UGANDA GATSBY TRUST
SRATEGIC PLAN 2016- 2021
5/6/2016
Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Message by Chairman Board of Trustees
The founding of UGT in 1994 was strategically bed rocked with the financial and technical support of Gatsby Charitable foundation (GCF) of Great Britain. The key core benefactor financially was Lord Sainsbury and technically Mr. Lawrence Cockroft both of London. UGT enjoys a vibrant TrusteeBoard whichwas led by our pioneer chairman Dr.W.S. Kalema whorecently retired.Prof J.B. Byaruhanga was the founding General Manager until 2013. Key areas of Investment were: Supporting SSE’s through student attachments coupled with supervisory support of the academic staff members of the Faculty of Technology; opening up enterprise clubs in various urban centres of Uganda; conducting technological innovations through student’s projects; offering academic scholarships to needy technology students; opening up microfinance services to SSEs; Impacting business developments services (BDS); extending into environment conservation by starting tree planting project (UTRL) project and finally new investment efforts in such enterprises as Enterprise Financial Centre (EFC) which is an affiliate of DID of Canada.
Successes have been registered as well as failures, the later leading to closures of such off springs as GMFL, GUL, Gatsby Garage, developing business parks and BDS among others. UGT is now focusing on Strategic initiatives as outlined in the next 5 year strategic plan. UGT has a future which must be protected. UGT is really proud to have a dynamic Secretariat, Kampala Accountancy Bureau (KAB) Ltd. We shall grow together.
Prof. Eng Dr. Badru Kiggundu Chairman Board of Trustees
2 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Board of Trustees for Uganda Gatsby Trust Prof. Eng. Dr. Badru Kiggundu holds a Bachelors degree in Engineering (BSc 1969), MSc 1971 Carnegie-Mellon University USA and PhD 1981 University of New Mexico USA. Prof. Eng. Dr. Kiggundu is a Geotechnical/Bituminous materials specialist. His research in Geotechnical and Bituminous materials has contributed a lot in the study of the same. He was Associate Professor, head of Department, Civil Engineering and later Dean of Faculty of Technology at Makerere University. He has held chairmanship of several conferences on Earthquake disaster preparedness and Engineering in Uganda.
He has been a consultant on various road works rehabilitation projects and as Director Technology Consult Ltd. In Uganda, He has authored an excess of 50 publications. He is the current chairman of the Electoral Commission in Uganda, the post he has served since 18th November 2002 to present.
Prof. Barnabas Nawangwe is a holder of a PhD in Architecture from Kiev State University of Engineering and Architecture. He is an architect/planner by profession. Prof. Nawangwe is currently Deputy Vice Chancellor (Finance & Administration), Makerere University. Prior to that, he was the Principal College of Engineering, Dean Faculty of Technology and Head of the Department of Architecture from its inception in 1989 at Makerere University. Prof. Nawangwe is a Non-executive Director at Barclays Bank of Uganda, Member of the Board of Trustees of the Uganda Society of Architects, Chairman of the Steering Committee of the Centre for Tobacco Control in Africa (CTCA), Member of the Board of Trustees of Uganda Gatsby Trust, member of the Board of Directors of the Makerere Joint Aids Programme (MJAP) and Chairman of the Policy Advisory Committee of the Council for Frontiers of Knowledge (CFK). He is a Past President of the Uganda Society of Architects, and Past Chairman of the Architects Registration Board. Prof. Nawangwe has supervised several Masters and PhD students. He has presented numerous papers at local and international conferences and published several articles in internationally reviewed journals and books. He has also been author to a number of research reports. Prof. Nawangwe is a Registered Professional Architect, and has worked widely as a consulting Architect in Uganda and beyond. He has been responsible for the bulk of the rehabilitation work and new buildings at Makerere University over the last several years. He has a long experience in architectural design, physical planning, and interior design. He has been lead consultant on several projects both in Uganda and internationally.
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Patrick T. Banya holds a Bachelor of Arts degree in Political Science and German fromMakerere University, a Master of Arts degree in Political Economy and Government from the City of London University UK and a certificate in Information Technology Management from Aptech Worldwide. Patrick is currently a policy reform specialist. He has worked with the World Bank Group supporting different governments in the sub-region to design and implement with innovative business environment and investment climate reform interventions.
Prof. Henry Mwanaki Alinaitwe is the Principal of the College of Engineering, Design, Art and Technology and Professor of Civil Engineering and Construction at Makerere University. He has previously served as Deputy Principal of the same college, Dean of the School of the Built Environment, and Associate Dean (Undergraduate affairs) of the Faculty of Technology. Henry is a registered and practicing civil engineer.
He holds a PhD in Engineering from Lund University, Sweden; a Licentiate degree from Lund University; an MSc in Construction Management from Loughborough University, UK; a Master of Engineering Studies in Civil Engineering from the University of Sydney, Australia; and a Bachelor of Science in Engineering degree from Makerere University, Uganda.
Henry is currently the Chairman of the Board of Directors of Technology Consults, a member of the Global Engineering Dean’s Council and Vice President (East Africa) of African Engineering Educators Association.
Irene Josephine Mutumba is a seasoned manager, business development consultant with more than 20 years’ of experience in social and economic empowerment of communities. She is a professional teacher/education and learning expert. Iren is also a financial education and literacy expert with more than 10 years empowering young people and communities. Iren is a visionary leader, social entrepreneur who received a Global Asoka fellowship award in 2005 for her innovative and creative models in reforming education and learning in Uganda. She is a two- time “Women Champion” awarded for promoting financial education, social entrepreneurship and social enterprise in Uganda’ Irene is a Rotarian with passionate to give and serve and also a ‘Catalyst of Change’ with a passion to ‘Make her difference to Make a difference’
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ACRONYMS AND ABBREVIATIONS
Abbreviation Meaning AMFIU Association of Microfinance Institutions of Uganda BOT Board of Trustees BDS Business Development Services BTVET Business Technical and Vocational Training CAOs Chief Administrative Officers CBOs Community Based Organisations CEDAT College of Engineering, Design ,Art and Technology CBRI Community Based Registration Initiative EADB East African Development Bank EFC Entrepreneurs Financial Centre) Ltd FBOs Faith Based Organizations FY Financial Year GCF Gatsby Charitable Foundation GDP Gross Domestic Product GMFL Gatsby Microfinance Limited GOU Government of Uganda GUL GATSBY Uganda Limited ICT Information Communication Technology KGT Kenya GATSBY Trust KAB Kampala Accountancy Bureau KPI Key performance Indicators M&E Monitoring and Evaluation MYC4 NaFORRI National Forestry Resources Research Institute NFA National Forestry Authority NGO Non Governmental Organization SMEs Small Scale and Medium Enterprises SPV Special Purpose Vehicle SSEs Small Scale Enterprises UK United Kingdom URA Uganda Revenue Authority URSB Uganda Registration Services Bureau UTRL Uganda Tree Resources Limited VAT Value Added Tax
5 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
Table of Contents Message by Chairman Board of Trustees ...... 2 ACRONYMS AND ABBREVIATIONS ...... 5 EXECUTIVE SUMMARY ...... 5 1.0 INTRODUCTION ...... 12 1.1 Background ...... 12 1.2 Components of the Strategic Plan ...... 16 1.3 Strategy Development Process ...... 17 1.4 Management and Governance Structure ...... 17 1.4.1 The Governance Team ...... 17 1.4.2 UGT Secretariat (Management team) ...... 19 1.5 UGT Business Model ...... 20 1.6 Structure of the Strategic Plan ...... 20 2.0 UGT SITUATION ANALYSIS ...... 22 2.1 Historical Analysis of UGT activities/projects in Uganda since 1994 .... 22 2.1.1 Entrepreneur Clubs (Gatsby Clubs) ...... 22 2.1.2 Credit programme ...... 23 2.1.3 Gatsby Microfinance Limited (UGT Subsidiary) ...... 24 2.1.4 Business Parks ...... 26 2.1.5 Foundry...... 29 2.1.6 Garage ...... 29 2.1.7 Gatsby Uganda Limited (GUL) ...... 30 2.1.8 Hardware Shop ...... 31 2.1.9 Business Development Services (BDS) ...... 31 2.1.10 Technology and Innovation ...... 32 2.1.11 Scholarships Programme ...... 34 2.1.12 Tree Bio-technology Project ...... 35 2.1.13 Entrepreneurs Financial Centre Ltd ...... 38 2.2 Projects Summary/Analysis...... 39 2.3 Current Principal Activities of UGT ...... 43 2.4 SWOT Analysis ...... 44
6 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 2.5 PESTEL Analysis - Business Environment Scan ...... 44 2.6 Financial Situation ...... 47 3.0 STRATEGIC DIRECTION (2016-2021) ...... 49 3.1 High Level Statements ...... 49 3.2 Strategy and Strategic Objectives...... 50 3.2.1 New thematic areas of focus ...... 50 3.2.2 Strategic Objectives ...... 51 4.0 FINANCING THE STRATEGIC PLAN ...... 58 4.1 Funding Sources ...... 58 4.2 Proposed Governance and Management Structure Error! Bookmark not defined. 5.0 IMPLEMENTATION PLAN/LOGICAL FRAMEWORK ...... 61 5.1 Strategic Roadmap ...... 61 6.0 MONITORING AND EVALUATION ...... 63 6.1 Monitoring and Evaluation Framework ...... 63 6.2 Risk Management ...... 63 6.2 Critical Success Factors ...... 66
7 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 List of Tables Table 1: Key UGT Functions areas ...... 14 Table 2: Trustee Members ...... 17 Table 3: Output Performance for UTRL……………………………………………….…34 Table: 4: EFC Share-Distribution……………………………………………..……………36 Table 5: Projects Status/UGT Performance……………………………………………..37 Table 6: UGT Investments ...... 43 Table 7: SWOT Analysis ...... 44 Table 8: PESTEL Analysis ...... 45 Table 9: Financial Assets ...... 47 Table 10: UGT Core Values ...... 50 Table 11: Strategic Objectives ...... 50 Table 12: Sources of Funding ...... 59 Table 13: Risk Assessment and Analysis Matrix ...... 65 List of Figures Figure 1: UGT key activities………………………………………………………….14 Figure 2: Schematic presentation of the process ...... 16 Figure 3: Organisation structure ...... 18 Figure 4a: Finished Products of Theresa Wine ...... 27 Figure 4b: Packaging of Theresa Rozelle ...... 27 Figure 5a: Makerere Garage ...... 30 Figure 5b: Motors vehicles for repair ...... 30 Figure 6a: Power Stabilizer ...... 32 Figure 6b: LEEM Products (Solar Flat irons and solar kettles) ...... 32 Figure 7a: Technicians at Work ...... 34 Figure 7b: Products ready for Market ………………………………………………………31 Figure 8a: Watering the Plantlets ...... 37 Figure 8b: Plantlets ready for Plantation ...... 37 Figure 9: Management Structure ...... 60 Figure 10: Graphical Analysis of the Series of Strategic Emphasis of UGT Implementation Model ...... 62
Annexes Annex 1: Persons Contacted ...... 67 Annex 2: Capital and Operating Expenditure Projections ...... 68
8 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 EXECUTIVE SUMMARY
Uganda Gatsby Trust (UGT), registered as a Non-Governmental Organization (NGO) in 1994 under the Non-Governmental Organizations Registration Act 1989 (Uganda), received core funding support from Gatsby, Charitable Foundation in the UK since inception. The Trust is one of the four Trusts established in Africa with the aim of fostering linkages between the Faculty of Technology Makerere University and small scale and medium enterprises (SMEs).
