Stanbic Bank Uganda’s business incubator on Friday graduated 420 entrepreneurs from 119 small and medium enterprises at a ceremony held in Kampala.
The incubator offers a 10-month entrepreneurship development program aimed at improving the operations of local small and medium enterprises and formalising them. For the group that graduated on Friday, the focus was on getting the companies to desired standards in the oil and gas industry — with the aim of improving local content in that sector.
It was the incubator’s second graduating cohort since opening early this year. The first group, passed out in May, was made up of 94 entrepreneurs from 34 companies.
Uganda’s future and growth depends on the level of involvement of small and medium enterprises in the economy, said Wayne Cook, Stanbic’s head of business banking. Small and medium enterprises employ over 2.5 million Ugandans and make up 90% of the country’s private sector, according to the World Bank.
Patrick Mweheire, the bank’s chief executive, said Stanbic started the incubator to help increase local participation in key infrastructure projects and sectors. He said it was “unacceptable” that local participation in the Isimba and Karuma hydropower projects—constructed at a combined cost of about $2.5bn—was only 8%.
Research by Stanbic found that the main reasons behind the failure of SMEs were lack of access to markets, non-compliance, and poor governance, Mr Mweheire said, and the incubator’s training was designed to help mitigate those problems.
The ideal participation rate of local content in the oil and gas sector, which is expected to receive $15bn in investment over the next couple of years, should be close to 30% according to Mr Mweheire.
The 119 companies were categorised into four groups depending on the nature of their business; fabrication and construction, camp services, transportation and logistics, and hospitality. The incubator, however, plans to include companies outside the oil and gas sector and will start working with agriculture firms next year.