Savings Digest - Issue 3

NSSF Hi-Innovator

Betting on Entrepreneurs for Job Growth

THINKING OUT OF THE BOX

NSSF Bet On Entrepreneurs Is Far From A Gamble

OPPORTUNITIES What budget may mean for SMEs BIG INTERVIEW

Bold Moves to Ignite Uganda’s Startup Ecosystem

July 2025 Issue 3. An NSSF Uganda publication.

NSSF Bet On Entrepreneurs Is Far From A Gamble

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Contents Big Story

NSSF Hi-Innovator Impact

6. NSSF Bet On

34. Impact Beyond

Entrepreneurs Is Far From A Gamble

Survival: How Hi-Innovator Transformed Kirangwa Investments Ltd

Personal Finance

10. An Idea First, Capital Later?

The Entrepreneur’s Dilemma

News

6

Big Story

20

14. What Uganda’s

Budget may Mean for SMEs

40. Economic

Developments and Outlook - Uganda

News Feature

43. SA Government

Uganda’s Boda-Boda Sector: A Digital Leap Towards Inclusive Social Security

to grow the Fund

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Regional News

20. Transforming

24. Growing businesses

50.3billion in Dividends from Airtel Uganda Savings Campaign for Kampala Market Vendors Market Insights

18. Facts And Figures

Big Interview

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39. NSSF Earns UGX

Plans to use Pension Fund Money for Industrial Policy Projects

46. NSSF Kenya

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Partners with Chinese Company to Bid for Road Project Personal Finance

News

47. Look Out For The

32. NSSF HI-Innovator

2025 NSSF Financial Literacy Webinars

Programme creates over 200,000 jobs supporting over 400 Businesses

Editorial continues on next page

Our Office National Social Security Fund Plot 1 Pilkington Road, Workers House, 14th Floor, Kampala

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© COPYRIGHT AND CONTENT DISCLAIMER This publication contains a mix of original in-house articles and curated content sourced from external sources. NSSF disclaims responsibility for third-party content and prohibits reproduction of this publication without prior permission, except for brief quotations and non-commercial uses.

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Editorial

NSSF Hi-Innovator and how schemes can create their future Esteemed Readers, When social security or pension schemes mature, panic sets in. According to the American Academy of Actuaries, this happens when the obligations of a social security or pension services provider become larger compared to its source of contributions (in short, what the provider is giving out is much more than what they are getting).

Several factors account for this, but the most widely cited is a combination of increasing benefit payouts, an ageing membership, and a stagnant job market.

In Uganda and most of Africa, our social security and pension schemes should not have to worry about this problem because the population is younger. For instance, about 50% of NSSF Uganda’s membership is below 35 years. In addition, according to the Uganda National Population and Housing Census 2024, about half of the population is under 18 years old.

That said, African economies are not creating enough job opportunities to absorb the people seeking employment.

Because of this, in the future, however distant, mature social security and pension plans could become our problem.

Replicated over many years, could this unorthodox intervention, thanks to the Mastercard Foundation and NSSF Uganda, be the catalyst the innovation ecosystem needs to spur job growth?

Experts advise that the best way to mitigate the problem is to start addressing the challenge before it crops up, that is, before the social security or pension plan becomes mature.

This brings us to the NSSF Hi-Innovator programme, which is fast becoming a model on how social security or pension schemes are turning to unorthodox means, counting on the entrepreneurial class to mitigate maturity risks.

This programme, now in its sixth year, has provided valuable lessons. When they get support through seed funding, entrepreneurship training, and business development support, start-ups and small and growing businesses can go a long way in supplementing government efforts at job creation.

The evidence cannot be ignored. Over 430 small and growing businesses have accessed seed funding, and over 81,000 people have benefited from financial and entrepreneurship training in the Hi-Innovator programme. Critically, it has led to the creation of over 202,000 direct and indirect jobs.

Replicated over many years, could this “unorthodox” intervention, thanks to the Mastercard Foundation and NSSF Uganda, be the catalyst the innovation ecosystem needs to spur job growth?

Could such interventions form a foundation, upon which the country’s entrepreneurs, who mostly face the dilemma of expensive credit, can realise their dreams one step at a time?

We attempt to examine these questions in this issue of the Savings Digest by providing deeper insights into the NSSF Hi-Innovator programme, through interviews with experts, testimonials from entrepreneurs, and features. We also provide market updates, and other features from your favourite writers. We hope you will be informed and encouraged through these pieces.

Victor Karamagi Editor

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Editorial Team

Barbra Teddy Arimi

Victor Karamagi

Executive Editor

Editor

Paul Busharizi

Carol Beyanga

Tito Winyi

Consulting Editor

Contributing Editor

Design Editor

Christine Kasemiire

John Ssenkeezi

Julius Businge

Josephine Nakitende

Anna Maria Sanyu

Digital Editor

Copy Editor

William Lutaaya Contributor

Lead Writer

Contributor

Patience Druscilla Contributor

Contributor

Ian Namanya Graphics

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Big Story

NSSF Bet On Entrepreneurs Is Far From A Gamble Paul Busharizi

Financial Journalist

You would not expect to find a pension fund in the trenches of rural agribusiness or amongst the men and women who try and make ends meet in the digital gig economy.

But that is exactly where you will find the National Social Security Fund (NSSF).

Through its Hi-Innovator programme, NSSF has quietly upended the traditional role of a social security fund. Instead of waiting for savers to find jobs and remit contributions, it has decided to create the very jobs and businesses that will feed into the system.

Bold? Certainly.

Necessary? Without a doubt.

This is the reality: with over 70% of Ugandans working in the informal sector and youth unemployment a ticking time bomb, the old playbook was not going to cut it. We need-

One of the businesses participating in the Hi-Innovator programme displays its packaged products.

ed something new, something that would turn our youthful population from a burden into an engine of growth. That is where Hi-Innovator finds its place.

Where Agriculture Meets Ambition Let’s start with the soil. Agriculture has long been Uganda’s backbone—but for many, it has been a back-breaking job rather than a viable enterprise. Hi-Innovator seeks to change that.

From smallholder beekeepers in West Nile to coffee farmers in Mbale, agri-businesses supported by the programme have created more than 3,900 direct jobs. Many of them are for youth and women. Even more impressive, agribusinesses supported indirectly through the programme are estimated to have created over 148,000 jobs in the broader supply chain. That’s not charity. That’s transformation.

Over

70% Ugandans working in the informal sector

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Big Story

The Hi-Innovator seed funding has allowed businesses to buy equipment, improve packaging, get certified for export, and pay employees decent wages.

When Health Becomes a Business

Over 148,000 jobs created in the broader agriculture supply chain.

In the health sector, Hi-Innovator has begun to seed a new kind of care— entrepreneurial, decentralised, and digital.

One start-up delivers essential medicines to rural clinics using a network of boda bodas and a GPS-enabled stock-tracking app. Another offers

It is not perfect, but it’s a start. And a very good one.

These are not grand hospitals or billion-dollar health tech platforms.

They are lean locally owned businesses filling the cracks in our public system. And they are doing it with more empathy and efficiency than many state agencies.

But there is a caveat. Health is not just another sector—it is a public good. The line between access and exploitation can get blurry, especially when profits are in play. If Hi-Innovator wants to play in this space, and it should, it must do so with a clear eye on equity, not just efficiency.

The seed funding has allowed businesses to buy equipment, improve packaging, get certified for export, and pay employees decent wages.

Entrepreneurs who were once producing for the local market are now pursuing regional buyers.

Of course there are hiccups. Delayed payments from buyers, razor-thin margins, and the ever-present spectre of climate change still haunt these businesses. But what Hi-Innovator has done is de-risk the early stages— giving them the breathing room to professionalise.

expectant mothers mobile vouchers for prenatal care, reducing the risk of childbirth complications in remote districts.

The Factories of the Future Uganda’s light manufacturing sector is often overlooked, but Hi-Innovator is giving it a much-needed boost.

Women-led businesses have been a key focus area for the Hi-Innovator Programme.

One female-led soap business in Jinja used its seed-capital to upgrade from a 50-litre drum to a semi-automated mixer. Their monthly output? Up fivefold. Their staff? Up from four to 34, with half of them being young women.

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Big Story These are not industrial parks. They are small workshops tucked behind shopfronts, run by people who have figured out how to turn craft into capital.

That said, scaling is tough. Electricity is expensive. Machinery is hard to import, plus, the market is flooded with cheap imports from Asia.

Still, the support structure is working. Entrepreneurs are learning how to price better, source smarter, and produce at scale. An opportunity exists to strengthen the approach by fostering deeper linkages to government incentives such as Buy Uganda, Build Uganda (BUBU), and by exploring avenues for accessing longer-term capital to support equipment investment.

Similar initiatives are being implemented in other countries with aligned objectives. In Rwanda, the national pension fund has backed local garment factories and agro-processing plants under a dedicated impact fund. Uganda could borrow a leaf here.

The Digital Edge Then there’s the digital economy— the flashy side of entrepreneurship.

Hi-Innovator’s approach here is refreshingly grounded. Instead of funding yet another ride-hailing app, it is supporting digital bookkeeping tools for kiosks, inventory apps for agro-dealers, and vernacular games that teach budgeting to rural youth.

It is innovation with a rural accent.

And it’s working.

The risk, of course, is scale. These products need mass adoption to be sustainable, but many of the entrepreneurs don’t have the marketing budgets, or the patience needed to push through Uganda’s fragmented digital landscape.

The foundations however are solid.

With the right follow-on support (alumni networks, financing from traditional and non-traditional market players, partnerships with telcos), these micro-digital businesses could become serious players.

Agri-businesses supported by the Hi-Innovator programme have created more than 7,300 jobs.

ca, it is worth stepping back and seeing the broader pattern.

In Rwanda, the National Pension Fund has backed local garment factories and agroprocessing plants under a dedicated impact fund.

Malaysia’s pension fund, Kumpulan Wang Persaraan (KWAP), even set up a tech innovation hub to support exactly these kinds of ventures.

What Other Countries are Doing (and Why it Matters) Lest we think Hi-Innovator is some fluke experiment in the Pearl of Afri-

In Denmark, the ATP (Arbejdsmarkedets Tillægspension) fund—Europe’s fourth-largest pension scheme—has been actively investing in start-ups via Vækstfonden, a state-backed growth fund. Through blended finance and co-investment models, ATP supports early-stage ventures in green tech, health, and manufacturing. They are not afraid to make long bets if the innovation aligns with national priorities like sustainability and industrial competitiveness.

ATP’s logic? You secure pensions not just by investing in Wall Street, but by ensuring your national economy stays competitive and future-proof. It is the same logic behind Hi-Innovator.