The initial functional areas of Uganda Gatsby Trust involved training, technology transfer, offering business development services to small scale enterprises (SSEs), financing SSEs, providing shelter to SSEs and generating income for the Trust and then the Faculty of Technology.
A consultative approach was adopted in the development of this Strategic Plan to ensure ownership of the formulation process and implementation. A wide spectrum of stakeholders was consulted including Board of Trustees, Management (Secretariat) and Management of subsidiary companies.
A Board of six Trust Members governs UGT. The Mandate of the board of Trustees is to formulate policies and decisions for the Trust and ensure the Trust operates in compliance with the prevailing socio economic environment. UGT has a secretariat headed by Kampala Accountancy Bureau (KAB). In order to enhance its strategic initiatives, this Strategic Plan proposes an incorporation of a Technical Advisor (TA) whose roles are well outlined.
Uganda Gatsby Trust undertook a number of projects since its inception which included; Gatsby Microfinance Limited (GMFL), Entrepreneur Clubs, Foundry, Garage, Hardware, Business development services, technology and innovations and scholarships and the Tree Bio-technology Project under Uganda Tree
9 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Resources Limited (UTRL).Significant growth in its activities/projects was registered. However, challenges were also realised whereby some of the projects are no longer in operation.
The main current activity of UGT as per audited report for the year ending
March 2015 is the Investment in EFC Limited and Uganda Tree Resources
Limited (Subsidiary Company).The Trust has financial assets amounting to UShs.1.4bn as at 31st March 2015.
In order to strengthen its activities in the next five years, UGT focus areas will include: Strengthen the existing enterprises of UGT and Investments and actively participate in climate change activities; Promoting market led Enterprise Development (ED) through Innovations, Incubations and Public Private Partnerships (PPPs)/linkages; Leverage relationship between UGT and Makerere University in order to achieve intended UGT outcome areas of focus including; Enterprise Development, Youth employment/empowerment, Research, Skills Development; Reposition UGT as a think tank for policy intervention/engagement and a platform for Enterprise Development alternatives.
The Strategic Plan envisages that UGT will get its funding from various sources including: Grants and Guarantee, professional fees, research and innovation outputs, Interest from fixed deposits, Dividends from subsidiary companies and receivables among others.
Uganda Gatsby Trust model of implementation shall be guided by a series of strategic initiatives/actions supported with deliberate efforts and commitment by the Trustees during this five year planning horizon. Year 1- the strategic emphasis shall be on implementing basic structures, processes and systems and subsequently re-engineering business tactics, processes, systems and service delivery structures. Years 2-3 will focus on rolling out strategic initiatives and
10 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 interventions and Years 4-5 shall be on attaining sustainable growth and pursuing un- implemented initiatives as outlined under this strategic plan.
In the course of implementation of this Strategic Plan, monitoring and evaluation shall be done at three levels. At level one, the monitoring and evaluation shall be on implementation of strategic initiatives on quarterly and annual basis based on set targets and performance measures. At level two, the monitoring and evaluation shall be on the progress of implementation of strategic objectives on an annual basis and the final evaluation shall be at the end of the five year strategic plan cycle.
Critical Success factors for this plan include: Strategic leadership, commitment from the Board of Trustees and Management, regular monitoring and evaluation of the strategic and business plans, adequate resource mobilsation and effective control of UGT’s expenditures among others.
11 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 1.0 INTRODUCTION
1.1 Background
Uganda Gatsby Trust (UGT), registered as a Non-Governmental Organization (NGO) in 1994 under the Non-Governmental Organizations Registration Act 1989 (Uganda). The Trust received core funding support from Gatsby Charitable Foundation (GCF) of United Kingdom (UK) since inception. GCF supports a number of programmes in Africa, with a view of reducinge poverty amongst low income groups in rural and urban areas, support the development of small scale enterprises and assist in the development of new institutions to promote economic growth at the ‘grassroots’.
In the 1990’s, most Universities in Sub Saharan Africa, Makerere University inclusive, had minimal linkages to Industry with the later not making significant contribution to curricula and research at Universities. Most Universities produced graduates without skills required by the industries. This was mainly due to lack of structures and policies for promotion of Industry –University linkages and partnerships. The Industry sector did not make significant contribution towards university education.
Uganda Gatsby Trust is one of the four Trusts established in Africa with the aim of fostering linkages between the Faculty of Technology of Makerere University and small scale and medium enterprises (SMEs). The Trust was established to promote University-Industry cooperation in Uganda. It is different from the other Gatsby Trusts in that the Technology department of Makerere University together with Ugandan Manufacturing Association (UMA) and GCF (UK) were actively involved in UGT’s conceptualisation and subsequent evolution. The then Faculty of Technology (which is currently embodied in the college of Engineering, Design, Art and Technology – CEDAT), Makerere University was chosen as the most suitable location for the transfer of knowledge to small scale and medium enterprises (SMEs). The focus was on SMEs because of their significant contribution to the economic and social development of the country. Through continuous interaction with SMEs, staff and students of engineering would appreciate the potential and opportunities of the SME sector towards employment creation.
Uganda Gatsby Trust had a substantial small scale enterprise focus. The Trust promoted two fully owned subsidiaries: Gatsby Microfinance Limited (GMFL) and Gatsby Uganda Limited (GUL). GUL divested from two enterprises – a foundry and a garage. The Trust took on two significant programmes which went beyond financial and business development support for small scale enterprises (SSEs). These included: Business Park initiative, with already built workspaces for SSEs in two locations i.e. Jinja and Mbarara; . Tree Biotechnology project which was to commercialise clonal tree technology, manage three regional nurseries and support eucalyptus and pine tree nurseries across the country. The key initial functional areas of UGT involved: Training, technology transfer, offering business development services to small scale enterprises, financing SSEs, providing shelter to SSEs and generating income for the Trust and the then Faculty of Technology. These are illustrated in Table 1. Figure 1 also illustrates the key outcomes of the various projects which were carried out by UGT.
13 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Table 1: Key UGT Functional areas Key Functions Areas Key Activity areas 1. Training and a) Provide training to SSEs / clubs; Scholarships b) Provide training for engineering students; c) Offer students scholarships in engineering and technology. 2. Technology transfer d) Part of knowledge transfer and partnership for Faculty of Technology; e) Community service for Faculty of Technology; f) Technology staff and students developing technologies for SSEs. 3. Business Development g) Provide BDS through management and Support technical training, workshops, exhibitions (regional, national and international), technology development, student placement, business planning and information dissemination; 4. Financing SSEs h) Avail credit facilities to SSEs; 5. Shelter i) Provide shelter to SSEs; 6. Income generation j) Generate income for the Trust and the Faculty of Technology at the University. Source: UGT records
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1.2 Components of the Strategic Plan
This Strategic Plan comprises of four main components: i. Historical Review of UGT activities and projects since 1994 to date; ii. Current situation analysis (where are we now), moved on to determine where we want to be in the next 5years (Vision/Mission/Core Values); iii. Determine how to get there ( New strategic Initiatives); iv. Determine how we will know if we have arrived and how to stay there (sustainability). Figure 2 shows a schematic presentation of the process followed in designing this Strategic Plan.
