The Independent Uganda: You get the Truth we Pay the Price
How Ugandan MSME can benefit from its focus on strengthening the institutional capacity of Chambers of Commerce & Industry
COMMENT | David Bikhado Ofungi | The past decade has been associated with a revaluation of what corporate citizenry means. For a long time, companies were happy to park the Corporate Social Responsibility (CSR) vessel at the nether end of an annual report or the final few seconds of a corporate video tempered by an impatient credit reel. For better effect, the vessel was often draped in the livery of the benevolent corporate solving any one of Africa’s ills. Now CSR (the peripheral) has given way to the Environmental, Social and Governance (ESG) framework; the integral insofar as organisational strategy is concerned.
This course reset stemmed from the clarity with which the Sustainable Development Goals (SDGs) were framed, the translation of the same into government policy, and how enterprises could not only play a role in achieving those targets but also profit from them.
The emerging mantra about ‘People, Planets and Profit’ was catalysed by the undisputable evidence that Corporate Social Irresponsibility has serious societal and environmental implications, and the transmission of indiscretions via social media that has instant repercussions for brand equity. On the plus side, several global leaders had the courage early on to go against the grain in adopting strategies that centralised sustainability – Indra Nooyi’s ‘Performance with a Purpose’ at PepsiCo was an early standout in this regard.
With most enterprises falling in the Micro, Small and Medium-sized Enterprises (MSME) segment (95% from a global perspective), a means via which the principals around sustainability and inclusion can be practically implemented needs to be simplified.
In this regard, the International Chamber of Commerce World Chambers Federation (ICC WCF) is just what the doctor ordered for economies such as Uganda’s given the centrality of small business and sustainability.
The ICC WCF focusses on strengthening the institutional capacity of Chambers of Commerce & Industry to support MSMEs worldwide. Further still, the ICC WCF under Chairmanship of Nicholas Uribe includes the all-important pillars of enhanced access of global markets and the digitalisation of MSMEs among four priorities in the 2023 – 2025 period. The circle is complete with the empowerment of women, and sustainability in business & climate action.
Per happenstance, the strategy that is under development for the Uganda National Chamber of Commerce and Industry (UNCCI) mirrors the one adopted by the ICC WCF. That said, a country like Uganda whose private sector made up mostly of informal MSMEs needs the message to be broadcast on a nuanced frequency. Add to this, the complexity around the different definitions of MSMEs within a country’s borders let alone in the international arena.
The solution board crucially needs to understand the rationale behind entrepreneurial endeavour in a given jurisdiction. While Uganda’s global ranking in relation to Total Early-Stage Entrepreneurial Activity (TEA) according to the Global Entrepreneurship Index (GEI) is high for example, the qualitative score of entrepreneurship in the same study puts us in the bottom percentile. The reason behind this is that the choice to start one’s own business is driven more by a lack of opportunity in the labour market rather than entrepreneurial zeal. This negative correlation between activity and sustainability has as much to do with large corporations not growing fast enough to absorb entrants into labour market (estimated by the IMF to be 600,000 annually in Uganda – circa 2018) as it does the inability of most MSMEs to achieve any level of competitiveness. The reasons for the latter are numerous and somewhat complex: from poor access and relatively high cost of finance to sub-optimum human capital development and low adoption of digitalisation.
Addressing the employment challenge lies at the feet of MSMEs who according to the ICC sustain 60% and 40% of global jobs and GDP respectively. Bringing it to our shores, an ICC Centre of Entrepreneurship that allows MSMEs to adopt practical means of addressing the challenges and leveraging the opportunities will be an important first step.
UNCCI’s role in this regard would be to adjust the dials to make the prescriptions work for the over 30,000 companies that comprise its rank and file. This ‘Member 1st’ strategy is particularly important as the chamber celebrates 90 years of existence in 2023 in a world that is much changed from before the Covid-19 pandemic let alone THE chamber’s colonial beginnings in 1933.
The importance of the ICC WCF’s deliberate assembly of the most diverse Global Council by way of geography and gender cannot be overstated. That the representation is populated by leaders of chambers from across the size and sophistication spectrum is also critical. Success will be measured by two important metrics: the first is on how the lessons from offshore find fertile ground in our home chamber, and the second will focus on our ability to channel our positives into global discourse.
Such, one would hope, will finally allow the colour and depth of the MSMEs coat to dominate the livery of our country’s enterprise.
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The writer is a Senior Advisor of the Uganda Chamber of Commerce and Industry and Member of the Global Council, ICC World Chambers Federation