In Canada, the Canada Pension Plan (CPP) created the Venture Capital Action Plan (VCAP), where public capital is used to unlock private VC funding for innovative Canadian start-ups. CPP does not invest in the start-ups directly but funds top-tier funds that do. This derisking strategy allows more capital to flow into tech and health innovation, creating jobs and anchoring global firms at home.

Uganda’s NSSF may be smaller—but the ambition of Hi-Innovator is cut from the same cloth; structure the Story continues on next page

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Big Story

An entrepreneur makes a business presentation to judges during the Hi-Innovator programme pitch day.

pipeline; crowd in private capital; and build enterprises that employ, formalise, and contribute.

Closer to home, in South Africa, the Government Employees Pension Fund (GEPF) channels a portion of pension assets into the Isibaya Fund, managed by the Public Investment Corporation (PIC). Isibaya supports black-owned SMEs, rural infrastructure, renewable energy, and social enterprises. It is about economic transformation, not just financial return.

With over R100 billion committed to impact investments, the GEPF is showing what is possible when a pension fund steps beyond the stock market.

1. One-size-fits-all funding Tailoring funding to specific sectors could go a long way in increasing its overall impact. Take for instance, a soap manufacturer needs more capital than a digital bookkeeping app.

2. Post-program drop-off

wife using an app to track expectant mothers in Rakai. Look also to a pension fund that had the audacity to bet on them. In the end, the best way to secure tomorrow’s pensions is to build today’s jobs.

That’s a gamble worth taking.

The programme should consider a structured alumni initiative. Think mentorship, investor matching, and trade show access, or even a Hi-Innovator alumni fund.

One female-led To further deepen the impact of the soap business programme amongst women, Hi-InNSSF’s Hi-Innovator may not have novator should consider reaching out the scale of Isibaya yet, but it has to women in regions like Karamoja in Jinja used something just as valuable—focus. and Busoga where female-led busiSector-specific. Youth-oriented. Lo- nesses are often stuck in the surviv- its seed-capital cally grounded. It is building from alist phase. to upgrade the bottom up. It is not waiting for unicorns, but cultivating everyday With the right execution, the Hi-Inentrepreneurs—from farmers in the novator has real potential to make from a 50-litre dairy value chain in western uganda, a meaningful impact on Uganda’s drum to a semito soap makers, and mobile health economy. providers—who will build Uganda’s automated mixer. middle class.

If you are looking for where Uganda’s next wave of growth will come from, Their monthly Areas for growth do not look to oil rigs or Chinese loans. output? Up While Hi-Innovator holds great promise, it’s important to acknowl- Look to the woman mixing soap in edge that there are still areas for im- Jinja; the youth building a chilli ex- fivefold. provement.

3. Gender gaps

port business in Gulu; and the mid-

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Personal Finance

An Idea First, Capital Later?

The Entrepreneur’s Dilemma Julius Businge

Financial Journalist

Uganda has one of the world’s highest rates of entrepreneurial activity—28% of adults are engaged in early-stage ventures

In Uganda, the phrase “I have a business idea” is as common as the sunrise. With one of the world’s highest rates of entrepreneurial activity—28% of adults engaged in early-stage ventures, according to the Global Entrepreneurship Monitor— the country is buzzing with ambition.

But if ideas are in abundance, why do so few start-ups survive? The Uganda Investment Authority says more than 60% of registered small and medium enterprises (SMEs) fail to celebrate their second birthday. This paradox raises a crucial question for aspiring entrepreneurs: between capital and the idea, which truly matters more when starting a successful venture?

Chicken and egg conundrum Joseph Mayeku, an Account Manager at Ensibuuko Tech Ltd, believes the idea comes first. “Before you even think of capital, you need an idea, a dream,” he says. Ensibuuko was started with a vision to help unbanked

communities manage savings and loans through technology.

That idea, however, needed refining and support. “Starting is not always easy; you will fall along the way, but you need to identify the weaknesses, perfect them and lift yourself up,” Mayeku explains. Ensibuuko has itself weathered its share of challenges since 2014, but through innovation and partnerships, it now supports over 1,000 savings groups to access credit and agricultural inputs.

Mayeku’s insight echoes a broader truth: while capital is crucial, a well-crafted idea backed by execution, mentorship, and resilience often determines a start-up’s fate.

Like Mayeku, Dr Julius Byaruhanga, the Director of Policy and Business Development at Private Sector Foundation Uganda (PSFU), asserts that a strong business idea forms the foundation of any successful enterprise — not capital.

“A sound business idea should be validated through empirical evidence. Carry out a thorough cost-benefit analysis. Once you are convinced of its viability, you can then confidently invest resources.”

Dr Julius Byaruhanga

Director of Policy and Business Development at Private Sector Foundation Uganda (PSFU)

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Personal Finance “There is a school of thought that considers capital secondary to the idea, and I agree,” Dr Byaruhanga explains. “You may have the money, but if you invest it in the wrong business, you are likely to incur losses.”

He stresses the importance of testing the idea before committing resources. Many entrepreneurs, he observes, start businesses based on casual conversations with peers, only to encounter unexpected losses.

Supporting businesses beyond funding One initiative redefining what it means to grow a business in Uganda is the NSSF Hi-Innovator Programme, a partnership between the National Social Security Fund (NSSF), Mastercard Foundation, and Outbox Uganda. Unlike traditional funding models that only inject money, Hi-Innovator focuses on nurturing both the entrepreneur and the enterprise.

60% of registered small and medium enterprises (SMEs) fail to celebrate their second birthday.

“The programme is not just about innovation,” says Patrick Ayota, Managing Director of NSSF. “It’s about formalizing Uganda’s economy and creating members for the Fund.” By mid-2025, Hi-Innovator had created over 202,000 jobs—far exceeding its initial three-year target of 132,000—and generated Shs1.7 billion in savings from newly formalised roles. “Each job created is a potential NSSF member,” Ayota adds. “The programme has been a gateway for

Ease of Doing Business

Uganda ranks 116th out of 190 countries World Bank report.

turning informal ideas into formal contributions.”

Beyond numbers, the programme touches human lives. Many youthled businesses, once operating informally, are now employers, tax contributors, and NSSF members. And it’s not just about access to seed funding—Hi-Innovator offers technical assistance, mentorship, a Business Academy, and long-term partnerships through its accelerator programmes, including those tailored for women.

Meralyn Mungereza, the Country Programme Head at the Mastercard Foundation, says their involvement is rooted in enabling young people to find dignified and fulfilling work.

“The success of the programme lies not only in the number of jobs created but also in the dignity and longterm security those jobs have begun to offer,” she notes. For many young entrepreneurs, this is the bridge from the informal hustle to a sustainable livelihood. Entrepreneurs for the programme, however, are selected carefully.

Meralyn Mungereza, the Country Programme Head at the Mastercard Foundation says their involvement is rooted in enabling young people to find dignified and fulfilling work.

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Over 300 businesses have benefited from the Hi-Innovator Programme. The strength of the Programme lies in its model—one that merges finance with capacity building.

28% Adults engaged in early-stage ventures Global Entrepreneurship Monitor

Richard Zulu, CEO Outbox Uganda

Richard Zulu, CEO of Outbox Uganda, which implements Hi-Innovator, says the selection of businesses is intentional. “We focus on ventures with potential for long-lasting employment, especially in sectors like light manufacturing, agri-business, and education,” Zulu says. Each selected start-up signs up for a five-year support framework that goes beyond funding. “We provide technical assistance, mentorship, and access to markets—ensuring these start-ups don’t just survive but scale,” he emphasizes.

Zulu believes the strength of Hi-Innovator lies in its model—one that merges finance with capacity building. It is a refreshing shift from traditional capital injection programmes that often leave young entrepreneurs overwhelmed and underprepared.

This holistic approach is why over 430 businesses have already benefited from the programme, while more than 81,000 have been trained through the Hi-Innovator Business Academy.

Still, some industry leaders believe entrepreneurs must also evolve how they approach growth. Keith Kalyegira, Board Chairperson of Absa Bank Uganda, puts it succinctly: “While a good idea is the spark, it’s your ability to build, sell, and get paid that truly brings a business to life.”

Speaking at the Absa Bank Business Club relaunch in Kampala on July 9, Kalyegira advised entrepreneurs to focus on formalisation, tax compliance, and visibility. “That’s how we walk with you and grow together,” he Story continues on next page

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said, referencing the banking sector’s increased willingness to work with credible SMEs. Anil Patel, CEO of Grant Thornton Uganda, agrees. “Behind every successful business is sound advice, strong governance, and strategic planning,” he said at the same event.

His remarks underscore the advisory gap facing many start-ups, especially those without access to professional guidance.

Entrepreneurship in Uganda In 2023 alone, Uganda attracted just USD $5 million (UGX 18.5 billion) in startup funding, according to entrepreneurship consultant Moses Acobi. In his LinkedIn piece titled “Optimising Investment Readiness for Ugandan Startups”, Acobi writes, “Our ecosystem lacks readiness. Most entrepreneurs need business model training, financial forecasting skills, and exposure to investor language.”

Our ecosystem lacks readiness.

Most entrepreneurs need business model training, financial forecasting skills, and exposure to investor language.”

Uganda ranks 116th out of 190 countries in the World Bank’s Ease of Doing Business index report produced in 2020.

Fortunately, Uganda’s growing network of incubators and accelerators is attempting to bridge these gaps.

Platforms like Innovation Village, Hive Colab, and Imuka Ventures offer co-working spaces, investor matchmaking, and essential business training. A 2021 WeeTracker report credited these organisations with reducing early-stage failure by offering structured and consistent support.

But, challenges in the policy environment persist. Uganda ranks 116th out of 190 countries in the World Bank’s Ease of Doing Business index

1.7 UGX

Billion NSSF Contributions from Hi-Innovator enterprises

last report produced in 2020. Complicated registration processes, inconsistent tax enforcement, and barriers to market access—particularly for international expansion—continue to hamper start-up growth.

So, back to the question, what matters more when starting up–capital or the idea? The answer, as the Ugandan experience shows, is neither in isolation. A compelling idea gets you to the table, but without access to capital, mentorship, training, and a nurturing environment, even the best concepts can wither.

Programmes like NSSF Hi-Innovator illustrate what happens when all these pieces come together: ideas are transformed into livelihoods, informal workers become formal contributors, and Uganda’s economy moves closer to unlocking its full potential. For Uganda’s next wave of entrepreneurs, that may be the most important idea of all.