1. WHERE ARE WE 2. WHERE DO WE NOW? WANT TO BE? Current situation Vision/Mission
Capacity
4. HOW DO WE KNOW WE HAVE ARRIVED & 3. HOW DO WE GET HOW DO WE STAY THERE? THERE? (Monitoring of KPIs Strategies/Actions ,Sustainability)
Figure 2: Schematic presentation of the process
16 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 At the centre of this process, there is need to build sustainable capacity to pursue the mission in a more coordinated, synergistic and efficient manner.
1.3 Strategy Development Process
A consultative approach was adopted in the development of this Strategic Plan to ensure ownership of the formulation process and implementation. Two consultative meeting/workshops were held with the Board of Trust members which did provide substantial input into the plan A wide spectrum of stakeholders was consulted including Board of trustees, Management (Secretariat) and management of subsidiary companies (See annex 1).
Various key legal, policy, planning and consultancy documents were also reviewed to inform the situational analysis of UGT. To inform the Strategic Plan development, relevant information and data from the literature review and stakeholder consultations was compiled, analyzed and interpreted to derive key strategy drivers, the resulting themes and key objectives that must be pursued over the next five years.
1.4 Management and Governance Structure 1.4.1 The Governance Team A Board of six Trust Members governs UGT as shown in table 2: Table 2: Trustee Members Position Eng.Dr. B.M.Kiggundu Chairman/Permanent Trustee Prof. SSentamu Ddumba Vice Chancellor Makerere University/Permanent Trustee Mrs. Irene Mutumba Permanent Trustee Arch. Dr.Barnabas Nawangwe Member Mr.Patrick Banya Member Prof. Henry Alinaitwe Member Source; UGT records
17 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 The constitution allows for eight Trustees at the time of formulating this Strategic Plan. Two positions are vacant and will need to be filled. The Mandate of the Board of Trustees is to formulate policies and decisions for the Trust and ensure the trust operates in compliance with the prevailing socio economic environment. Other duties of the Trustees include soliciting funds and offer strategic direction for the Trust. The Board of Trustee also performs the following roles: Ensure that a competent Board of Directors is selected for the subsidiaries; Ensure that the Board meets regularly and retain effective control of the subsidiaries; Empower the Board with the proper tools of managing the company (subsidiaries); Implement all Board resolutions and Cater for the necessary funding requirements of the subsidiaries. The Board of Trustee executes its mandate through a governance structure comprising of a secretariat and two committees namely Finance and Audit committees as shown in Figure 3.
Board of Trustee (BOTs) with Finance and audit committees
UGT Secretariat (Management )
(EFC) Uganda Tree Resource Limited 11% of share holding 99% of shareholding
Figure 3: Organisation structure
18 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 1.4.2 UGT Secretariat (Management team) The Secretariat is headed by Kampala Accountancy Bureau (KAB) Ltd whose initial contract was signed on 9thJanuary 2013 and subsequently renewed on 7th March 2014. The roles of the Secretariat are as follows:
a) Accounting duties which involves preparation of quarterly management accounts and dealing with any other accounting issues that the board may request; b) General administration duties which involves receiving and responding to emails from all stakeholders, dealing with correspondences of EFC,UTRL and GCF; c) Organize board meetings, at least three board meetings in a year. This will include organizing papers and taking minutes during board meetings; d) Filling Annual Returns at the Register of companies; e) Overview functions to EFCand UTRL in regard to progress/developments in these investments which are communicated to the board regularly as part of quarterly reporting. The overview function involve: . Review of management and any other reports from subsidiary companies before passing them to the UGT board; . Receive and review minutes of subsidiary companies and summaries the minutes for board attention; . Liaise with the management of Subsidiary companies to always ensure that board action points from board minutes are summarized and forwarded to UGT Board; . Any other overview role that UGT board may require to be carried.
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1.5 UGT Business Model
From the initial stages, UGT’s mission was to enhance competitiveness and growth of small enterprises in Uganda which it offered through the following services: . Know how/ Business development Services through management and technical training, workshops, exhibitions, technology development, student placement, business planning and information dissemination; . Productive Capacity through access to technology/technical inputs, workspace/ business parks, access to skills and loans; . Finance through business loans provided by UGT, GMFL and MYC4; Club based savings and credit activity; and access to other providers (facilitated by graduation and preparation of business plans); . Market Access through Gatsby Club showrooms and participation in exhibitions/trade fairs (both national and international) The current model entails the following: To link and collaborate with Makerere University in order to access University Researchers and Students and their research outputs; Linkage with enterprises which are market driven; Enabling enterprises competitiveness and growth through technology transfer , innovations and skill development; Nurturing and supporting tree resources for future generations and Participation in climate change activities.
1.6 Structure of the Strategic Plan
20 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 The rest of this Plan is structured as follows: Section two highlights the overall situation analysis of UGT. It begins by analyzing the history of the Trust followed by SWOT and PESTEL analysis. It also presents the current financial situation. Section three describes the new Strategic Direction of UGT. It mentions the new Vision, Mission, and Core values. Section four describes the sources of funding of the new strategic plan and proposed management structure. Section five describes the implementation mechanisms and section six describes the monitoring and evaluation networks of the Trust and its critical success factors.
21 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 2.0 UGT SITUATION ANALYSIS
2.1 Historical Analysis of UGT activities/projects in Uganda since 1994
UGT has been developing and adopting Strategic Plans since inception in 1994.The last Strategic Plan covered the period2006 to 2009 with following objectives: To develop network of micro-finance-enterprises linked to the Faculty of Technology, Makerere University.This would enable them increase the quality and value of their output. The network involved Gatsby Enterprise Clubs; To introduce engineering students to opportunities and potential of small scale and to assist them develop technologies appropriate to them; To utilise the Faculty of Technology staff to assist small scale enterprises overcome their problems through extension services and . To enable SSEs access credit for working capital and acquire technology for their growth; The Trust registered significant growth in its activities/projects since its inception in 1994 in order to full-fill its set strategic objectives. The highlights of the achievements and challenges are summarized as follows:
2.1.1 Entrepreneur Clubs (Gatsby Clubs) Uganda Gatsby Trust started work with SSEs in various towns in the country after recognising the need for an institutional structure. The UGT team noted that different SSE entrepreneurs would come for different discussions/ events and it was not easy to communicate and follow up and organise various programmes/ event. For each town in the country SSEs were invited to form themselves into town based clubs to interact with UGT and participate in its various programmes. These clubs were independent legal bodies and registered as community
22 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 based organisations (CBOs). Members paid UShs.100, 000 annually and elected their seven member honorary executive to manage the club affairs. By the year 2000, eleven such clubs with over 500 paid up members were already functional in different parts of the country. By March 2006, this network had increased to 21 functioning clubs with over 1,500 members.
By 2009 there were 1,084 members in 21 clubs. 14 of these clubs were formed by the year 2000 and further 7 were initiated during 2000-05. In 2009, after a gap of four years, two new clubs were initiated in Luwero and Kabale. Membership in the club ranged from 15 to 170 members with an average of 50 members. Each of the enterprise was employing 5 to 10 workers and this provided UGT with an outreach to 5,000 to 10,000 workers in the country.
A number of challenges faced the Gatsby clubs. These included; Poor Club’s Governance and Management i.e. domination by some leaders, lack of periodic meetings and executive re-election, weak accounting/ fraud or capture of benefits by a few members among others; There was a gap between members’ expectations from UGT and its ability to deliver. UGT tried to provide BDS through management and technical training, workshops, exhibitions (regional, national and international), technology development, student placement, business planning and information.
Currently the clubs are not functional in the respective towns.
2.1.2 Credit programme Uganda Gatsby Trust staff in discussions with entrepreneurs often noted their frequent need for access to finance for working capital (buying raw materials, holding inventories, meet running expenses before payments are received) and investments (machinery, workspace). Many of these SSEs did not have effective access to either
23 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 microfinance institutions or commercial banks. During 1996-2000, UGT supported these SSEs to access credit from the Co-operative bank against bank guarantee provided by UGT. However the Cooperative bank was closed in 1999 and the administrators appointed for liquidation used the easier option of calling on UGT guarantees for UShs.160 million rather than chasing defaulting borrowers.
From 2000, UGT set up a credit department and started lending directly through the clubs. Club members were encouraged to form themselves into small groups of 4/5 members. Peer pressure and access to bigger loans was expected to encourage members to repay loans. Borrowers deposited 20% of the loan amount as savings and could move from an initial loan of UShs.3 to 15 million over 4 cycles (3-6-10-15). UGT/ GMFL lost some of the historical data and detailed information on changes in outreach and portfolio were hard to calculate. The UGT Balance sheets showed that during 2002-06, the portfolio did not experience any noticeable growth and remained quite small. Repayment problems were growing. Club members thought the financing was a grant (not a loan), as many members had noted the grant funded development role of UGT. Peer group system was weak in design and implementation, UGT had limited, un-trained, and widely dispersed credit staff (four regional credit officers over 20 districts) and it was legally difficult for UGT as an NGO to enforce repayments.
