Uganda IT entrepreneurs to benefit from $8m grant from MGF

The ICT and select sectors in Uganda are poised to benefit from an $8m grant from the World Bank aimed to increasing competitiveness of entrepreneurs.

The five year Matching Grant Facility (MGF), launched last week at Hotel Africana in Kampala is one of the components of a broader $100m Competitiveness and Enterprise Development Project (CEDP) from the World Bank to Uganda.

The eligible specific sub-sectors for the MGF are ICT, Tourism and Agribusiness with a bias on coffee, horticulture, fisheries, edible oils, grains and pulses.

According to Gideon Badagawa, the Executive Director of the Private Sector Foundation of Uganda, the body managing the facility, these sectors were earmarked because of their potential.

He explained that the specific objective of the MGF is to enhance enterprise competitiveness by enabling Micro, Small and Medium Enterprises access matching grants of up to 50% towards use of sub-sector specific Business Development Services (BDS), skills development and increasing productivity through raising standards at the firm level.

The MGF will support innovation, managerial and technologies and knowledge upgrade, enhancement of market intelligence and access, and strengthening of backward and forward linkages. The MGF will also encourage both the adoption and the implementation of world class industry standards, norms and ratings.

“These are interest free grants. These funds are for serious business people meaning you contribute 50% and we add the other 50,” Badagawa stressed.

He also added that ICT, particularly Business Process Outsourcing (BPO) has been identified as one of the high potential areas for stimulating growth through business development and employment creation.

He explained that the IT equipment/hardware industry which is highly capital intensive and dominated by large multinational corporations, is barely represented in Uganda today. On the other hand, IT services, particularly software development or outsourced services, which are more knowledge- and skill-intensive, have started expanding.

“It still needs more support majorly to make it visible both locally and on the international market. It is against this need that the Government considered the sector for support under the Matching Grant Facility.”

The BPO concept is applicable in various areas of business including; Software publishing including the publishing of ready-made (non-customized) software such as operating systems, business and other applications, computer games for all platforms; Computer programming, software development; Consultancy and related activities such as ICT technical support; Call Center Services; IT enabled services such as finance and accounting, Payroll management, legal services among others.

Kiseka Daniel, the Manager MGF at PSFU, Each eligible private sector firm may obtain grants up to a cumulative value of $100,000 within the life of the project.

He also added that the entities to be supported include; private enterprises, sectoral and professional business associations, among others.

Under the MGF, individual firms will be assisted to access business development services in order to address critical challenges from introduction of international standards such as ISO and HACCP to consumption.

The funds will be used towards accessing technical assistance to provide training in management, business plan preparation, marketing, record keeping and finance and production techniques and technologies in order to improve quality in the sub-sector.