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Big Story

What Uganda’s Budget may Mean for SMEs Paul Busharizi

Financial Journalist

Photo Credit: Uganda Business News

L-R(State Minister for Finance and Planning, Hon. Henry Musasizi, Finance Minister, Hon. Matia Kasaija, State Minister of Finance for Investment and Privatization, Hon. Evelyn Anite, the Minister of State for Investment and State Minister for Finance, Planning and Economic Development Amos Lugoloobi, pose for a photograph during the FY2025/26 budget reading ceremony.

Every morning before dawn, Musa fires up his charcoal stove at a soon-to-be busy corner of Kisaasi. By 7 a.m., he is serving rolex (eggs rolled in chapati) to his customers—boda boda riders, construction workers and office assistants. His monthly profits, after paying rent for his kiosk and feeding his young family in Kanyanya, barely stretch to the end of the month. Every so often, he is forced to bribe a KCCA enforcement officer to avoid eviction for “operating without a licence.”

72.4 UGX

Trillion

Uganda’s FY 2025/26 Budget

“They tell us to register and pay taxes, but how can I pay when I don’t even know if I will sell enough to cover food for the week?” Musa asks, wiping sweat off his brow as the morning rush picks up.

Musa is not alone. Like Julie, who sells second-hand clothes in downtown Kampala’s crowded arcades, or Kenny, who ferries passengers through the city chaos on his motorbike, Musa operates at the edges of formal economic planning, rarely noticed in national policy, and even less in national budgets.

There is some light at the end of the tunnel, however. The FY2025/26 budget, Uganda’s largest yet at UGX 72.4 trillion (about $19 billion), has promised to make room for entrepreneurs like them. For the first time, Story continues on next page

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Big Story the government has announced a three-year tax holiday for startups—a move aimed at encouraging formalisation, innovation, and small business growth.

A Budget Five Times the Economy of 1986 To appreciate the scale, Uganda’s budget this year is nearly five times the size of the entire economy in 1986, when the NRM government came to power. Back then, GDP stood at just $4 billion. Today, the ambition embedded in the national budget reflects decades of macroeconomic stability and infrastructure rebuilding, but also the sheer pressure to deliver opportunities to a restless and youthful population.

The budget allocates trillions to infrastructure, debt servicing, and community development initiatives like the Parish Development Model (PDM) and Emyooga. For entrepreneurs like Musa and Julie, these funds may seem distant. But woven into these grand plans are threads of real actionable opportunity.

Tax Holiday: Promise or Public Relations?

For the first time, the government has announced a three-year tax holiday for startups—a move aimed at encouraging formalisation, innovation, and small business growth.

Finance Minister, Matia Kasaija says the aim of the three-year income tax holiday for new startups is to spur innovation and encourage small businesses to transition from informal to formal status.

According to Finance Minister, Matia Kasaija, the aim of the three-year income tax holiday for new startups is to spur innovation and encourage small businesses to transition from informal to formal status.

Kenny, who has been riding his boda for six years, is cautiously optimistic. “The tax holiday sounds good,” he says. “But what if I don’t make enough to even pay myself? What’s the point of a tax holiday if you have got no profit to show?”

Indeed, observers warn that the policy, while well-intentioned, may offer little practical benefit to many micro-businesses. For most startups operating at subsistence levels, tax holidays will only matter once profitability is achieved—a milestone they may or may not reach in their first three years. Even they don’t know.

Julie, who has been running her stall in Owino for nearly a decade, puts it bluntly: “If they want us to register, give us stock money or make the stalls cheaper—not talk about income tax exemptions when we are not even eating a profit.”

Analysts agree that the tax holiday may be playing to the gallery unless paired with credit access, simplified registration, and local government engagement.

Financing the Hustle: PDM and Emyooga A more tangible source of relief for small businesses may lie in the continued rollout of PDM and Emyooga—programmes meant to provide low-cost capital to household enterprises through community-based SACCOs. Julie recalls attending a PDM awareness meeting in her parish. “They said we could get up to a million shillings,” she says, “but when we went to the SACCO, they said the money hadn’t come. Others said you had to know someone to be considered.”

This inconsistency in access remains a challenge. But in areas where SACCOs are functional and well-governed, some beneficiaries report increased earnings and improved resilience. Musa, for example, says his neighbour used a PDM loan to buy a second-hand freezer and now supplies juice to two schools.

“There is hope,” he says, “But they must make it easier for us to apply, not only for those who have connections.”

Observers believe digitising SACCOs and embedding financial literacy training can improve transparency and uptake, especially for traders, food vendors, and boda riders.

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Big Story The Uganda Revenue Authority’s expansion of EFRIS and public sector digitisation is opening space for startups in mobile accounting, digital compliance, and public service automation.

Julie, who recently tried using a mobile app to track her sales, says she still prefers paper. “The phone is good, but sometimes data finishes or the app crashes,” she says. “But if they train us more, maybe we can manage it.”

Startups offering low-bandwidth, USSD-based tools, or embedded services through WhatsApp, could play a role in easing traders into the formal economy. There is also growing demand in SACCOs, parish offices, and health centres for simple, affordable software to manage books, disbursements, and procurement.

Photo Credit: https://infrastructure.go.ug/ongoing-road-projects/

This year’s budget devotes UGX 4.5trillion to roads and UGX 2.3 trillion to energy, a continuation of Uganda’s long-term infrastructure investment.

Infrastructure and Market Access This year’s budget devotes UGX 4.5 trillion to roads and UGX 2.3 trillion to energy, a continuation of Uganda’s long-term infrastructure investment. While this may seem abstract to someone like Kenny, the impact is tangible.

“Whenever they fix the road, I carry more passengers,” Kenny says. “If they tarmac more roads in the area, my fuel lasts longer and I make more rounds.”

Better infrastructure, including market access roads, translates directly into lower costs, expanded reach, and new business. For Musa, improved power supply could mean shifting from charcoal to an electric stove, reducing both operational costs and health risks.

Startups in logistics, mobile cold chains, or even shared processing facilities stand to benefit from these investments—particularly if they operate in secondary towns where infrastructure upgrades are unfolding.

Digitalisation and GovTech: New Startup Frontiers

If the government’s Buy Uganda Build Uganda (BUBU) policy is enforced more rigorously, tech startups could also win contracts to digitise local councils, schools, or even boda rider cooperatives.

Procurement and the BUBU Opportunity

A more tangible source of relief for small businesses may lie in the continued rollout of PDM and Emyooga— programmes meant to provide low-cost capital to household enterprises through communitybased SACCOs.

Under BUBU policy, registered local firms, including startups, can compete for government contracts in goods and services. For small enterprises like Julie’s, this could mean supplying school uniforms or basic household items. For others, it might involve providing printing, ICT, or training services.

“The day I get a school contract to supply jumpers is the day I leave Owino,” Julie laughs. “But I don’t know how to start—how do you even get those tenders?”

4.5 UGX

Trillion Allocated to roads in FY 2025/26 Budget Story continues on next page

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Big Story

Photo Credit: https://observer.ug/viewpoint/paving-ugandas-road-to-agro-industrialization/

The budget’s continued emphasis on agro-industrialisation opens space for startups in value addition, processing, and rural supply chains.

The answer, according to analysts, lies in simplifying procurement processes, reducing delays in payments, and publishing tenders in accessible formats—perhaps via SMS or local noticeboards.

Agro-Industrialisation and Rural Innovation The budget’s continued emphasis on agro-industrialisation opens space for startups in value addition, processing, and rural supply chains. Musa sees potential here: “My wife grows greens, but we don’t earn much. If we had a place to pack and sell them in town, we could do better.”

Startups that offer aggregation, packaging, or affordable machinery for juicing, drying, or storage could thrive in this environment, especially if tied to regional industrial parks or extension service networks.

Climate, Green Solutions, and the Next Wave The budget’s growing focus on water for production, irrigation, and sustainable agriculture is also unlocking space for climate-smart startups— from solar-powered irrigation to carbon farming platforms.

Kenny, who once tried a battery-powered boda, believes the future is electric. “If I had a charging point at the

stage and didn’t have to buy fuel daily, life would be different,” he says.

Clean energy startups could find opportunity in building rural charging networks, battery swaps, or even community power banks.

Health, Education, and Youth Engagement The allocations to education (UGX 4.2 trillion) and health (UGX 2.8 trillion) open demand for edtech and health tech startups. Musa dreams of sending his daughter to a technical school. “If they bring short courses to the parish, I’ll register her immediately,” he says.

Digital learning platforms, micro-credentialing apps, and school management systems are already being piloted in some districts. With government partnerships, they could scale.

Constraints Remain Despite all these openings, real obstacles persist. Uganda’s debt servicing bill—UGX 19.8 trillion—eats up a quarter of the budget. Domestic arrears have ballooned to UGX 14 trillion, strangling private sector liquidity. Implementation bottlenecks persist across ministries and districts.

While the three-year startup tax hol-

UGX

2.8

Trillion

Health Sector budget in FY 2025/26

iday is a welcome signal, it may not be enough for businesses that do not turn a profit in their early years.

“We’re still struggling to stand,” Musa says. “What we need is not just tax breaks, but capital, customers, and protection from harassment.”

For Musa, Julie, and Kenny, the national budget has long been distant noise behind the daily grind. But this year’s plan—if delivered with focus— offers more than aspiration. The combination of targeted investment, grassroots financing, and early policy shifts like the tax holiday could plant seeds for real inclusion.

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Facts & Figures

Facts & figures KEY HIGHLIGHTS OF THE PERFORMANCE OF THE NSSF HI-INNOVATOR PROGRAMME (2020-2025)

SKILLING

INDIVIDUALS SKILLED

Over

81,000

ACCESS TO FINANCE

SEED FUNDED BUSINESSES

WOMEN-LED BUSINESSES FUNDED

438 298

The National Social Security Fund (NSSF) Uganda is a multi-trillion shillings Fund mandated by the Government through the NSSF Act (Cap 230) to provide social security services to all eligible employees in Uganda. It is a contributory scheme funded by contributions from employees and employers of 5% and 10%, respectively, of the employee’s gross monthly wage.

The Fund is a secure, innovative, and dynamic social security provider that guarantees safety, security, and a return on members’ savings of at least 2% above the 10-year inflation average.

Our Vision To be the Social Security Provider of choice.

Our Mission To be a relevant partner to our members through continuous innovation in the provision of social security.

Our Purpose To make lives better by passionately dedicating ourselves to making saving a way of life, to enable more and more people improve their wellbeing.