2.1.3 Gatsby Microfinance Limited (UGT Subsidiary) In 2006 responding to the feedback from potential investors and pushed by legal constraints of enforcing repayments as an NGO, UGT decided to form a fully owned subsidiary: Gatsby Microfinance Limited (GMFL). UGT invested UShs.1.6bn in GMFL and also GCF lent UShs.3.1bn to GMF. The members of the loan committee for UGT credit programme were nominated as the new Board for the GMFL and the small credit team became the management team of the GMFL. Formation of GMFL created new excitement and ambitious expansion plans. GMFL with support from UGT submitted UShs.500 million loan application to
24 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Microfinance Support Centre Limited (MSCL). Oikocredit, Kenya, Blue Orchard Furg S.A., Switzerland and Stromme Foundation were also approached for capital. Microfinance Support Centre Limited approved and disbursed UShs. 200 million loan in the year 2006 (soon after GMFL was formed). The UShs.200 million was sufficient to finance only 36 additional clients. However, with hindsight it was clear that just incorporation of a new company without significant investment in staff and systems aggravated the problems. The crucial element of promotion from credit officer to Chief Executive Officer (was the expertise and experience, which was missing. By mid-2007, the UGT board realised that the loan repayment figures were inaccurate and GMFL was facing a major crisis. The Board formed a small crisis management team which took charge of the GMFL management, met regularly and took rapid decisions to turn around performance and improve data and its reporting systems. A new General Manager for GMFL was recruited in December 2007, nine credit officers were subsequently recruited and the GMFL board significantly strengthened.
In 2008 UGT/GMFL forged a partnership with MYC4, even though GMFL itself was in the midst of recovery from a major crisis and had a small, poor loan portfolio quality. MYC4 was a Denmark based company which did seek to bridge the gap between people with means and people with needs. MYC4 leverages the power of internet to mobilise capital from social and other individual or institutional investors in developed countries to invest in small businesses in Africa. MYC4 made its first investments in Uganda which Uganda accounted for 45% of the capital invested and 55% of the 5,167 businesses financed amongst 7 countries in sub-Sahara Africa. UGT did capture 17% of the MYC4 global portfolio and 14% of all businesses financed.
Despite the partnership, GMFL continued facing several challenges both financial and managerial. GMFL was registered as a Tier 4 (non- deposit taking) microfinance institution which was not directly
25 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 supervised by Bank of Uganda under the Microfinance Deposit Taking Institutions Act of 2003. GMFL reported to Association of Microfinance Institutions of Uganda (AMFIU), a performance monitoring tool developed for Tier 4 organisations. AMFIU was lobbying and advocating for an appropriate regulatory framework for Tier 4 MFIs. GMFL was sold to Premier credit in May 2015 at a loss and is currently under liquidation. 2.1.4 Business Parks
Uganda Gatsby Trust in its work with SSEs had noted significant challenges faced by SSEs operating in congested city streets. Many entrepreneurs were renting their workspace and faced a number of strategic and operational challenges such as constrained work space, landlords frequently increasing rents and not permitting machinery installations in rented premises. The Trust noted the entrepreneur’s aspirations to own their work space and saw an opportunity in helping enterprises to formalise their operations and enhance their investments and productivity. It was also expected that formal workspace will be a useful collateral for future borrowing and co-location with similar enterprises will help the SSEs to increase their profile and access to a host of services (such as sharing machinery, bulk purchase of raw materials or joint marketing efforts). UGT reckoned that while large enterprises could make such investments on their own, the SSEs would need considerable support to achieve these goals. a) Business Park Jinja Victoria Business Park was developed at a site across the Nile River from Jinja town. The 5 acre plot was developed such that a significant portion was sold to an anchor tenant/ investor (Fruits of the Nile) and the proceeds from this sale were used to develop 13 business sheds and leave some land for future development. The Jinja project did cost UShs.375 million and the notional sales proceeds wereUShs.527million.This implies that if all the investments and project costs had been incurred in the same year, this would generate a surplus of UShs.152 million.
26 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
One of the successful entrepreneurs under the Jinja business Park is Ledo Uganda Limited manufacturing Theresa Wine shown in figure 4a and figure 4b. Theresa Rozelle Wine is brewed from organically grown and selected species of Rozelle hibiscus. It is fermented and allowed to mature with time. The wine is widely found in big super markets in Kampala and upcountry. The firm, an SME, is one of the Jinja Gatsby clubs which benefited from the credit programmes, shelter, business development services and trade exhibitions by UGT. The firm currently has a labour force of seven permanent staff and twenty six casual labourers. The firm has linkages with farmers who supply it with raw materials ((hibiscus fruits). The firm has plans to expand its production due to high demand but it is constrained by limited financial resources.
Figure 4a: Finished Products of Theresa Figure 4b: Packaging of Theresa Rozelle Wine Wine
Business Park Mbarara The Mbarara project had a big piece of land which was purchased and club members partly paid for the land cost. UGT successfully mobilised £150,000 GCF grant and £120,000 grant from a DFID project (Business Linkages Challenge Fund). UGT also succeeded in confirming UShs.1.09 billion loan sanctions from East African Development Bank (EADB). Thus UGT had succeeded in mobilising 94% of the project cost from grants and loans. The construction was then contracted out at a cost of UShs 2.09 billion. But the success in finalising financing arrangements did indicate that the club members and potential owners had just a 5 to 6% financial stake in the project.
27 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
The foundation stone for the park was laid in October 2005 and the contractor commenced work in June 2006. The first two blocks of the Business Park were inaugurated in February 2007 and five blocks were ready for occupation by August 2007. Although 44% of the project cost was financed by grants, UGT/ GUL were still liable to pay interest and other fees on the EADB loan. Members were very slow at making their contributions, and UGT needed to pay for VAT (not anticipated in project financing and not covered by EADB loan), UGT could not keep pace with the EADB loan repayment and was faced with significant financing and reputation risks. VAT was payable on construction but UGT could seek refund from Government subsequently. So while this did not add to costs, it aggravated short term pressures on liquidity management. GUL decided to sell the units through public advertisements in August 2007. Even after wide publicity, the initial member’s response in paying for units was very slow and UGT had to issue deadlines to club members to pay up at least 10% of the project cost by November 2007. By end of 2007, GUL needed UShs.775 million to finalise construction of the park as well as to meet operational expenses and commitments to EADB.
The Government of Uganda had plans and budget for building industrial parks. UGT efforts in Mbarara Business Park were noticed and were publicly highlighted in the President’s New Year’s address in January 2008.This led to active discussions with the Government regarding buying the Mbarara Business Park through Uganda Investment Authority (UIA). After valuation, UGT was paid UShs 2.61 billion in 2008 for the Mbarara Business park. UIA directly paid off the EADB loan and accrued interest and the balance was handed over to UGT. GUL handed over the project with 60 constructed units. UGT/GUL handed over the members’ contributions for land and unit constructions to UIA so that UIA could directly deal with all the existing and aspiring unit owners. UGT made UShs.319 million surplus from this project. Money was invested in EFC.
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2.1.5 Foundry
The Trust set up a foundry with the following objectives: To train small scale foundry operators; To provide practical training for the engineering students and To generate income for UGT.
The main purpose for the foundry and other UGT commercial enterprises was to make money for UGT and reduce its donor dependence. The foundry was engaged in casting of various metal/ alloys including Cast Iron, Aluminium, Bronze and brake blocks. The foundry was able to import crucibles from Germany for its own use as well as to sell to other foundry operators. Its main customers included: Uganda Railways Corporation, Uganda Clays Limited, Makerere University, Simba Blankets, Magadi Soda Ltd (Kenya).
Providing training and support to small scale foundry operators was a very different set of activities as compared to successful running of a commercial enterprise, competing in the market place with other small foundries. It was quite difficult for an NGO to run foundry as a commercial enterprise to compete with those in the informal sector. The foundry had to pay VAT but many informal foundries did not pay VAT. Foundry records were not kept as a separate cost/profit centre. Several attempts at improving performance were unsuccessful, the foundry was losing rather than making money, UGT decided to finally sell off the foundry in 2008 at UShs.14.52 million.
2.1.6 Garage
UGT set up a garage with mixed objectives which included: . To train small scale garage mechanics; To provide practical training for the engineering students and To generate income for UGT.
29 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 The Garage faced challenges. In addition, the garage had to buy many of reworked spare parts in cash and even struggled to recover its debts. After several attempts at improving performance, the garage was also losing rather than making money for UGT. A decision was made to divest from the garage. However since the garage was located on University land, the functioning garage was leased on a monthly rent of UShs1.5 million per month which was being paid to the UGT. Currently the Garage is still operating under private entity and pays monthly rent to the University. The garage continues to train students on internal ship from CEDAT and other universities within Kampala. Figure 6a shows the garage in operation while figure 6b shows motor vehicles waiting to be repaired.
