Makerere University

Out to Lunch

#OutToLunch: What employees should know before launching a side hustle

By Denis Jjuuko On Friday 29 August this year, I was invited to speak to the staff of Uganda Registration Services Bureau (URSB) about side hustles for corporates during their end of month Fireplace session. The Fireplace is an internal meeting where guest speakers discuss various topics every last Friday of the month. Here is an abridged version of my presentation. I believe others could find an interesting thing or two. In August 1972, Idi Amin launched his so-called economic war which led to the expulsion of Asians. In the months that followed, Uganda experienced unprecedent inflation. With the economy in free fall, many workers realized that their salaries were no longer sufficient. At Makerere University, the country’s premier higher institution of learning, professors took to driving taxis to supplement their income. One professor, until recently a minister in Museveni’s government, was the taxi driver. His colleague, an education professor, was the ‘turn boy’ or conductor. Others became teachers in secondary schools. Their wives turned the garages of their residences into unofficial canteens. Amin’s economic war led to the birth of side hustles in Uganda, where employees do something outside their official jobs to supplement their incomes. The importance of side hustles was further cemented in 1990s when the Structural Adjustment Programme led to thousands of people losing their jobs. Recent mergers of government agencies (rationalization as they call it) and closure of funding organizations like USAID continue to make employees think of life beyond their offices with polished floors. So, if you are thinking of starting a side hustle, what key things should one think about? Here are a few points to ponder. Time: Side hustles for people doing 8-5 jobs should not be too time consuming. Get a hustle like buying and selling land, flipping houses, buying and selling cars, bonds and unit trusts (if you can call them side hustles), or even supplies. Bars, salons, and restaurants require a lot of time when starting which you may not have as you have to concentrate on your job as well. Also, workers in such sectors are unreliable. You don’t know which day they will not turn up. Or when they will sell a crate of beer and replace it creating an impression there are no customers. Still, you don’t want to stay awake in a kafunda so that a few men not eager to get home can finish their beer and leave to enable you close the day’s operations. Cash payments: Avoid side businesses where most of the payments are made in cash. You don’t know when the workers will disappear with it. Most side hustles are small and may not have systems to protect revenues especially in the beginning. Side businesses where people pay in the bank are better. There you can protect your revenue. I know there are mobile money payment codes these days but there are still a few issues with them to be fully embraced. Small is beautiful: All business plans show profitability at one stage. Also, however much research you do, there will always be stuff you will only learn when doing the business. Start small and allow yourself to learn the trade. Don’t throw all your life savings in a business at the beginning. Don’t borrow to start. If you are to borrow, maybe from family. Start with your savings or pool money with others. Six months rule: Before you quit your job to fully concentrate on the side hustle, instruct your bank to send 100% of your salary to an investment account or unit trusts or bonds. Don’t touch this money. Now, see if you can rely on the side hustle for six months. Pay all business and personal expenses from the business. That way you will know if the business is profitable or if you have been subsidizing it with your salary. That way you will avoid looking for a job a few months of leaving one. Do what others are doing: Your side hustle doesn’t have to be innovative or ground breaking. Do what others are doing. See a sector you can invest in, where you can easily raise start up capital and get going. But run it better than others. Ground breaking ideas can then be implemented when you have money you can afford to lose or can raise the required capital from angel investors. Cashflow is the lifeblood of business: Look for businesses which have good cashflows. Planting trees that mature after 20 years should be for people investing for retirement. But doing something that brings in money regularly helps keep the business operational without necessarily relying on the salary or salary loans. Do people need to do typical side hustles? Should everyone do business? There is no clear answer. One just needs to find a model that works for them. Apart from some telecoms and banks, many businesses in Uganda that publicly publish their returns show net profitability of around 10%-15% annually. This means that an employee who invests in treasury bonds or unit trusts is likely to earn the same percentage without any hustle of running after the ever-elusive customers. It can also be a strategy of accumulating capital to venture into capital intensive side hustles that don’t require a lot of time like real estate. The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: The 2025 money guide to survive Uganda’s high dependency ratios