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Facts & Figures

EMPLOYMENT

TOTAL JOBS CREATED (DIRECT & INDIRECT JOBS)

WOMEN IN WORK (DIRECT & INDIRECT JOBS)

202,323 31,990

ENTERPRISE SUPPORT ORGANISATIONS TOTAL NUMBER OF ESOs

15

NSSF COMPLIANCE NSSF CONTRIBUTIONS FROM HI-INNOVATOR BUSINESSES

1,722,413,079

UGX

ABOUT THE HI-INNOVATOR PROGRAMME Launched in August 2020, the Hi-innovator Programme is a five-year initiative of the National Social Security Fund (NSSF), supported by the Mastercard Foundation and implemented by Outbox. It was established to support Ugandan entrepreneurs by providing catalytic seed funding, entrepreneurial training, and business development services to foster more competitive and high-impact businesses.

The Hi-Innovator programme specifically targets businesses that are typically overlooked by traditional investors and often face challenges accessing financing and technical support. By addressing these gaps, the programme seeks to expand productive employment and extend entrepreneurship opportunities for young people in Uganda in a sustainable and inclusive manner.

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News Feature

Transforming Uganda’s Boda-Boda Sector: A Digital Leap Towards Inclusive Social Security William Lutaaya

Research and Insights Specialist, Strategy and Performance

In Uganda’s cities and rural areas alike, the boda-boda— local motorcycle taxis—are far more than a means of transport. They are the economic lifeblood of the country. With over 1 million riders on the road and an estimated 7 million Ugandans depending on their services daily, the sector plays a critical role in transporting people, delivering goods, and enabling small-scale commerce. It is Uganda’s second-largest employer after agriculture.

Yet for all its size and significance, the boda-boda sector remains deeply informal. Most riders operate as freelancers—unregistered, uninsured, and without access to basic social protections. This leaves them exposed to daily hazards, income instability, and the looming insecurity of retirement without savings.

For the National Social Security Fund (NSSF), which is mandated to manage retirement and social benefits for all working Ugandans, this presents a fundamental challenge: how do you bring social security to a mobile, cash-based, and informal workforce?

The Social Security Gap Uganda’s broader social security landscape reflects similar challenges. Out of a labour force of over 20 million people, just 2.4 million are members of the Fund—an overall coverage of less than 12%. Of these, approximately 45,000 are voluntarily contributing outside formal employment structures. This limited uptake underscores the difficulty of reaching informal workers, including those in the boda-boda sector, which—despite being hard to regulate—presents a unique opportunity due to its high visibility, deep community integration, and growing digital engagement.

Through an Application Programming Interface (API) integration, bodaboda riders can now register for retirement savings, make contributions, and track their funds, all within the Union App. Story continues on next page

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News Feature A New Model for Social Security Delivery Seeing the potential, NSSF has partnered with the Union to pilot a bold integration of services including the Union App, which serves as the front-end platform for user registration, verification and engagement, and NSSF Go (SmartLife), which is the Fund’s digital savings product designed for informal workers.

Through an Application Programming Interface (API) integration, boda-boda riders can now register for retirement savings, make contributions, and track their funds, all within the Union App. This eliminates major barriers like paperwork, travel to physical offices, and limited financial literacy. It brings social protection to riders in real time on the devices and platforms they already use. This is not just digitisation. It is a reimagining of social security for the gig economy.

Scaling Toward 2035: The 50% Coverage Goal

From Informality to Inclusion: A Digital Turning Point

NSSF aims to increase national social security coverage to 50% of the workforce by 2035. This means 15 million members actively saving with the Fund in the next 10 years. The boda-boda sector alone services 70% of urban transport demand, making it a high-impact entry point.

As the sector continues to digitise, new service bundles are becoming feasible. Riders could soon access health insurance, accident coverage, microloans, and pension plans, all from a single platform and at the click of a button. A partnership with boda-boda associations could be the launchpad for a full ecosystem of inclusive digital finance and social security services.

Learning from across Africa Uganda’s initiative joins a growing continental movement. In Kenya, platforms like M-TIBA and M-KOPA integrate mobile savings and insurance into everyday transactions for informal workers. M-TIBA, a mobile health wallet, has reached over 5 million users and enabled over KSH 2.6 billion (USD 24 million) in healthcare payments annually. M-KOPA, a pay-as-you-go platform for solar, smartphones, and e-mobility, has served over 3 million Kenyans, providing USD 1.5 billion in credit and enabling 62% of its users to generate income from their financed products.

In Rwanda, the EjoHeza digital pension scheme under Rwanda Social Security Board (RSSB) has enrolled 3.2 million informal sector workers, including thousands of taxis and boda-boda riders. In 2023, it had mobilised over RWF 45 billion (USD 40 million) in voluntary savings.

A breakthrough however has come from within the sector itself. The United Boda Boda Riders Cooperative Union (UBBRCU or “the Union”) is a nationwide organization formed to professionalise and streamline boda-boda operations. With a growing base of over 100,000 registered riders across 30+ districts, the Union provides both organisational reach and operational structure.

Central to its efforts is the Union App—a ride-hailing and rider management platform that digitises operations. It logs rides, tracks financial behaviour, and collects valuable real-time data about rider activity and earnings. For NSSF, this technology offers a ready-made channel to reach riders where they already are—online and connected.

Photo Credit: https://observer.ug/business/boda-boda-riders-initiative-seeks-to-establish-own-bank/

Local Government minister Raphael Magyezi signs pledge board during the launch of the United Boda Boda Stage Development Model at Kampala Serena hotel.

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News Feature systems, NSSF is doing more than collecting contributions. It is redefining what social security looks like in a fast-changing, informal economy.

So why does this matter? Because the stakes are enormous.

Boda-boda riders need to be given a seamless digital experience that reduces friction to adoption of this change.

The common thread? Where digital engagement exists, social protection can follow. Uganda’s boda-boda initiative builds on these lessons, adapting them to its unique labour landscape to extend coverage and improve financial resilience among informal workers.

What will it take to succeed?

To scale and sustain this transformation, 3 general pillars must align: •

People: We must address mindset and behaviour innovatively. Boda-boda riders need to be given a reason to save for their future and encouraged to maintain a consistent behaviour towards this goal. Behavioural nudges and gamification that promotes a culture of long-term saving among riders should be encouraged.

•

Processes and technology: The process should be made easy and fun. Boda-boda riders need to be given a seamless digital experience that reduces friction to adoption of this change. Data interoperability across platforms can lead the way to creating new digital experiences that ensure smooth information flow between NSSF, SACCOs, Fintechs, telcos, and ecosystem partners, and fit within the lifestyle of these riders.

•

Governance We must safeguard the interests of the beneficiaries. A robust governance framework is essential to safeguard riders’ interests while enabling innovation. Regulators and policymakers must be actively engaged, not only to create an enabling environment for digital financial inclusion but also to enforce safeguards that protect boda-boda riders from exploitation, data misuse, and financial risk. Collaborative regulation that balances flexibility with accountability will ensure trust in the system, accelerate adoption, and reinforce the long-term credibility of social protection for informal workers.

Informality is not a barrier—it’s a beginning The boda-boda sector is not a problem to be solved; it is an opportunity to be seized. By embedding social protection within existing digital eco-

50% NSSF target of workforce coverage by 2035

Today, 85% of Uganda’s gig workers have no retirement savings, leaving millions vulnerable to poverty in old age. Yet, this is not just a social issue—it’s an economic one. Every boda ride generates value, and every rider represents untapped financial potential. If even half of Uganda’s 1.2 million boda-boda riders join Smart Life and contribute just UGX 1,000 weekly, NSSF could mobilise over UGX 550 billion in new savings from a section of the population previously untapped. In addition, this would also help close 8.3% of the national coverage gap that currently exists.

Beyond the numbers, this initiative proves a bigger point: informality is not a barrier, it’s the beginning of Uganda’s next financial revolution.

Riders are digitally connected, community-driven, and increasingly open to innovative financial services. What was once invisible and unreachable is now a visible, organised network, ready to be part of the nation’s growth story.

By acting now, NSSF is not only protecting the financial futures of boda-boda riders but also laying the groundwork for scalable, digital-first social protection across all informal sectors—from market vendors to artisans and gig workers. This is the blueprint for how Uganda, and Africa, can transform informal economies into engines of inclusive growth.

The message is clear; for riders, this is a path to dignity and security in retirement; for NSSF, it’s a game-changing strategy to achieve its coverage growth goals; for Uganda, it’s proof that innovation can turn informality from a challenge into a national advantage.

Every boda ride can now be a step toward financial dignity. And every rider becomes not just a transporter of passengers, but a stakeholder in Uganda’s prosperity. Informality isn’t the end of the story. It’s where Uganda’s story of inclusive social security truly begins.

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Big Interview

Growing businesses to grow the Fund

The Hi-Innovator is a programme that was built in 2020 to improve small businesses that could bring new contributions to the National Social Security Fund(NSSF).

Julius Businge speaks to Alex Rumanyika Kalimugogo, the head of Strategy at NSSF, about the programme’s history, success and potential.

Julius Businge

Financial Journalist

Entrepreneurs in the Hi-Innovator Programme pose for a photo after a successful pitch day.

What is your name and what do you do at NSSF? My name is Alex Rumanyika Kalimugogo. I lead the Strategy Department at NSSF. We are responsible for facilitating the strategy process – which simply means we help the key stakeholders like the Board, Executive Management and Staff to design integrated and aligned course of actions to create a different and more impactful future for the Fund from what it is today.

This role involves four major disciplines: •

•

Strategy development (What is our purpose? How do we create value? Where are we going? How will we get there? What will success look like?).

Performance Management (Are we on course? How do we correct course? Is everyone playing their part?).

•

Project Management (What major initiatives will drive our success? Are we managing them well?).

•

Innovation Management (What new opportunities can accelerate our journey? What threats could disrupt our journey? How are we adapting to address these opportunities and threats through a structured innovation process?)

Tell us briefly about the Hi-Innovator programme?

The Hi-Innovator programme was borne out of our innovation process to address the threat that Uganda’s economy is not creating enough jobs. NSSF’s business model is highly dependent on contributions from workers. If the economy is not creating enough jobs, then the long-term sustainability of NSSF as a business is under threat. So, Hi-Innovator sought to work with the entrepreneurship ecosystem of Uganda to

stimulate the growth and scale of high impact small-and-growing-businesses (SGBs) that could create new work opportunities and, hence, new contributions to the Fund.

SGBs, as you may appreciate, are considered high-risk because they generally lack stable revenue and cash flows, and mature systems of operations and governance. So, the Hi-Innovator seeks to address these deficiencies and incorporate a seed-funding element

Over

200,000 Jobs created in the past five years

Story continues on next page

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Big Interview

“

The five-year program has been a very rewarding journey for the Fund and the Mastercard Foundation. The Board of directors of both institutions are interested in implementing a second cycle.