Figure 5a: Makerere Garage Figure5b: Motors Vehicles for repair
2.1.7 Gatsby Uganda Limited (GUL)
Throughout the years, Gatsby Foundry and Gatsby Garage which began as demonstration units for students and Gatsby Club members grew into competitive commercial units. In order to consolidate these achievements and abide by the laws of the land, the units were incorporated into fully fledged business units under the umbrella of Gatsby Uganda Limited (GUL). Currently GUL is under the process of winding up once the remaining units at the Business Park are disposed of.
30 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 2.1.8 Hardware Shop GUL finalised a proposal to invest UShs.500 million in a retail hardware store in Mbarara Industrial area to sell hardware including quality tools, paint and cement. However when the industrial park was sold to UIA, the shop was shifted to Katwe, Kampala. Currently the shop is not operating.
2.1.9 Business Development Services (BDS)
The Trust did provide business development services. The BDS team did organise a quarterly training around specific topics in each club. Topics covered included marketing, record keeping, costing and how to manage money. UGT sponsored participation in a number of exhibitions/ trade fairs to enhance the exposure for entrepreneurs, foster business links and help expand their marketing outreach. Some of the exhibition/trade fairs UGT participated/organized included: East African Jua Kali Exhibition in Dar es Salaam, Tanzania (November 2003), and Mombasa, Kenya (November-December 2004) and November- December 2005; Eastern Regional Trade Fair at Mbale in May- June 2005; Gatsby Technology Exhibition, July 2005; Uganda International Trade Fair, October 2005.
Some of the successful entrepreneurs recognise the value of useful advice, market links or access to technology which helped them to leapfrog their growth and profitability. The perception of most members on utility of the BDS services was minimal. One of the successful enterprises which benefited from BDS is LEEM Electronics Ltd located in Katwe Industrial area currently manufacturing electronic equipments. Figure 5a shows a technician repairing a power stabilizer and figure 5b shows some of the products from LEEM Electronics Ltd.
31 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
Figure 6a: Power Stabilizer Figure 6b: LEEM Products (Solar Flat irons and solar kettles
LEEM Electronics has innovated Universal Grid and Solar Energy Hybrid (USH) machine. USH is a fully automatic machine (Set) which enables grid power (Hydro) and solar power to work concurrently i.e supplementing each other alternatively in phases but preferring solar to grid power which enables the user to conserve grid power up to 90%. Institutions are recommended to USH systems in order to get permanent or sustainable power solutions.
The Trust no longer carries out business development services which are very useful to enterprise development in Uganda.
2.1.10 Technology and Innovation
The then Faculty of Technology at Makerere University set up UGT to promote University-Industry co-operation and to enable SME entrepreneurs to access technological knowledge. This also provided opportunities to University staff members to have continuing outreach to community and enterprises, so that the Faculty is actively aware of and contributing to the challenges being faced by entrepreneurs and would not be perceived as an ivory tower (aloof from the real world).
The Innovations department was established to develop and disseminate appropriate technology in Uganda. Various activities were undertaken to promote technology and innovation:
32 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Supported around 20 final year students to undertake projects on specific technologies; Promising student projects were taken up for further development and commercialisation; 80 to 90 student placements in SSEs were facilitated every year for 6-10 weeks, so that entrepreneurs could get dedicated technical expertise to address specific technical issues while students get practical exposure. It was hoped that some of these students would also be attracted to set up enterprises rather than seek employment; Organized technology exhibitions to facilitate technology transfer and Developed new appropriate technology on demand driven basis.Some of the major prototypes developed include: Pineapple Juice extractor; Banana Juice Extractor; Paper Pulping Machine for banana paper production; Cereal Roaster; Portable Biomass Oven; Seed Planter; Aloe Vera gel extractor and Passion Fruit Juice Extractor among others.
One of the beneficiaries of technology transfer and innovation is SESACO Limited, a food processing company registered in 1987, based at Kyengera, a Kampala suburb. The firm was one of the Kampala Club members. It did benefit from the credit programmes of UGT with a loan of Shs.3m, BDS through training and trade exhibitions both within and outside the country and acquiring appropriate technology through linkages with UGT.
SESACO has for decades been turning the cereal into a multiplicity of consumable products. According to the company Managing Director Charles Nsubuga, the soy milk production technology was learnt through years of training at different soy development institutes and food producing companies in America.
33 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 The firm has had an innovative journey of producing up to nine soy products including; Soya millet, Soya cup, Mummies and Daddies (Bagiya), Brown butter, Soya nut, Brown sauce and Soy milk among others. Figure 7a shows technicians repairing the Machinery while figure 7b shows the soy products ready for market. The firm employs over 80 workers with a turnover of Shs. 1bn per annum. The director attributes that the success of SESACO is through the various initial services the company received from UGT.
Figure 7a: Technicians at Work Figure 7b: Products ready for Market
Trace studies need to be carried out on the success of the appropriate technologies and innovations developed by UGT. 2.1.11 Scholarships Programme
A scholarship fund was launched during 2004-05 with an objective to provide scholarships for able but needy students, who could not meet their education costs at the Faculty of Technology, Makerere University.1 Those students already admitted to the University but ineligible for government sponsorship were eligible to apply. The fund was also expected to increase the human resources available in the engineering field. Between 2004 and 2008, 64 students were awarded scholarship (average 16 per year). The first two batches of scholarship awardees completed courses and the last batch passed out in the year 2011. Eng Godfrey Ssali, a lecturer at CEDAT in Mechanical
1Criteria such as type of school attended, number of school going siblings, level of orphanage and socio-economic setting were used.
34 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Department, one of the beneficiaries of the scholarship programme, appreciates the need to sponsor students at higher Institutions of learning. Scholarships help poor students who qualify and cannot pay university fees. Eng.Ssali says most of the beneficiaries of the programme did complete their courses and are employed on different Institutions (both government and private).UGT scholarship programme was transparent as many students who applied for scholarships were awarded on merit. Eng Ssali proposes there is need for continuity of the programme with sustainability mechanism so that many needy students can benefit.
However, the challenges faced under the programme included delays in receiving and disbursing funds to students. Since the programme was not core to the UGT medium term objective, there was a decline in the performance of students and a decision was made to close the programme. 2.1.12 Tree Bio-technology Project
In the 1990s, GCF had financed a project for the transfer of clonal forestry technology from Mondi Forests of South Africa to Kenya through Kenya Gatsby Trust (KGT) and the Forestry Department. This project had been well implemented leading to a clonal nursery at Karura, Nairobi. In 2001, GCF financed an extension of the clonal forestry transfer to Uganda through National Forestry Resources Research Institute (NaFORRI), which established various trials which were not as successful due to management problems. In August 2005, UGT was invited to make a proposal for commercial production and distribution of the clonal planting material Gatsby club network. One of the links foreseen was that UGT would be able to leverage its club network to promote commercial take up of fast growing trees and many of the carpenters (who are club members) may be interested in securing future timber supplies. UGT submitted its proposal to Kilimo Trust which included: . Partnerships involving UGT, NaFORRI, National Forestry Authority (NFA) and Gatsby clubs;
35 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 . Target Planting Materials: fast growing Clonal eucalyptus which can produce an electricity pole in 4-5 years; . Adoption of tunnelling technology to reduce the cost of seedling production; . Target production and planting of 5 million seedlings in 3 years; . Timber products involving seedlings, building poles, firewood, fencing poles, electricity poles and timber; . A Tree Project Committee under UGT Board and UGT staff appointed for the project and . Research to be undertaken by NaFORRI.
Kilimo Trust was founded in 2005, based in Uganda and with financial support from GCF did seek to facilitate wealth creation and poverty reduction through agriculture and agri-business development in East Africa. Kilimo Trust commissioned a detailed evaluation of this project which was being simultaneously implemented in Kenya, Uganda and Tanzania and “Evaluation of the Tree Biotechnology Programme by Patrick Hardcastle and Julian Evans, April 2009” provided comprehensive coverage of the technical issues and specific recommendations, covering making available new technology, generate commercial opportunities, creating public goods, improve the environment and foster economic development.
The period 2006-2009, UGT did successfully overcome the initial technical and management challenges faced by NaFORRI during the period 2001-05. With UShs1.39 billion support from Gatsby Charitable Foundation through Kilimo trust and a loan of USD150,000 from Kilimo Trust, UGT established three regional nurseries with a capacity to produce 2 million planting material. 12 different clones were tested out of which 7 were promoted.
In 2009 funding from Kilimo Trust was stopped and expansion of the nurseries came to a halt.Despite the funding interruption, the programme still continued and GCF gave an interest free loan
36 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 of USD 150,000 in 2012/2013 to expand the production level and establish Uganda Tree Resources Ltd (UTRL) as the leader in the clonal eucalyptus plant producer. Figure 4a and 4b show plantlets which are ready for plantation at UTRL nursery, Kabanyolo.
