Implications of Poverty and Alleviation Strategies in Uganda
By K. Hayden
Roughly 10% of the world population – which is over 700 million people – live in abject poverty. As the greatest social determinant of health, poverty is predominantly driven by inequality. Situations such as overcrowding and uneven land distribution, in conjunction with disparities among equitable access to resources, also lead to scarcity in vulnerable regions.
Notably in Uganda, circumstances such as large family size, inherited health issues, and lack of skilled laborers are among the leading drivers of poverty. They are considered the world’s youngest population, with a youth unemployment rate of around 62%. Countries with a youthful population have high numbers of young people and smaller numbers of older people.
Since there are more potential workers in a youthful population, there is a higher potential for income. However, many of the employment opportunities available are in the informal sectors, instead of in developing businesses. The government does not tax informal wages. This relative instability creates a reliance on unskilled labor.
Also common among youthful populations is a higher rate of disease. Many governments do not handle disease outbreak well, which can jeopardize their future economic stability. This poses a myriad of issues as children are far more likely to die of illnesses than adults. Those who are working likely face a considerable responsibility to support and provide social services essential to vulnerable populations. Vulnerable populations usually consist of the children and elderly, who are more socially and economically dependent (United Nations).
In Uganda, and in many similar countries, it can be both challenging and expensive to register a new business. While ranked the world’s most entrepreneurial country, Uganda has historically faced issues with business growth. Challenges ranging from high levels of corruption to inefficient government services have hindered potential business growth.
How Business Can Help
In order to foster economic development and provide dignity, business is key. Entrepreneurship creates programs and projects, which are aimed at improving living conditions in underdeveloped communities. Tackling issues such as environmental pollution or inadequate housing is made possible by workers – and their employment helps to raise them from poverty. Secure employment allows people to remain independent and able to take advantage of the goods and services that businesses provide (ADEC Innovations).
Businesses should also ensure that they are respecting human rights, especially of the disproportionately represented, including persons with disabilities, women and children, and indigenous peoples. They can do so through various actions and solutions, such as creation of products and services tailored for lower income customers or investing in poverty eradication activities (SDG Compass).
When a business provides mentoring and education to their employees, they also provide dignity. Through mentoring, one may develop business skills in exchange for labor. These acquired skills can lead to higher levels of success for the individual.
When mentors provide expert guidance in a specific area, the mentee receives a specialized education and skill set that equips them for a successful career in business. Mentor/mentee relationships can also create partnerships for future business endeavors, which further boosts economic gain.
Mentoring is mutually beneficial for all involved. Mentors themselves may benefit from exposure to different perspectives, a rise in self-confidence, and increased job satisfaction. Mentees also gain much outside of career development. They may learn how to self-reflect, develop stronger communication skills, and learn from other’s experiences. Organizations also benefit from mentoring through higher engagement among employees, higher retention rates, and increased productivity (Guider).
Access to Capital
Beginning a business starts with access to capital – the funds and resources needed for operational costs and growth. For many, a sum that large is difficult to come by. Around 29% of businesses fail due to lack of sufficient capital, so partnering with someone who can handle the upfront costs can benefit hopeful entrepreneurs.
Access to capital provides the essential elements people and businesses need to regulate their economic well-being and promote savings. Other benefits include investment opportunities, job creation, and growth. Additionally, financial access can empower women, making it easier for them to build wealth and create small businesses (World Bank).
Business Connect aims to strengthen partnerships and collaborate across cultures, building businesses to help alleviate poverty in communities. We want to share tools for success and empower future entrepreneurs, rather than simply provide charity. In our efforts, we strive to provide access to capital, foster mentorships, and enable individuals with the tools needed to start a profitable business.
Lou Haveman, founder of Business Connect said, “[w]hen you look at a problem of the world and you can find a business solution, which brings profit to you and blesses people at the same time, you have found something that is very rare.” Through their partnership with Business Connect, Ugandan entrepreneurs have been able to find further opportunities to expand their businesses. Additionally, our business partners in Uganda have been able to do things like pay for their first child’s birth and install water filtration systems in schools.
We provide our products on consignment to local entrepreneurs, allowing them to have merchandise upfront. By having access to capital, business owners are able to turn a profit quicker and continually invest in their business.
Through mentorship, Business Connect equips entrepreneurs with the tools needed to begin new businesses. Learning the skills needed to succeed in business allows individuals to retain their dignity and to help others in their communities.
When we partner with locals to help them grow a business, it not only helps them better themselves, but also impacts their communities and ultimately their country. For people who would otherwise not be able to afford large expenses, the stability that comes with having a business uplifts individuals and communities.
If you would like to be part of this network, please connect with us. We are always looking for ways to make new connections and grow together!