Alex Rumanyika Head of Strategy and Performance, NSSF

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Big Interview

In 2020, NSSF partnered with the Mastercard Foundation, an international philanthropic organisation, to avail USD 10M to seed fund 450 SGBs over 5 years. The programme was borne out of our innovation process to address the threat that Uganda’s economy is not creating enough jobs.

To-date, over 81,000 entrepreneurs have gone through the online Hi-Innovator Business Academy to the SGBs that demonstrate the strongest potential for impact, scale, and sustainability. In 2020, we partnered with the Mastercard Foundation, an international philanthropic organisation, to avail USD 10M to seed fund 500 SGBs over 5 years.

As the first phase of the programme winds down this year, we have provided USD 20,000 as seed capital to each of the 437 SGBs. What have been the key milestones of the programme so far?

The programme has had some important milestones along the way. It is worth noting that the programme was launched in the depth of the Covid crisis in 2020. Training of entrepreneurs was one of the objectives of the programme and with limited movement at the time, we had to pivot to build the capabilities to achieve our training objectives. So, we developed an online Business Academy that would enable entrepreneurs to access our content from anywhere and anytime through self-

paced learning. To-date, over 81,000 entrepreneurs have gone through our online academy—which is a major milestone for the programme.

The key objective of the Hi-Innovator programme was to create and sustain jobs, which would translate into new members and contributions to the Fund. We therefore made it a requirement for businesses that qualify for funding, to register their employees for NSSF. To date, the 437 SGBs that we funded have secured almost 2,000 new members and net contributions of UGX 1.7B. This is proof that our theory of change is working.

In terms of the total impact of jobs being sustained by the programme— the figure is over 200,000, many of which are jobs linked to the different value chains of the businesses we have funded. Over 50% of these jobs are impacting young people and women, who tend to be the more vulnerable members of our society. This is important because it speaks to the Fund’s vision of making life better for more and more Ugandans.

How did you achieve those impressive results, given how complicated the entrepreneurship landscape is in Uganda?

The model is partner driven. We could not have implemented it without the support of some key partners.

Entrepreneurship support is not a core aspect of NSSF’s business model—we acknowledged this from day one. We deliberately looked for institutions that excel in this space to sup-

port us with the programme design and implementation. The enterprise support organizations (ESOs) as they are called – led by Outbox Limited – were the most critical pillar of the programme’s success. They helped us coordinate learning in the online academy by mobilising entrepreneurs in their respective communities.

They helped us conduct coaching and mentorship exercises as the entrepreneurs prepared to pitch for the seed funding. And they helped us in the due diligence, monitoring, and evaluation processes once entrepreneurs had qualified for the funding. We have worked with 15 ESOs across the country which effort has been majorly coordinated by Outbox.

Besides the ESO structure, internally at NSSF, we had a small, dedicated team to provide general oversight and management of key stakeholders at the Fund and at the Mastercard Foundation.

It is said that many businesses in Uganda do not live past their first birthday. Have you observed this in the programme?

The statistic that 70% of small businesses in Uganda do not live past their first birthday is quoted in different circles. Hi-Innovator has defied the odds with an attrition rate of just 3% so far. Although this is impressive, the businesses that went through our programme are lucky to have benefited from a “controlled business environment”. They benefited from business development support in ways that the average business would Story continues on next page

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Big Interview

“

The key objective of the Hi-Innovator programme was to create and sustain jobs, which would translate into new members and contributions to the Fund. We therefore made it a requirement for businesses that qualify for funding, to register their employees for NSSF. To date, the 438 SGBs that we funded have secured almost 2,000 new members and net contributions of UGX 1.7B. This is proof that our theory of change is working.

struggle to access. The learning, the seed-funding and the post-funding support are all elements that most businesses would consider a luxury.

Hi-Innovator is proof that entrepreneurship is indeed one of the key factors of economic production. However, without the right incentives and supporting infrastructure, this factor of production is seriously hampered.

Since we have proved that it can be fixed, the question we are asking ourselves now is, how can we implement such a programme at a large enough scale to impact the entire economy?

In your experience, how would you describe Uganda’s entrepreneurial landscape?

Uganda’s is a case of a glass half full or half empty, depending on who you ask. Uganda tends to punch above its weight on quite a few global issues— entrepreneurship is one of them.

Uganda has attracted over USD 150M in venture capital inflows since 2019. This is impressive. But weigh that against USD 800M that went to Kenya in 2023 alone and you see how the boys are separated from the men.

The other large players in Africa are of

course Nigeria, South Africa, Egypt, Mauritius and perhaps Ghana. To flourish in this space as a country, several things matter: depth of capital markets, taxation policy, investor protection and governance, human capital and social environment, and entrepreneurship activity level/opportunity. Uganda is certainly making good progress in all but will need much bolder policy moves to support promising start-ups if it is to catch up with the likes of Kenya. NSSF’s role must be commended in signalling this intention because in the region, it is the only Pension Fund that is strategically supporting the ecosystem to shape it as a long-term alternative investment asset class.

What are some of the challenges of working with Ugandan startups?

Uganda is a country of great potential but is still overcoming several structural challenges to fulfill this potential. Many of the challenges we see in the start-ups are structural and systemic. Take for instance the significant investment required to address the country’s infrastructure—energy, transport, internet penetration etc.

Hi-Innovator is proof that entrepreneurship is indeed one of the key factors of economic production.

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Big Interview

Entrepreneurs make a presentation to a panel of judges during the Hi-Innovator Pitch Day.

Although the government continues to commit significant resources to infrastructure, there is still a huge gap to meet demand. A lot of the produce we see today in the local markets in Kampala is coming from the western regions of Kenya because of the relatively lower cost of transport, potatoes and tomatoes particularly. These are challenges of a structural nature which increase the general cost of doing business. Add to that the interest rates on loans which are high due to perceived risk of lending to business, but also the trade-off associated with lending to Government, where the yields are high. These structural elements significantly elevate the cost of doing business in Uganda, disproportionately so for small businesses.

Then there are “soft” issues. Our society structure and cultural norms encourage informal business operations. This is useful because it helps maintain normalcy in a society with high rates of unemployment. However, as some of our entrepreneurs make in-roads into formalising their businesses, they struggle to let go of habits that make it difficult to access capital and business development support. They struggle to do simple things like keeping good records, giving their employees contracts, filing tax returns, registering their businesses etc.

The learning environment is probably the other issue I would prioritise

as a major challenge to address. With a very large youth population, Uganda’s capacity to prepare its youth to compete in the knowledge economy is under strain. It affects the entrepreneurship ecosystem in two major ways. Late exposure of our youth to digital literacy significantly impacts their perspectives of entrepreneurship in terms of the possibilities to solve problems and exploit resources in business. It is no surprise therefore that the default small business in Uganda is typically in some form of trade, most likely attempting to sell a finished imported good. The learning mindset should be one of helping the entrepreneur to create new value by exploiting the environment around him, which digital tools can significantly aid today. The other related challenge is the ability to secure skilled workers as the knowledge economy evolves rapidly. Skills like “machining”, coding, digital and other aspects of value-addition, as well as managerial skills like marketing, finance and people management are not sufficiently available to accelerate the shift we need to be competitive.

What support do entrepreneurs in Uganda need, to attain the success of start ups in Silicon Valley?

“

Uganda has attracted over USD 150M in venture capital inflows since 2019. This is impressive.

But weigh that against USD 800M that went to Kenya in 2023 alone and you see how the boys are separated from the men.

The Silicon Valley model demonstrates about 3 elements that are common in successful venture ecosystems globally and not just at Silicon Valley: Story continues on next page

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Big Interview

Focusing on a very narrow aspect of science and technology that complements our natural strengths—agriculture, green energy, and biotechnology for intervention that will suddenly make unemployment disappear.

a. Strong collaboration between learning institutions and enterprise development – the likes of Stanford, MIT and Harvard for example. We see a very deliberate link between Science and Technology and enterprise development. b. Secondly, there is a high concentration of “risk capital” in those ecosystems. This is a unique aspect of American culture that is not as evident in Europe for instance. Ecosystems that are deliberate in pooling capital to fund businesses that are likely to fail is a contrarian concept that flies against logic, and yet a critical aspect of the success equation. c. The third element is about Government’s deliberate efforts to build “magic zones” – that attract creative, smart people to challenge their wits, access resources and network with inspiring people to build purposeful businesses that solve serious problems that potentially have global impact.

Uganda’s national development plan is deliberate about supporting enterprise growth and this is commendable. However, perhaps we are spread too thin. We could start by focusing on a very narrow aspect of science and technology that complements our natural strengths—agriculture green energy, and biotechnology for

“

Every year, 700,000 young people join the labour market, but only 90,000 are accessing decent work.

If there is anything we can learn from the Hi-Innovator programme, it is that a good policy if well-executed delivers results of high impact.

example—and invest resources to develop a modern enterprise support ecosystem around these pillars. Let’s take our efforts and investment in Kiira motors. Highly commendable.

However, Kiira motors should be further established as a major ecosystem for engineering to develop Uganda’s global competitiveness around solar solutions, electric mobility, solar irrigation pumps etc. We import thousands of motorcycles into Uganda every year. A policy to progressively replace these with electric bikes manufactured in Uganda is one way Government can intervene. Kiira motors should already be designing our electric metro service. These kinds of bold policy moves are needed to move Uganda from zero to one at a macro level.

You mentioned earlier, that Hi-Innovator created a total of over 200,000 jobs in 5 years. Given the levels of unemployment in Uganda what would you say is the programme’s secret that could be replicated across other government programmes to solve the job crisis in the country?

Uganda’s strategy to grow the economy tenfold by 2040 signals its intentionality about addressing unemployment via the ATMS strategy – Agro-industrialization, Tourism, Mineral exploitation for industry growth and science-technology-and-innovation.

There is not going to be a panacea Story continues on next page

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Big Interview

“ Mastercard Foundation Uganda officials at a recent media engagement in Kampala.

intervention that will suddenly make unemployment disappear. Hi-Innovator barely touched the tip of a very huge unemployment iceberg. Every year, 700,000 young people join the labour market, but only 90,000 are accessing decent work. If there is anything we can learn from the Hi-Innovator programme, it is that a good policy if well-executed delivers results of high impact. What we need is to identify a few policies of “high leverage” within the “ATMS” and be very ruthless and laser-focused in execution. Ethiopia recently set a goal of having 500,000 electric vehicles (EVs) on the road by 2030. Aligned to this goal, it passed a few high leverage policies like banning gasoline cars for personal use, duty free import of EVs, support of assembly and sale of local EVs, and investing in EV infrastructure like charging stations. There is short-term pain that a country must face when implementing such a policy, and often we face resistance in facing this pain. With Hi-innovator we did face similar challenges. Investing in small-and-growing-businesses does not offer short term returns to the Fund. It is a long game. Some stakeholders did not immediately buy into this concept. But if you execute well, two out of 10 start-ups could become the next MTN, and boom, you recoup your investment and have 1,000,000 new members. Okay not that dramatically – but you get the point. Focus on a few good strategies that have 3 times potential in terms of impact.