Figure 8a: Watering the Plantlets Figure 8b: Plantlets ready for Plantation UTRL started commercializing clonal eucalyptus plants in 2008 under the direction of UGT with a production of 350.000 plants. In 2015 UTRL had a target of 1.5million plantlets as shown in table 3.This was anticipated to generate a profit of Shs.121m. There is high demand for the plantlets especially with Sawlog Production Grant Scheme (SPGS) an NGO planning to plant over 20,000 acres this year 2016.
Table 3: Output Performance for UTRL Item of measure FY 2014 FY Target YTD Actual 2015 [end of June 2015) 1 Production (units)(000) 1,402 1,551 773 2 Sales (units)(000) 1,348 1,550 606 3 Total revenue UGX (000) 654,785 759,529 314,578 4 Total direct costs UGX(000) 321,447 313,335 197,962 5 Total overhead costs 316,330 324,988 182,330 UGX(000) 6 Total costs UGX(000) 637,778 638,323 380,292 7 Surplus UGX(000) 17,007 121,206 -65,714 Source: UTRL records
Currently, UTRL faces a number of challenges which include: Inadequate staffing for the key positions and delay in establishment of the new nursery (Busika) green house, weak internal controls and possible fraud
37 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 among others. Research into new products of trees is limited. Customers complain of diseases attacking trees in their plantations which require frequent research for purpose of prevention. There is minimum provision of extension services to customers.
2.1.13 Entrepreneurs Financial Centre Ltd (EFC) Entrepreneurs Financial Centre (EFC Uganda Limited (MDI) is a relatively new microfinance institution in Uganda incorporated in the year 2011. It is among the fastest growing microfinance institutions in Uganda, licensed and supervised by the Bank of Uganda,
EFC is committed to contributing to the development of the country’s private sector by providing increased access to financial services for the underserved micro and small scale enterprise (MSE) market segment. EFC Uganda is driven by its mission of offering financial services to MSEs on a permanent and sustainable basis while contributing to wealth creation and poverty reduction.
EFC’s shareholders consist of a group of world renowned reputable organizations such as Développement international Desjardins (DID), which is a subsidiary of Desjardins Group (the leading financial cooperative group in Canada and sixth largest in the world), Afric Invest Financial Sector Limited (AFS), Bamboo Financial Inclusion Mauritius, the Belgian Investment Company for Developing Countries (BIO), ASN- Novib Microcredit Fund (managed by Triple Jump) and Uganda Gatsby Trust. As per 31st December 2015 the share distribution (Ordinary shares) was as shown in table 4:
Table: 4 EFC Share-Distribution Amount (UShs) Développement international Desjardins (DID) 3,102,343,750 AfricInvest Financial Sector Limited 2,241,406,250 Bamboo Financial Inclusion Mauritius 1,575,000,000
38 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Belgian Investment Company for Developing 1,406,250,000 Countries (BIO) ASN-Novib Microcredit Fund (ANMF) 1,125,000,000 Uganda Gatsby Trust (UGT) 1,125,000,000 Total 10,575,000,000 Source: Annual Report EFC Uganda Limited (MDI) 2015
The 2015 financial statement indicate that EFC received an annual income of UShs.5.1bn as compared to UShs.3.1bn for the previous year indicating growth in business.
UGT initial investment in EFC was worth Shs. 375m in 2011, followed by an additional Shs. 525m in 2012 and finally Shs. 225m in 2014/2015. After responding to capital calls from EFC, the shares currently are worth Shs1.125bn representing 11% of the total share capital. Though dividends are yet to be realized, the trustees are willing to buy more shares in the Institution. Investment in shares in EFC is mainly for purpose of sustainability and avoiding any business risks that UGT may face.
2.2 Projects Summary/Analysis
Uganda Gatsby Trust undertook a number of projects. Some of these projects were wound up completely, others are in the process of winding up and others are still active. Table 4 illustrates their current status and also shows opportunity for revival.
39 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
Table 5: Projects Status/UGT Performance Project Current Status Project Success Project Failures Opportunity Remarks for Revival Entrepreneur Clubs Non functional . By 2009 there were 1,084 members in . Poor Club’s Governance No They can easily be Gatsby Clubs) 21 clubs; and Management; traced . Each of the enterprise was employing . Inability for UGT to 5 to 10 workers; deliver to the members’ . Provided UGT with an outreach to expectations. 5,000 to 10,000 workers in the country.
GMFL (UGT Sold to Premier Agencies . In 2006, GMFL was formed with New . Faced both financial No Sold at a loss in Subsidiary) board and management team; and managerial 2015 . In 2006 Shs.200 million loan was challenges; disbursed; . Poor repayment of . In 2008 UGT/ GMFL forged a loans; partnership with MYC4; . Inaccurate record . UGT captured 17% of the MYC4 keeping for disbursed loans. global portfolio and 14% of all . Non supervision by businesses financed. Bank of Uganda but under AMFIU; Business Operating under GUL . Victoria Business Park was built on No No intention to re- Parks (BP) which is under- going 5 acre plot; . No failures cited open. liquidation . Plot was sold to an anchor tenant/ a) Business Park investor (Fruits of the Nile) and the Jinja proceeds from this sale were used to develop 13 business sheds and left some land for future development; . Project did cost UShs.375m and sales proceeds were UShs.527m b) Business Park . Project land was purchased by partly Mbarara Sold to UIA club members’; . No failures cited No Same as above . UGT successfully mobilised £150,000 GCF grant and £120,000 grant from a DFID; . UGT also succeeded in confirming UShs.1.09 billion loan sanctions from EADB; . UGT was paid UShs. 2.61 billion in 2008 for the park; . UIA directly paid off the EADB loan and accrued interest and the balance was handed over to UGT; . owners; . UGT made UShs.319 million surplus from this project. Money was invested in EFC.
40 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Foundry Foundry was sold off in . Foundry was sent up to make money . Being an NGO, Foundry No High competition 2008 at UShs.14.52 m. for UGT and reduce its donor faced stiff competition with the informal dependence; in the open market. sector. Not Viable . Foundry was engaged in casting of various metal; Garage Closed but operating under . UGT set up to train small scale Garage struggled to recover Yes UGT can reposes private entity and who pays garage mechanics; its debts; and revamp its rent to the Makerere . To provide practical training for the activity level University. engineering students and generate income;
Gatsby Uganda Under Liquidation Gatsby Foundry and Gatsby Garage which GUL is under the process of No Not Viable Limited (GUL) began as demonstration units for students winding up once the and Gatsby Club members were into fully remaining units at the fledged business units under the umbrella Business Park are disposed of Gatsby Uganda Limited (GUL). of
Hardware Shop Closed . GUL finalised a proposal to invest When the industrial park No Many micro UShs.500 million in a retail hardware was sold to UIA, the shop hardware shops in store in Mbarara Industrial area was shifted to Katwe, the town centres Kampala. Not viable. Business Non functional . UGT organised quarterly training No challenge cited Yes Organizing Development around specific topics in each club; business entities Services . Sponsored participation in through clusters and sign MOUs. exhibitions/trade fairs to enhance the exposure for entrepreneurs, foster business links and help expand their marketing outreach; . Entrepreneurs recognise the value of useful advice, market links or access to technology which helped them to leapfrog their growth and profitability. Technology & Non Functional . UGT Innovations department was No failures cited Yes Can be pursued for Innovation established to develop and revival, disseminate appropriate technology Trace studies are in Uganda; necessary. . Supported over 20 students to undertake projects on specific technologies; . Developed various new appropriate technology on demand driven basis; . Organized technology exhibitions to facilitate technology transfer; . 80 to 90 student placement in SSEs were facilitated every year for 6-10 weeks
41 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Scholarship Non functional . Scholarship fund was launched . Programme was not Yes Can revived and Programme during 2004-05 with an objective to core for the trust; offered to post provide scholarships for able but . Decline in the graduate students needy students; performance of . 64 students were awarded students and scholarship (average 16 per year); . The first two batches of scholarship awardees completed courses and the last batch passed out in the year 2011; Tree Bio- Operational . The period 2006-2009,with UShs1.39 . Inadequate staffing for Yes Re-organise Technology billion grant grant and $150,000 loan the key positions and management and Project (UTRL) fromfromKilimo trust, UGT . Delay in establishment of diversify the established three regional nurseries project. the new nursery (Busika) with a capacity to produce 2million planting material; green house; . Weak internal controls . 12 Different clones were tested out of and possible fraud among which 7 were promoted; others. . GCF gave an interest free loan . Research into new of USD.150,000 to UGT to expand the production level and establish products of trees is UTRL) as the leader in the clonal limited. eucalyptus plant producer. . In 2015 UTRL had a target of 1.5million plantlets’. This was anticipated to generate a profit of Shs.121m. EFC Operational . UGT initial Investment was Shs375m . No Dividends yet Yes Continue to in 2011 respond capital . Current Investment is Shs.1,125bn calls (11% of the total shares of EFC) . More shares to be bought
Source:UGT records
42 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 2.3 Current Principal Activities of UGT
The main business activity of UGT as per audited report for the year ending March 2015is the Investments in EFC and UTRL. The business activity is managed by a Secretariat which reports to the board of Trustees. For the year ending March 2015, UGT held investments interests in various entities as shown in table 5.