By Denis Jjuuko The year has kicked off with graduations for thousands of students both at Makerere University and Muteesa I Royal University. Many other universities will be holding similar ceremonies throughout the year. Graduation is one of the major pathways to employment. These ceremonies come at a time when Uganda Bureau of Statistics has just released a report that indicates a high dependence ratio for Ugandan workers. Apparently, the dependency ratio for persons aged 14 to 64 years stands at 83.8 percent. This means that “for every 100 working persons, there were 84 dependents,” according to a media report quoting the study. That is such a huge number. Ugandan workers largely work for dependents and that isn’t about to change. The average pay for a Ugandan worker is a meagre Shs200,000 per a month. So how does one survive in such an environment? There are many things that one would have to do to be able to celebrate another New Year’s Day in one piece. Since the year has just started, here is a 2025 money guide. Hopefully, it helps. Donations – There are a lot of expectations and sometimes entitlement. Some parents and guardians and people who fall in that category will frequently quote the 10 commandments particularly the one on honoring them. You will be expected to look after them, to share some money with them. In the informal sector, they may even demand that they receive the salary on your behalf especially in cases where they helped you get the job. The religious people will quote the Bible for some 10 percent. Many people will expect you to donate something but remember you can only give what you have. But since we are a social lot, set a certain amount to donate every month and live by it. Save and invest – Since you can only give what you have, you will need to save but saving alone won’t do much. You need to invest. That way you may have what to donate or actually nothing much to give. You would have to set aside a standard amount of money whenever you receive an income so that it goes into this. Unlike in the past, there are now many options such as unit trusts and treasury bills and bonds among others that allow you to accumulate money that you may invest elsewhere with time or leave it to grow. If you don’t have the discipline to save, identify five or so friends who are honest and do it together. Bank standing orders may be another solution. Emergency fund – But when saving and investing, remember there will always be some emergencies. You may fall sick or somebody you care about might. An emergency fund helps you not call everyone for a bailout. You draw money outside your main savings and investment account to cater for this. By emergency fund, I don’t mean money to attend a brunch at some hotel on Sunday. Debt payments – One of the advantages of living in a country like Uganda is that debt is many times avoidable. Commercial banks hardly issue out credit cards for all sorts of things like food and clothing. If they do, it is to their high net worth customers, who are very few in Uganda. It is fairly easy to only eat what you can afford. And since many people who pretend to sell designer clothes import fake ones, there is no need to spend money on such. But fintechs have made it easy to borrow using your phone. Only borrow when you can’t avoid it and pay it back as soon as possible to avoid high interest rates over a very long period unless if you are paying for your home or investing in a business. A personal car is great but it doesn’t have to be so expensive. There are lots of broke people selling off their cars, buy from them instead of going to the “bond” in Nakawa or Kyambogo. Skillset improvement – The biggest way to improve your income is through skills. Employers are looking for people with particular skills, who are good or can become good at what they do. By just watching YouTube tutorials, there are lots of things one can learn depending on their chosen profession or career interest. Watch, learn, practice. Be innovative—not by necessarily creating new things rather finding different ways to do something. Date within your means – If you are a man living in Kampala and of average means, you will have to date within your means. Not somebody who wants to drink whiskey by the bottle in Kololo or Bugoloobi bars. Not somebody who is pressurizing you to buy a Subaru, rent a fancy apartment in Kyanja and fund her holiday (read photoshoot) in Dubai. If she is inviting 50 friends for her Kukyala, that is a red flag! The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch Align university government sponsorship to national development plan

By Denis Jjuuko For decades after its founding, Makerere University admitted students according to their performance. Success for most students (and even parents) meant studying hard to qualify to be admitted. Getting admitted to Makerere on government sponsorship was the holy grail of success. Parents bragged about it. School administrators’ profiles were enhanced. Somebody told me, an entrepreneur even named his school “T-Junction to Makerere Secondary School.” In the 1990s, Makerere started admitting self-sponsored students and government set up other universities. What you needed was money and two principal passes at A-level. Entrepreneurs set up universities too and hostels to offer accomodation. Getting a university degree was demystified even though the percentage of Ugandans with degrees isn’t that high. With all changes that the government made to ensure more people get admitted to universities, one thing remained unchanged — how to get admitted on government sponsorship. The criterion for one to get admitted is solely based on academic performance. Score the highest points in the final national secondary education exams and you get admitted to a public university on government sponsorship. The majority of people who score the highest grades are from premium schools where parents and guardians have been paying a lot of money a year. Of the 1,474 students admitted to Makerere on government sponsorship this year, 346 students representing 23.4% were from schools (Kitende, Buddo, Gayaaza, Mary Hill, Mengo and Namugongo) where annual tuition fees on average is Shs6m. At Makerere, the average annual tuition fees is Shs2.4m. So why give a scholarship to a kid whose parents can afford Shs6m in fees a year in secondary schools? Although they introduced a system that picks highest performing kids per a district, still these are kids attending the most expensive school in that district. There is therefore no need to reward them with government scholarships. They are already privileged. There was even a student from an international school where the average fees is Shs30 million a year that was admitted on government scholarship! It is a mockery! In fact, I know a few who get admitted to Makerere on government scholarships but their parents never send them there as they can afford fees in ivy league universities in America. When I was at graduate school at Rhodes, I saw a few such kids. Others don’t like the courses government admits them to, so they instead opt to pay for themselves as privately sponsored students. The blanket admission of students to universities solely based on their academic performance needs to be rethought by introducing a scholarship program that rewards those who actually need and deserve the government programs. Makerere University already runs the Mastercard Foundation Scholars Program for bright but needy students. You only get this scholarship if you really deserve it. To be admitted on the program, the administrators visit your home, talk to the neighborhood, parents, previous school and establish that you truly deserve the scholarship. Makerere and indeed other universities can replicate this. Of course, this would need parliament and government to think beyond the next political election and make this hard decision. Afterall, the majority of people who vote will never have their kids admitted on government scholarship as they won’t afford the secondary school fees where the majority of those admitted on government sponsorships attend. But selling unachievable dreams is big business for politicians. Secondly, government can identify academic courses aligned to the national development plan or Vision 2040 and ensure students on government programs are only admitted to those ones. Let us for example look at the automotive industry which is one of the ways through which industrialization can take place in most countries. We can ringfence government sponsorships to those studying courses to do with the automotive and mobility sectors. That way we can build our capacity for this sector. Electric vehicles are here but what are our universities doing about it? Artificial intelligence (AI) is herald as the next big thing that is changing the world. Are we investing in human capital development for it or we can explain? Thirdly, once anyone is given a government sponsorship, there should be a contract that they will work in the country for a number of years or have to pay back the money with interest. But we sponsor the students to study medicine and they end up working at Aga Khan and Nairobi hospitals in Kenya. The teachers we previously trained ended up in South African schools. Many others we are sponsoring today are ending up in Saudi Arabia and Oman (of all places!). We need to rethink our return on investment when it comes to government sponsorships. The writer is a communication and visibility consultant. djjuuko@gmail.com

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