Do you believe empowering young entrepreneurs could be the solution to Uganda’s job crisis?

There is no singular solution to this job crisis as you call it. This must be part of an integrated approach, as the ATMS is indeed structured.

We would fit in the last bit. The “S” – Science, technology and innovation—where innovation is really the process and result of taking a great idea to market (where customers can pay for it at scale).

Over and above the Hi-Innovator programme, what opportunities exist for start ups in Uganda?

One good thing that the Government has done is answer this question in its various policy stances. No tax on export of goods for instance. No tax on

In 2020, we established a partnership with the Mastercard Foundation, an international philanthropic organisation, to avail USD 10M to seed fund 500 SGBs over 5 years.

goods brought in to add value in areas focusing on import substitution.

Then there is the policy around economic integration, at a regional level in East Africa, COMESA and continentally with the Africa Continental Free Trade Area. Then there is the strategy of ATMS. If you want to go further, then look at the sustainable development goals (SDGs). So, the Government has done its fair share in “signalling” where the opportunities are. Uganda has significant problems to address which purposeful and focused entrepreneurs can commit their time to. Perishability of food is one quick one that comes to mind.

The opportunities are infinite.

What advice would you give startups in Uganda?

Over

50% The percentage of jobs created by the Hi-Innovator programme, impacting youth and women.

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Big Interview Someone said, “Do not take advice from anyone who does not stand to lose anything if the advice is taken”. I am not the best person to advise entrepreneurs about their businesses. Entrepreneurs are special people. They take risks to create value. What we can offer as Hi-Innovator, however, is to ensure our programmes and interventions are transparent, fair, and remain accessible to a large enough population of vulnerable entrepreneurs that would ordinarily struggle to access support and funding from the more traditional institutions. So, if you meet the programme requirements, I encourage you to take that step and join. Particularly women.

$10m Seed funding provided by the Hi-Innovator programme over 5 years

Should entrepreneurs who missed this opportunity expect a second phase of the Hi-Innovator programme?

Any parting shots?

The five-year program has been a very rewarding journey for the Fund and the Mastercard Foundation. The Board of directors of both institutions are interested in implementing a second cycle where they have challenged us significantly to increase its scalability and long-term sustainability and impact. So, as of now, we are in the kitchen cooking Hi-innovator 2.0. We are hopeful that something even more exciting will emerge from this effort. So, yes.

One of my favourite authors is Nassim Nicholas Taleb. In his book Skin in the Game he says “Entrepreneurs are heroes in our society. They fail for the rest of us.” Everywhere we look, someone is making ends meet because of an entrepreneur. We all know a relative and friend who, without an entrepreneur, would be struggling in life. Our own President often discusses how the private sector collapsed after the forced exodus of the Asian entrepreneurship community

Female entrepreneurs pose for a photo after securing $20,000 seed funding following a successful Hi-Innovator programme pitch day.

in the 70s. Entrepreneurs are indeed heroes and tend not to be parochial in their perspectives. They set up enterprises to create value not to pursue identity interests. Therefore, if there is one community that we should support wholeheartedly as a pillar of our society’s advancement—it is that of the entrepreneurs!

“

Uganda’s national development plan is deliberate about supporting enterprise growth and this is commendable.

However, perhaps we are spread too thin. We could start by focusing on a very narrow aspect of science and technology that complements our natural strengths— agriculture green energy, and biotechnology for example—and invest resources to develop a modern enterprise support ecosystem around these pillars

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News

NSSF HI-Innovator Programme creates over 200,000 jobs supporting over 400 Businesses Christine Kasemiire Public Relations Officer

Collaboration has been central to the programme’s success, particularly through partnerships with 13 Entrepreneur Support Organisations (ESOs) such as Mkazipreneur, Makerere University Bussiness Incubator among others.

The National Social Security Fund (NSSF) Hi-Innovator Programme has recorded gains in job creation, enterprise development, and entrepreneurial skills, by creating over 200,000 jobs, after seed-funding 438 Small and Growing Businesses (SGBs).

This is according to an independent impact evaluation report by Ipsos Uganda Limited that assessed the project’s intervention areas for five years.

The Hi-Innovator is a flagship initiative by the NSSF, designed to create an enabling environment for Uganda’s indigenous SGBs to grow into scalable, investment-ready enterprises. It is done in partnership with the Mastercard Foundation and implemented by Outbox.

According to the evaluation report, some of the highlights are that the programme has trained 81,078 entrepreneurs (exceeding the 75,000 target), seed-funded 438 Small and Growing Businesses (SGBs), and supported the creation of 202,323 jobs—significantly surpassing the original target of 132,000 since its inception in 2020.

Of these jobs, 63,469 have been secured by youth, with 22,200 classified as dignified employment.

Over

85% The percentage of funded businesses that remain operational 6 months after receiving support.

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News In line with its commitment to gender equity, the report states that 68% of funded businesses are women-led, while 48% of all trainees (38,729) have been women. Additionally, 63,589 of all trained entrepreneurs (78%) have been youth, and 30,294 (37%) young women. Over UGX28 billion in seed funding has been disbursed to date, reinforcing the programme’s role as a key engine for inclusive economic development.

Patrick Ayota, the Managing Director of the National Social Security Fund (NSSF) noted that “The partnership between NSSF Uganda and the Mastercard Foundation has had a significant impact, creating dignified employment opportunities for young people while supporting the growth of the Fund through sustainable business development.

“As a requirement for receiving funding, eligible businesses were mandated to register their employees with NSSF. To date, the 438 supported SGBs have collectively registered nearly 2,000 new members and contributed a total of UGX 1.7 billion to the Fund,” he said.

Emphasising Mastercard Foundation’s commitment to empowering the youth, Meralyn Mungereza, the Country Programme Head at the Foundation said, “Our core mission in this programme has been to ensure that young people are equipped with the skills, tools, and opportunities they need to access dignified and fulfilling work. Through strategic partnerships and targeted support, we are unlocking the potential of Africa’s youth and enabling them to thrive in an inclusive, resilient economy.”

The programme’s impact goes well beyond job numbers. Over 85% of the funded businesses remain operational six months after receiving support, with 77% reporting improvements in critical performance areas including revenue growth, customer retention, and product quality—reflecting stronger business resilience and improved financial literacy.

Agriculture remains the leading sector in job creation, followed by manufacturing, digital services, and health. Investor confidence is also on the rise, with 53% of supported businesses attracting follow-on investment—more than double the initial projections. This highlights the programme’s success in nurturing scal-

able, investment-ready ventures.

One of the cornerstones of the programme is digital skilling. As a testament to that, the online learning platform earned a Net Promoter Score (NPS) of 8/10, with 78% of participants saying they are applying the knowledge gained directly in their businesses or careers.

Collaboration has also been central to the programme’s success, particularly through partnerships with over 13 Entrepreneur Support Organisations (ESOs) such as Mkazipreneur, Makerere University Bussiness Incubator among others, providing technical assistance, mentorship, and compliance guidance for participating businesses.

According to Richard Zulu the Team Principal at Outbox and the leader

of the ESOs, Hi-Innovator has redefined what it means to build and back Ugandan-grown, youth-led enterprises using local capital supported by local organisations.

“The impact extended well beyond businesses—it provided opportunities for young people to grow in an ecosystem where few such opportunities exist, while catalyzing long-term shifts in how we support entrepreneurship sustainably,” he said.

As the programme transitions into its next phase, the Hi-Innovator plans to deepen its focus on youth and women-led enterprises, strengthen post-investment support, enhance business compliance, and scale the capacity of entrepreneur support organisations.

Richard Zulu the Team Principal at Outbox makes a presentation during the NSSF Hi-Innovator pitch day in Kampala recently.

One of the cornerstones of the programme is digital skilling. As a testament to that, the online learning platform earned a Net Promoter Score (NPS) of 8/10, with 78% of participants saying they are applying the knowledge gained directly in their businesses or careers.

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NSSF Hi-Innovator Impact

Impact Beyond Survival: How Hi-Innovator Transformed Kirangwa Investments Ltd Patience Druscilla

Communications Support, Outbox Uganda

Agriculture continues to lead in job creation among sectors supported by the Hi-Innovator Programme.

85

metric tonnes Capacity of coffee produced by Kirangwa Investments Ltd at the end of 2024

In 2016, a quiet but significant shift in Uganda’s forestry sector altered the trajectory of Prossy Tumushabe’s career and the lives of hundreds of rural women in Mubende District. New forestry certification requirements forced plantation owners to provide separate accommodation and childcare facilities for male and female workers. The cost proved too high for many, leading to the mass layoff of women labourers.

“It was painful to watch women, many of whom were casual labourers and breadwinners, lose their livelihoods,” recalls Tumushabe. But from that displacement, a new vision was born.

In 2018, Tumushabe founded Kirangwa Investments Ltd, later rebranded as Namingoola Cooperative

Society, to start a new economic path for those affected. The cooperative resorted to coffee, a crop deeply rooted in Uganda’s agricultural industry, as a means of restoring income, dignity, and opportunity to women under the age of 35.

What began as a modest venture has since blossomed into a vibrant cooperative of 728 members across 19 farmer groups, producing over 80 metric tonnes of high-quality Robusta and Arabica coffee annually.

A new beginning in coffee Initially operating on borrowed land and using rented machinery, Kirangwa Investments Ltd’s beginnings were humble. But determination and a community spirit propelled it forward. By 2021, the cooperative had acquired three acres of land and conStory continues on next page

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NSSF Hi-Innovator Impact

“

The foundational course revealed the importance of planning, record keeping, and operational clarity. Today, the business operates with clear annual targets, broken into quarterly and monthly goals. We track performance meticulously and uphold strong financial discipline.

Prossy Tumushabe

Founder, Kirangwa Investments Ltd

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NSSF Hi-Innovator Impact

Over 728 women are now part of the Namingoola cooperative, up from just 45 in 2018.

structed a coffee factory. The dream was growing, but it needed structure.