Table6:UGT Investments Entity Nature of Business Nature of UGT % control as Interest at 31st March 2015
Uganda Tree Commercial Tree Subsidiary 99% Resources Planting (Operational) Limited(UTRL)
Entrepreneurs Micro Finance Business Minority Share holder 11% Financial Operation Centre(EFC) Ltd GATSBY Uganda Managing Motor Vehicle Subsidiary 100% Limited garage, Metal Fabrication (Closed) foundry and business Parks
Source; Audited Accounts 2015
43 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 2.4 SWOT Analysis The SWOT analysis shown in table 6 highlights areas where UGT can leverage its strengths and opportunities as well as outlines the weaknesses and threats that UGT can mitigate through actions of its own or by working in collaboration with others. Table 7: SWOT Analysis STRENGTH WEAKNESSES
. Strong committed professional Board of trustees ; . None availability of Manuals, . Collaboration with Makerere guidelines and policies. University with Permanent . Limited staff to initiate and membership of the trust; write proposals for the trust . Visibility , goodwill and reputation; . No physical assets that the . Experience in dealing with SMEs; company can utilise for . Strong relations with Lending security; Institutions especially GCF; . Lack of effective Supervision of . Strong national and International Projects/activities Network of the UGT board members . Ability to carry out Research and Innovations; OPPORTUNITIES THREATS Government investment in youth livelihood programmes. High cost of doing business with Fast growing SME sector with high interest rates and a weak limited technologies and currency; innovations Availability of Institutions with High demand for appropriate similar Ideas and Services; Technology Non availability of resources Government focus on Promotion of both human and financial to science and Technology, BTVET, run the activities; enterprise development, SACCOs and skilling programme. Licensing of products developed by technology transfer project.
2.5 PESTEL Analysis - Business Environment Scan
In addition to SWOT analysis, an assessment to the environment in which UGT operates was undertaken using the PESTEL tool as outlined in table 8.
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Table 8: PESTEL Analysis . ISSUES STRATEGIC PLANNING IMPLICATIONS . Political Factors 1 . Government support to SMEs as a UGT should have Partnership strategies with mechanism for Job creation for the Institutions handling SMEs to offer training youth under youthLivelihood and transfer knowledge and technology Programme. 2 . Human resource base in technology Advocacy strategies to lobby the Government and research both public and private to involve UGT to support and provide sector is still inadequate. training and business development services to the Public and private Institutions 3 . Government continued increase in UGT needs to take advantage of improved public infrastructure investment infrastructure to increase production especially in energy roads and ICT. through technological transfer. 4 . Availability of natural resources UGT needs to provide appropriate technology especially minerals required to exploit the natural resources. 5 . Stable political environment UGT needs to take advantage of the existing stable political environment to disseminate its ideas to the public,e.g. tree planting 6 . Government increase in investment of UGT needs to take advantage of these industrial and business parks locations to offer appropriate technology to enterprises. . Economic Factors 1 . Increase demand of new technology for Opportunity to position UGT to be able to SMEs provide skilled training and support to new technologies adoption in the country 2 . Availability of tax incentives on UGT needs to take advantage of the current machinery being imported into the tax regime and exploit all opportunities country available 3 . High interest rates by commercial UGT needs to look for funds where interest banks rates are low and be able to increase the facilitation of business.to access low interest loans. 4 . Projected economic growth rate of 5.8% UGT needs to take advantage of this growth to create both forward and backward linkages. 5 . Credit availability for Small scale UGT needs to take advantage of the current Enterprises supply of credit and transfer appropriate technology 7 . High exchange rates for foreign UGT needs to have roper planning when currency developing appropriate technology; They need to transfer technology which can be exported to the regions and outside world. 9 . Uganda’s per capita income of USD788 UGT needs to take advantage of this high and projected to be USD1,039 in 2020 per capita income and be able to transfer technology and develop skills for the population especially the youth . Social Factors 1 . Lack of standardized curriculum Strategies to conduct continuous market responsive to the rapidly changing assessment to understand industry needs demands of the emerging new and design appropriate training programmes technologies in the SMEs and large to provide required human resources scale industries,
45 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 2 . High skills gap in the country both in UGT needs to take advantage of this to formal and informal sectors. Intake in reduce the skills gap. BTVET institutions is very low 3 . High population growth rate especially UGT needs to take advantage of abundant the Youth who are 50% of the labour supply to transfer technology and population of 34million. Youth develop skills especially for the youth. unemployment is at 78%. 4 . High demand for imported products as UGT need to focus on quality of the compared to products locally produced technology developed to penetrate and sustain market supply 5 . Uganda Literacy level is at 73% which UGT needs to take advantage of this high is high. level of literacy and inform the population on what technology is available. . Technical Factors . Low technology adoption in the UGT needs to concentrate of passing country. knowledge toward technology adoption. 1 . Low capacity and investment in Explore opportunities for development of technology research and innovation by strategic partnerships for Research and government and private development in the sector 2 . Poor coordination and guidance on UGT needs to explore this opportunity and research and development in Uganda provide the appropriate guidance. 3 . Access to new technology especially ICT UGT needs to take advantage of this modern technology to increase their outreach to enterprise in the country. 4 . Availability of Mobile technology such as UGT needs to adopt the modern mobile mobile money transactions and banking technology to ease transaction with different stakeholders 5 . Rudimental technology in the informal UGT needs to carry out research on their sectors such as garages , milling improvement so that they are able to improve on their efficiency levels. 8 . Emergency of new technology especially UGT needs to be aware on the new for small scale enterprises. technologies and be able to proliferate them to the respective enterprises. . Legal Factors 1 . The country still has a very weak Explore opportunities for development of legislation pertaining to Intellectual strategic partnerships with government to Property Rights. respond to the legislative/standard challenges 2 . Weak legal and regulatory framework to UGT needs to pursue with the government respond to STI. on ways of strengthen the legal and regulatory framework, 3 . Low registration of Patent rights UGT needs to partner with government and through Innovations. Currently it is as 3 work out modalities of improving on getting per year. patent through innovations 4 . Improvement of registration of business UGT needs to utilize this opportunity and enterprises through Uganda facilitate enterprises to have their business Registration Service Bureau formally registered. . Environmental Factors
1 . Emergence of technological-waste UGT needs to develop training programmes disposal as an emerging environment and services for technological waste disposal issue management 2 . Availability of regulation regarding UGT needs to comply with the existing laws environmental protection by carrying out EIAfor its activities to avoid destruction of the natural environment.
46 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
2.6 Financial Situation As per the draft Audit report ending 31st March 2015, the Trust has financial assets amounting to UShs.1,418,671,000 shown in table 9.
Table9: Financial Assets Financial Assets Equity Bank Deposits Total UShs’000 investments UShs’ 000 (UShs’000) At 1 April 2014 2,322,100 10 2,322,110 Additions 225,000 - 225,000 Exit of Shore cap (128,429) - (128,429) Investment Investment written- (1,000,000) - (1,000,000) off (GMFL) At31March 2015 1,418,671 10 1,418,681 Source: Draft Audited Accounts year endingMarch2015
The equity Investments amounting to Shs.1, 418,681million is made up of Shs.283million Investments in Gatsby Uganda Limited, UShs. 1.125 billion Investment in EFC limited and UShs. 10million investment in Uganda Tree resources Limited.
The additional of Shs.225 million to investment in EFC was are a response to EFC’s capital call. The funds invested in EFC are part of the final dividend received from the Shore cap investment and sale of property in Njeri Park. UShs. 128 million represents the book value of the shore cap investment that was liquated during the year. Bank deposits of Shs.10,000 represents the balance of endowment fund deposited with the Bank of New York Europe Limited.
47 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 The Shs.1,000 million write off relates to the equity Investment in GMFL which was disposed of in July 2015. The disposal process had not been completed at the date of these financial statements; however, management estimates that the disposal process may be concluded in a net liability position.
The Trust has two operating bank accounts with Standard chartered Bank- Uganda (dollar and shilling accounts)
In terms of Business Networks and Memorandum of Understandings, the Trust has no current business networks and MOUs. There is urgent need for UGT to re-establish its business links if it is to realize its new strategic objectives.
48 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 3.0 STRATEGIC DIRECTION (2016-2021)
3.1 High Level Statements Out of the analysis done during the Strategic planning process, it was necessary to review and revise the Vision and Mission of UGT as to be responsive to a changing environment due to global effects and influences in the development arena.
Vision For the next five years the Vision for UGT is: “To become the Leading Provider of Appropriate Technology, technology Innovations and Research to Enterprises in Uganda and beyond”
Mission The Mission for UGT for the next five years is: “To enable competitiveness and growth of Enterprises through transfer of Appropriate Technology Innovations and Research outputs, Incubation, Supporting Students Internship and Skills Development”
Core Values Core values are fundamental beliefs of an organization which define the code of conduct, standards of behaviour and provide ethical guidelines for decision-making. In this process UGT reflected on our core values and decided we need a renewed core value base with a brief explanation of each as shown in Table 9.
