort. Our nascent enterprise and innovation sectors seemed to offer just risk and uncertainty in comparison.

As a result, enterprise and creativity weren’t well promoted at school and at family levels – a problem that persists to this day. Moreover, with graduates then few, the government sector could easily absorb them all. Milton Obote, then President of Uganda, sought to encourage more indigenous Ugandans into the economy and enterprise building, but those who could understand the management of a business were rushing into government instead. Manufacturing, critical innovation and trade craft were instead dominated by Uganda’s small Asian community that had been extracted from their homeland by the British to build the Uganda railway line a century earlier. The resulting success of Asians in the Ugandan economy coupled with their limited intermarriage with local Ugandan communities angered Obote’s successor, the dictator Idi Amin, who driving a wave of populist, anti-Asian sentiment oversaw a mass expulsion of some 50,000 members of Uganda’s Asian community in 1972.

50 years later and happily the Asian community has long since been welcomed back, and continue to play an important role in growing the Ugandan economy. Uganda now has a population of some 44 million and a USD 44 billion economy. There are now more than 50 universities and the old Makerere has well over 40,000 students 10 percent of which are postgraduates studying more than 139 post graduate courses. But it seems old habits die hard. The number of registered enterprises – about 600,000, are just twice that of all public servants combined. Enterprises are still few and so are the tax payers: some 1.8m in an adult population of more than 25 million.

Though the shift to enterprise is slowly gaining pace, a secure government job remains for many young Africans a more attractive prospect than fighting to create their own businesses and take risks – the very risks needed to innovate and set the stage for a new economy for their country. One exception is Hillary Nuwamanya, an orphan whose guardian pushed him into studying law. Hillary skipped classes to run his own fish and chips restaurant in the very downtown dormitory he was renting just below the university. “I knew that if I don’t innovate around food and food products with the student market around my residence, I would struggle to get a placement in government after my law degree” he told me yesterday at the Tomosi Foundation offices in Kampala. Tomosi foundation is our business charity arm that offers small seed capital to young innovators – one of the few emerging in this sector in Uganda.

Hillary’s small, rented one-room restaurant he calls ‘The Tasty Dine’makes just over USD 50 a day which he uses to pay to study business instead of law. He doesn’t need a financial guardian anymore, but wants more financial management knowledge. He is seeking a USD 1500 capital injection to buy a new glass refrigerator so his customers can see his array of fresh juices, as well as a table and a used cooker to expand his operation. The foundation will support this growth by offering him the money at 5% interest for a year – the lowest rates on the market but still out of reach to hundreds of young people turning away from the traditional search for a presumed secure government job to start their own businesses and support their families in the current period of post- COVID lockdown economic recovery.

But what do young African entrepreneurs like Hillary need as critical support? First, technical knowledge to keep working and expand their businesses. Second, small seed capital at very low interest rates and finally – and more importantly – free patents on key soft and hard technologies from developed markets in food, pharmaceuticals, transport and energy so they can infuse their enterprises with new thinking and supply the expanding market on the continent.

If we do not do this, the benefits of creating a free continent-wide trade zone (AFCTA) will pass this generation of youth by as their markets remain flooded with cheap products that could be made here if it were not for patents locked onto them by developed economies. With more than 8000 products that can be traded between AFCTA member countries, our young economies are losing more than USD 5 billion in multiple African currency conversions alone with some large countries like the DRC importing more than 60 percent of all food that could be grown, packed and packaged locally by young people.  This could all be fixed at home.

Odrek Rwabwogo is the senior advisor to the President of Uganda, an entrepreneur and the Director of Tomosi Group

Our mandate is to drive the coordination of export systems for Uganda and help double revenues earned by the country by 2026. We also train and support young entrepreneurs to build their startups in order that they create own jobs along with the teaching of national collective values to them to shape a united and prosperous Uganda we need.

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