That structure came in 2022, when Tumushabe joined the NSSF Hi-Innovator programme—a joint initiative by NSSF and the Mastercard Foundation, implemented by Outbox. The programme offers a business foundational course which equips small and growing businesses with the practical knowledge and tools necessary to scale sustainably and create community impact.

The programme graduates entrepreneurs from the foundational course to the bootcamp that prepares businesses for funding, and then the pitching stage, where entrepreneurs present their ideas to potential investors. Kirangwa was one of over 400 businesses that received funding from the NSSF Hi-Innovator Programme following a successful pitching exercise.

Systems before scaling “We didn’t believe in systems—until Hi-Innovator,” Tumushabe admits candidly. The foundational course revealed the importance of planning, record keeping, and operational clarity. Today, the business operates with clear annual targets, broken into quarterly and monthly goals. We track performance meticulously and uphold strong financial discipline.

“I used to think, ‘I am not stealing from myself, why keep records?’ But now I see that accountability protects you—from loss, theft, and from stagnation,” she shares.

Hi-Innovator’s guidance also emphasized formal compliance, including registration with Uganda Revenue Authority (URA) and the National Social Security Fund (NSSF). These steps, Tumushabe says, have boosted staff morale and enhanced credibility with potential partners.

“In our community, very few employers register workers for NSSF. Doing so made us stand out and opened doors for future growth,” Tumushabe reveals.

A surge in capacity and confidence With the financial support from Hi-Innovator, Kirangwa Investments Ltd acquired a coffee hulling machine and upgraded to a three-phase electricity connection. These assets unlocked exponential growth, from just 10–20 metric tonnes processed annually to 85 metric tonnes processed by the end of 2024, with a projection to double that figure in 2025.

For the first time, women were directly involved in marketing their coffee, cutting out middlemen and fetching premium prices. Instead of selling low-grade “kase” at UGX 7,000 per kilogramme, they now process and market value-added coffee at UGX 14,000-15,000 per kilogramme.

Coffee husks, once discarded, are now reused as mulch, helping women reduce input costs. The factory also offers paid processing services to the community at UGX 150 per kilogramme, creating a new revenue stream.

A catalyst for change The ripple effects of this transformation are felt far beyond the factory gates. Over 728 women are now part of the cooperative, up from just 45 in 2018. Many can now afford better schools for their children and invest in higher education.

The cooperative has created six fulltime jobs, including key managerial roles, all with NSSF and PAYE compliance, and supports another 50 indirect jobs in transport and extension services. Farmers now seek out expert advice and invest in quality agricultural inputs, signifying a cultural shift in farming attitudes.

With their own hulling equipment, the cooperative can enforce high-quality standards. Farmers receive hands-on training at a model demonstration farm, where they learn best practices for drying and harvesting coffee. This has led to better prices and consistent quality.

Looking ahead, Tumushabe has bold ambitions. She envisions entering the international export market, expanding to having 10,000 women farmers be part of the cooperative, and building a 200-metric-tonne storage facility. Plans are underway to introduce grading, colour sorting, and destoning equipment, and implement a traceability system to meet European Union export standards.

A Message to Fellow Entrepreneurs To those going through the Hi-Innovator journey, Tumushabe offers this advice: “Implement at least 80% of what you were taught. It’s not just about funding—it’s about systems, structure, and sustainability.”

“

Over 728 women are now part of the cooperative, up from just 45 in 2018.

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NSSF Hi-Innovator Impact She also underscores the power of formalisation and compliance.

“

When you’re ready to grow, to seek donors or investors, the first thing they check is whether you meet your statutory obligations. Being registered and compliant gives you credibility.”

Appreciating the funders and implementers of the Hi-Innovator programme, Tumushabe says: “The programme changed everything for us.

It’s not just funding—it’s knowledge, mentorship, and the tools to scale.

Today, we’re not just surviving. We’re building a legacy.”

Oak Knit’s Journey Stitching Solutions in Uganda’s Apparel Industry Julius Businge

Financial Journalist

Please tell us a little bit about yourself—who you are and what you do.

My name is Sarah Seruwagi. I am the Director and Founder of Oak Knit Manufacturers Uganda Ltd with a passion for sustainable fashion and inclusive local manufacturing. We are located at Masooli, near Kumbuzi, off Gayaza Road a few kilometres out of Kampala city. I started Oak Knit Manufacturers Uganda Ltd in 2011 after identifying a critical gap in Uganda’s textile sector. There was a massive opportunity to create quality, locally made apparel while addressing youth unemployment.

When and how did you discover the Hi-Innovator programme?

I first heard about Hi-Innovator in 2023 through social media. I joined the programme via the MkaziPreneur Hub, which supports women-led businesses like mine. It was transformative.

I learned a lot—especially Sarah Seruwagi, Director and Founder of Oak Knit about refining our business Manufacturers Uganda Ltd. model, improving financial management, and understanding our customers better. The mentorship and peer learning were incredibly helpful.

How exactly did the programme support your business?

We received $20,000 [about UGX73 million] seed capital from NSSF Hi-Innovator to set up a vocational training institute that provides critical skills like bakery, cookery, machine knitting, computerised embroidery and hair dressing. We bought more sewing and embroidery machines, which significantly improved our capacity and delivery timelines. We also invested in high-quality materials and upgraded our production workflow, which increased efficiency and reduced waste. Our branding and market visibility improved greatly as well.

What has changed at Oak Knit since joining Hi-Innovator?

We’ve seen a clear rise in revenue, streamlined operations, and built a more structured team. We now employ between 1 and 10 casual workers, depending on the volume of orders. Most importantly, we’ve expanded our ability to train and employ youth and women, especially from underserved areas.

Has this growth extended to your community?

Absolutely. We’ve created a ripple effect by offering hands-on tailoring and knitting skills to young people and women. This economic empowerment has transformed lives in the communities we serve. We also have a mobile team that goes to schools and trains and gives skills on appointment and at a fee.

What message would you share with entrepreneurs considering the Hi-Innovator programme?

Go for it! It’s a game-changer. If you’re ready to work hard and learn, Hi-Innovator will give you the tools, confidence, and networks to grow a resilient, impactful business.

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News

NSSF Earns UGX 50.3billion in Dividends from Airtel Uganda Christine Kasemiire Public Relations Officer

building a stronger economy, empowering workers, supporting families, and contributing to Uganda’s growth.

Som Soumendra, Managing Director of Airtel Uganda(L), hands over a dividend cheque to Patrick Ayota, Managing Director of NSSF,(R) as the two exchange a handshake.

The National Social Security Fund (NSSF) in June received a dividend cheque of UGX50.3 billion for its investment in Airtel Uganda, made during the telecom company’s Initial Public Offering (IPO).

In 2023, the NSSF invested UGX 199 billion to acquire slightly over 4.21 billion shares in Airtel Uganda at an effective price of UGX47.17 per share during the IPO. This investment represents a 10.5% stake in the telecom, making NSSF, Airtel Uganda’s second-largest shareholder.

Speaking at the dividend cheque handover event held in Kampala on June 20th, the NSSF Managing Director, Patrick Ayota, noted that Air-

“This is a proud moment for Airtel Uganda as we fulfil our promise to our shareholders. NSSF’s participation in the Airtel Uganda IPO demonstrates strong confidence in the resilience and potential of Uganda’s financial sector. At Airtel, we are proud to help drive this growth by expanding access to digital and financial services nationwide. As NSSF pursues its Vision 2035, growing assets to UGX 50 trillion, doubling coverage, and achieving 95% customer satisfaction, we stand ready to support this journey,” he said.

tel Uganda has consistently delivered growth since its listing.

“For the year ended December 2024, the Fund earned UGX33.2 billion from its investment in Airtel Uganda, reaffirming it as one of our most profitable equity holdings. This brings the total gross dividend earned from Airtel Uganda in less than two years to UGX50.3 billion,” he said, adding that the telecom represents a strong long-term growth opportunity for the Fund.

NSSF Asset Allocation NSSF invests across three asset classes: the fixed income portfolio which accounts for 79.5% of total assets; equity, invested in telecoms among others which accounts for 14.1%; and real estate which accounts for 6.4%.

Airtel Uganda Managing Director, Som Soumendra, said the dividend payment reflects the commitment of both Airtel Uganda and NSSF to

50.3 UGX

Billion

Dividends from Airtel Uganda in less than 2 years.

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Market Insights

Economic Developments and Outlook - Uganda Josephine Nakitende Fixed Income Specialist

On the expenditure side, the decline was compounded by reduced final consumption, reflecting lower household and government spending, and a widening trade deficit, as import growth outpaced that of exports.

While gross fixed capital formation improved to 4.4% from 1.5%, it was not sufficient to offset the weaknesses in other key sectors of the economy.

Photo Credit: kikubolane.com

According to the Uganda Bureau of Statistics (UBOS), year-on-year real GDP growth stood at 5.3% in the second quarter of FY2024/25, down from 6.7% in the first quarter, resulting in an average of 6.0% for the first half of the fiscal year. This slowdown was mainly driven by a

sharp deceleration in the services sector, which grew by only 2.0% in Q2, compared to 5.6% in Q1. The weaker performance in services outweighed a strong industrial rebound (8.4%, up from 5.9%) and still robust but slightly slower agricultural growth (7.2%, down from 8.7%).

The Bank of Uganda (BoU) projected GDP growth of 6.0%–6.5% for FY2024/25 and 7.0%–7.5% over the medium term, supported by strategic government initiatives, rising foreign direct investment (FDI) in extractive industries, and the anticipated commencement of oil production in FY2025/26. However, key risks to this outlook include adverse weather conditions, tight global financing, and continued geopolitical uncertainty.

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Market Insights Inflation rose slightly during the quarter but remained below the central bank’s 5% target. Annual headline inflation increased to 3.9% in June 2025, up from 3.8% in May and 3.5% in April, largely driven by higher food crop inflation, which rose to 4.7% from 4.3%. However, core inflation remained steady at 4.2%, supported by stable services inflation at 4.7% in both May and June. According to the Bank of Uganda, the inflation outlook has been slightly revised downward due to lower global oil prices and a stable exchange rate. Core inflation is now projected to average 4.5–5.0% in FY2025/26, gradually aligning with the 5% medium-term target.

The Bank of Uganda (BoU) Monetary Policy Committee (MPC) maintained the Central Bank Rate (CBR) at 9.75% in May 2025, marking the third consecutive hold at this level since October 2024. The Committee said that the decision reflects a balanced approach aimed at anchoring inflation expectations while supporting economic activity amid heightened external uncertainties.

The Uganda Shilling remained stable in June 2025, appreciating by 4.0%

Photo Credit: blogs.worldbank.org

Inflation rose slightly during the quarter but remained below the central bank’s 5% target.

year-on-year, 1.8% quarter-on-quarter, and 1.03% month-on-month to an average mid-rate of UGX 3,605.88/USD. This strength is attributed to prudent monetary policy, financial market reforms, and sustained inflows from remittances, NGOs, offshore investors, and coffee exports. The shilling also benefited from the weaker US dollar globally.

However, ongoing global trade tensions may pose risks, potentially increasing exchange rate volatility if uncertainty persists.

Central Bank Rate (CBR)

9.75%

The interest rate at which Bank of Uganda lends money to commercial banks.

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Market Insights

Figure 16: Movement in the Uganda Shilling exchange rate and US Fed Index (month on month, percent).

Source: Bank of Uganda

Average bond auction yields

16.88% Average bond auction yields increased from 16.0% in June 2024 to 16.88% by the end of the fiscal year.

Source: Bank of Uganda

The yield curve steepened during the fiscal year, with long-term rates rising by 100–135 basis points (bps) compared to 20–50 bps for short-term rates. Treasury auctions were oversubscribed, with an average bid-tooffer ratio of 1.98 for treasury bills and 1.62 for bonds. Average bond auction yields increased from 16.0% in June 2024 to 16.88% by the end of the fiscal year, with 10-year and 20-year bonds yielding 17.5% and 17.945%, respectively, in the May 2025 auction. These developments

enhanced the relative attractiveness of Ugandan bonds compared to regional peers. The secondary market trade volume rose significantly from UGX 16.81 trillion to UGX 24.31 trillion.

Looking ahead, increased investor appetite for safe-haven assets may drive demand and push rates downward. However, elevated government financing needs ahead of the elections could offset this pressure and keep yields slightly elevated.

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Regional News

SA Government Plans to use Pension Fund Money for Industrial Policy Projects

Photo Credit: dailyinvestor.com

South Africa’s President Cyril Ramaphosa

Finance Minister Enoch Godongwana reaffirmed the South African government’s plan to fund industrial policy projects using long-term domestic savings, such as pension funds.

Work is underway to issue the first infrastructure bond by 2026.

This was revealed during the Finance Minister’s third and final presentation of the National Budget on 21 May, 2025.

During his address, Godongwana underscored infrastructure as a critical pillar of South Africa’s growth strategy.

“Quality infrastructure investment expands the productive capacity of the economy and responds to the diverse needs of the citizens,” he said.

“Infrastructure is also a rich source of jobs, in construction, engineering, and related industries across a range of skill levels.”

Godongwana emphasised that the government is committed to shifting spending from consumption to investment, with capital payments being the fastest-growing category of expenditure.

“Public infrastructure spending will exceed R1 trillion over the next three years, with key allocations directed toward transport and logistics, energy, and water and sanitation,” he said.

R402 billion has been budgeted for transport and logistics, including among others, funds for the South African National Roads Agency (SANRAL) to maintain and refurbish roads, and for the Passenger Rail Agency of South Africa (PRASA) to renew its rolling stock fleet and for the signalling system.

Over

R1 Trillion Expected expenditure on Public infrastructure over the next three years.

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Regional News of prescriptions rose for two decades and peaked in 1977. After that, it tapered off before being scrapped in 1989.

This may explain why some in the pension industry have expressed strong concerns over their reintroduction, as they fear that the funds may be threatened.

Key figures, such as Dawie de Villiers, CEO of Alexander Forbes, and Dawie Roodt, chief economist at Efficient Group, have argued against this move.

Their argument is that it removes autonomy from pension fund trustees and contributes to the generally poor performance of these enterprises.

Photo Credit: www.news24.com

South Africa’s Finance Minister, Enoch Godongwana.

These efforts aim to expand affordable commuter rail services, particularly for low-income earners who spend over half their income on transport.

scribed assets force retirement funds to allocate a percentage of their holdings to specific government-approved instruments).

In the energy sector, funds will be invested in strengthening the electricity network across generation, transmission, and distribution, as well as on water and sanitation, expanding dams and bulk infrastructure supporting farms, factories, and mines.

The party adopted the policy in its 2017 elective conference and then made it a key policy in its election manifesto for the 2019 elections.

Considering these plans, the finance minister confirmed that the country remains on track to issue its first infrastructure bond in 2025 or 2026.

“We are also exploring alternative financing instruments to allow pension funds, commercial banks, development banks and international financial institutions to participate in financing our infrastructure plans,” he said.

He added that reforms such as reconfiguring the Budget Facility for Infrastructure (BFI), which reviews proposals quarterly instead of annually, will further unlock investment.

Prescribed assets The plan has been in the pipeline for a long time. Over the years, the ANC government adopted and subsequently retracted various policies related to pension funds, with the most notable being its initial desire to adopt prescribed assets to fund government infrastructure projects (pre-

In 2022, Godongwana stated that there are other opportunities for pension funds to co-invest with the government, particularly in delivering infrastructure throughout the country.

He said that prescribed assets were something “to be investigated” but could not be instated without substantial consultation and a robust review process by the government.

Talk of prescribed assets had disappeared from the pension fund discourse. However, it resurfaced when it was included in the ANC’s 2024 election manifesto.

It stated the party would “engage and direct financial institutions to invest a portion of their funds in industrialisation, infrastructure development and the economy through prescribed assets”.

The practice of prescribed assets has a long history in South Africa. It was first created in 1956 to force retirement funds to invest around half of their assets in South African government and parastatal bonds. The level

Considering South Africa’s fiscal challenges, including tax shortfalls, high unemployment, and the poor state of many state-owned enterprises, it’s easy to assume this spells bad news for investors.

“

We are also exploring alternative financing instruments to allow pension funds, commercial banks, development banks and international financial institutions to participate in financing our infrastructure plans.

Enoch Godongwana

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Regional News

Photo Credit: energychamber.org

Oil and Natural Gas Projects in Southern Africa

No need to panic However, others have called for calm, noting that the industry is highly regulated and that the government is far from enforcing such regulations. Cameron McCallum, Managing Director of Netto Invest, said there are certainly concerns, but things may not be as bad as we believe.

Godongwana, the head of economic transformation for the ANC, has stated that the party is focusing on Regulation 28 of the Pension Funds Act, which regulation is designed to protect investors and ensure portfolio diversification while limiting the amount of pension funds that can invest in certain assets.

“He noted that the party is shifting away from enforced prescriptions regarding these investments,” said McCallum, adding that “The idea currently tabled is to broaden the investable options to enable higher levels of investment in unlisted asset classes such as infrastructure or ‘green’ projects.

“So, the keyword for us is ‘enable’, not ‘enforce’,” he stated.

While he admitted that he can’t predict how the legislation will unfold in the future, McCallum mentioned a couple of considerations that remain relevant, first that the process is still in its early stages, and no changes have been announced yet. Secondly, he added, pension fund assets in South Africa are well-regulated and protected and many stakeholders in the financial services industry would contest any restrictions that could harm investors in court.

“Policymakers also recognise that imposing significant restrictions on investments could lead to a shrinking pension fund industry. This decline would ultimately reduce the availability of capital, as members might either contribute less to their pension funds or withdraw their savings,” he said.

Adapted from Business Tech

The practice of prescribed assets has a long history in South Africa. It was first created in 1956 to force retirement funds to invest around half of their assets in South African government and parastatal bonds. The level of prescriptions rose for two decades and peaked in 1977.

After that, it tapered off before being scrapped in 1989.

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Regional News

NSSF Kenya Partners with Chinese Company to Bid for Road Project

Photo Credit: www.capitalfm.co.ke

The Nairobi-Nakuru-Mau Summit road is part of the Northern Corridor and among the most important roads in the region, transporting most of the westbound cargo from the Port of Mombasa and the Capital.

The National Social Security Fund (NSSF) and the China Road and Bridge Corporation (CRBC) have submitted a joint proposal to the government for the dualling of the Rironi-Mau Summit Road.

On Tuesday, May 27, the Kenya National Highways Authority (KeNHA) announced that CRBC was in a consortium with NSSF for the road project estimated to cost over Ksh90 billion (about UGX2.7 trillion).

Should the two be awarded the company, NSSF is expected to use pension funds to finance the Public Private Partnership (PPP) project.

“The initiative is a brownfield project that will involve the upgrade, dualling and expansion of the Rironi-Nakuru-Mau Summit Road (175km) and rehabilitation of the 58km A8 South between Rironi and Naivasha via Maai Mahiu, to pave the way for toll-

ing under a DBFOMT model,” read the disclosure in part.

“The toll rates shall be determined in line with the National Tolling Policy (when approved). Escalation of toll rates shall be done as per the Policy,” it further said.

NSSF and CRBC are facing competition from the Shandong Hi Speed Road & Bridge International Engineering Co Ltd, which also sent a proposal to the government.

This is not the first project that the China Road and Bridge Corporation will be undertaking in Kenya.

The Chinese company is responsible for the ongoing Talanta Stadium and previously constructed the Nairobi Expressway and the Standard Gauge Railway (SGR).

The move by NSSF to bid for the project is set to draw mixed reactions, given the recent remarks by Kiharu MP Ndindi Nyoro, who opposed such actions.

Photo Credit: news.switchtv.ke

Kenya’s President, William Ruto

“Civil servants’ money should not be used in such a manner because the government has the responsibility of creating a conducive environment for economic growth so that it can generate more revenue,” remarked the MP. “If infrastructure development were such a lucrative sector, all the private sectors would have invested there because of the high returns,” he added.

Adapted from Nairobi Leo.Co.Ke

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Personal Finance

Look Out For The 2025 NSSF Financial Literacy Webinars Anna Maria Sanyu Financial Advisor

The NSSF Financial Literacy Programme, created in 2019, has transformed the lives of over 2 million members. The programme provides NSSF members with access to professional advice on finance, investment, and business solutions, empowering them to make informed decisions.

It is flexible, offering sessions online, in workplace settings, through peer cohorts, and in institutional arrangements.

The table below shows the calendar of Financial Literacy webinars for the first half of FY2025/26.

Tracking your financial habits is essential in your personal finance journey.

Month

Webinar Topic(#Savings as a way of Life)

July 25th 2025

Leaving No One Behind: Building a Culture and Ecosystem of Saving

August 29th 2025

Your Behavior and Money: How Your Behavior Shapes Your Wealth

September 26th 2025

Investing Your Way to Prosperity: Navigating the Wealth Dilemma

October 31st 2025

Invest with confidence: Navigating Financial Investment options

November 28th 2025

Small Steps, Big Impact: How Personal Actions Shape the National Picture

December 19th 2025

Turning financial gains to Festive Joy What’s the plan?