49 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Table 10: UGT Core Values Our Core Values What We mean Competitiveness, We believe in continuous improvement, promote and Innovation and creativity reward creativity, innovations and adaption of new emerging ideas especially in technology. Honesty and Integrity We are honest and adhere to moral and ethical principles. Team work We embrace togetherness, sharing ideas and learning from each other. We combine resources, competences, skills and work as a team in pursuit of our Vision. Social Responsibility and We are committed to social responsibility and believe in Independence promoting a culture of independence rather than dependence Trustworthiness We are dependable and reliable and conduct ourselves in a way that elicits confidence; Diversity WE embrace and nature individual contributions and ideas to build a strong and sustainable Trust.
3.2 Strategy and Strategic Objectives
3.2.1 New thematic areas of focus In the process of strengthening her activities UGT has identified the following areas of focus for the next five years: . Strengthen the existing Enterprises , Investments and actively participate in Climate Change Activities . Promote market led Enterprise Development through Innovations, Incubations and Public Private Partnerships (PPPs)/linkages; . Leverage relationship between UGT and Makerere University in order to achieve the intended UGT outcomes–Enterprise Development, Youth employment/empowerment, Research, Skills Development and partnerships; . Reposition UGT as a think tank for policy intervention/engagement and a platform for Enterprise Development alternatives; . Strengthen the UGT secretariat.
50 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 3.2.2 Strategic Objectives UGT has formulated its new strategic objectives to guide its operations in the five years. These are presented in table 11.
51 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Table 11: Strategic Objectives Area of focus One: Strengthen the existing enterprises, investments and actively participate in mitigation and adaptation to Climate Change Activities. Performance Implementation Time-Lines Strategic Key Activities Key Performance Targets Objectives Indicators 2016 2017 2018 2019 2020 /17 /18 /19 /20 /21
1(a) Expand UTRL . Expand on the . Number of acreage of . 600 hectares Project Activities. acreage of land land owned purchased/le owned by UGT ased per year . Expand the . Number of hectares of 300 hectares acreage of mother mother gardens and gardens and nursery nursery for production of planting materials . Establish . Hectares of . 300 hectares commercial tree commercial tree plantations. plantations planted and managed . Participate in . Number of research At least two research and projects and outputs research development of on planting materials projects per appropriate tree . Amount of investment year planting materials in tree research& UGX 100 development. million Number of tree invested in species improved forestry R&D through research. per year At least two species per year . Support Number of students 20 students industrial training supported in per year for students industrial training studying forestry
52 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 and technology innovations . Contribute to . Number of policy and At least two government policy advocacy forums forums per on forestry by participated in. year. participating in policy dialogue and advocacy . Participating in . No of network events At least two networks that participated in network promote events sustainable forest participation. and tree resources management, Conservation and use. 1(b) Contribute to . Supply of quality . Number of seedlings climate change seedlings and and other tree adaptation and other tree planting planting materials mitigation through materials fruit supplied. best practices in trees inclusive. . Types of fruit trees . Two types of forest and tree integrated in farming fruits resources systems and home technology and gardens; innovations . Develop . No of technologies . Two technology and and innovations technology innovations for developed; innovations adaptation to and per year mitigation of Climate effects . Create a platform . Number of research . Two research for research & projects on tree projects per development on resources and year. tree resources and climate change climate change adaptation and mitigation;
53 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 . Participate in . Number of policy Two policy policy dialogues on dialogues and dialogues tree resources, engagements every year technology
innovations and climate change; . Participate in . Number of groups . Four groups environmental sensitized/trained on per year sensitization and environment training in conservation& environmental nursery management conservation, . Number of target . Four groups nursery bed groups participating per year establishment and in greening activities management . Supply of inputs . Quantity of for trees/forestry tree/forestry and and agriculture. agriculture inputs supplied. . Collaborate and . Number of MOUs Two MOUs work in signed with partner per year partnership with institutions engaged institutions in climate change engaged in climate mitigation and change mitigation environment and environment protection. protection Area of focus two: Promote Market led Enterprise Development through Innovations and Public Private Partnerships (PPPs)/linkages: 2(a) Promote demand . Support demand . No. of demand driven . Two driven technology driven technology Programme programmes programmes to programmes for supported; per year Promote enterprise enterprises in Development collaborations . Offer Support . Number of associates . Two with Makerere services to collaborated with; University and . Contribution to PPPs/Innovations . Two other research issues of policy and
skills development.
54 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 organisations . Number of successful . Five and Institutions. enterprises from collaborations
. Position UGT in . Engagements with . Two issues of science NCST and Ministry of Engagements IST and technology every year . Linkages with experienced resource personnel/associates and Ex-Trustees. Area of focus three: Leverage relationship between UGT and Makerere University and other Institutions in order to achieve intended UGT outcome areas–Enterprise Development, Youth employment/empowerment, Research and Skills Development. 3(a) To facilitate the . Support appropriate . Number of Five transfer of technology based on appropriate appropriate demand driven in technologies technology to collaboration with transferred to enterprises in Makerere collaboration University; enterprises; with Makerere . Number of University and exhibitions, Two other Seminars and Do Institutions. Workshops held’ . Visibility of UGT activities. . Number of Technology needs Five assessment carried out; 3(b) To enhance . Provide support to Students intern student’s who . Number of students 20 students ship and skills undertake research supported; development on specific . No of internship 20 programmes. technologies; opportunities offered opportunities to students
55 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 . Number of Skills Five based programmes supported Area of focus four: Reposition UGT as a think tank for policy intervention/engagement and a platform for Enterprise Development alternatives 4(a) To reposition . Undertake Research . Volume of activities UGT as a think and disseminate related to research tank – an research outputs. and innovations; organization that supports . No. of MOUs and Two MOUs research and agreements signed per year advocacy in with enterprises and forestry and research institutions; technology. . No of international Two PPP partnerships/collabo agreements rations/ per year networks/linkages in research activities. . Number of Research Five research and Innovation and programmes Innovations developed and programmed implemented developed. . Develop policy . Policy guidelines for framework/ research and guidelines for innovations adopted. research and innovations; . Create a fund for . Operating research research and Fund in Place with US$20,000 innovations: guidelines. per year
Area of focus area Five:UGTSecretariat 5(a) To strengthen Re-establishment of UGT . Technical Advisor UGT Secretariat ; office at appointed
56 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 MakerereUniversity . Office established at main campus and field centres;
. Office equipments purchased. . No of staff appointed . Visibility of UGT at Makerere
. No of Ex Trustees approached; . No of honorary appointments made;
. Availability of manuals and guidelines . Operationalisationof approved organisation structure
57 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 4.0 FINANCING THE STRATEGIC PLAN
4.1 Funding Sources
Uganda Gatsby Trust activities were initially funded by Gatsby Charitable Foundation of United Kingdom whose settler is Lord David Sainsbury. Over twenty years, GCF extended funding to UGT worth two million five hundred thousand pounds only. This was supplemented by income from membership fees paid by SMEs to access services, business ventures such as the foundry, motor vehicle garage, industrial parks and grants from other agencies. UGT also borrowed funds from financial institutions for lending to SMEs.
Uganda Gatsby Trust will need adequate, timely and reliable funding in order to implement this Strategic Plan 2016-2021. Successful implementation of this Strategic Plan will require both substantive human and financial resources.
This Plan has identified capital and operating costs and projected them over the five year Strategic Plan schedule from 2016/17 to 2020/21as shown in Annex 2.
UGT will endeavour to attract funding partners and to facilitate timely and reliable funding by developing a comprehensive resource mobilization plan, adapting appropriate reporting mechanisms, developing and submitting timely work plans and budgets.
UGT will also ensure timely and regular audit of all activities, systems and procedures; production of timely accountability reports.
58 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 The Strategic Plan envisages that UGT will get its funding from sources shown in table 12. Table 12: Sources of Funding Source Description Expected Year Amount (UShs) Grants and . UGT needs to mobilize for grants Guarantees; and Guarantees from 400,000,000 2017 government and donors. Professional . UGT will render professional Fees services where fees will be 100,000,000 2017 charged to clients. Technology, . UGT expects to generate income Research from sales of its technology, and research and innovation outputs. 50,000,000 2017 Innovation The sales proceeds will be used Outputs for other further technology innovations Fixed . Any Extra funds need not to be 2018 Deposit held on account but fixed for 10,000,000 interest earning. Dividends . UGT expects dividends from its 20,000,000 2018 subsidiaries
4.2 Proposed Governance and Management Structure
Uganda Gatsby Trust is an organization that has laid firm foundation based on professional reputation of the members of the board of Trustees and therefore it needs to have good governance and management structures. While financial accountability to all key stakeholders is imperative, there is a moral obligation to ensure transparent, accountable and cost-effective use of resources. UGT believes it has the governance and management structures to carry on with its work even at an expanded level. UGT is headed by a Board of Trustee Members whose main function is policy formulation and decision-making for the Trust. It provides overall governance, policy guidance and direction to the Trust. It is further responsible for monitoring and evaluating the secretariat to ensure that
59 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 the set plans are implemented in accordance to the UGT set standards and core values. The board ensures that UGT establishes a sustainability plan through resource mobilization. In order to enhance its strategic initiatives, this Strategic Plan proposes an incorporation of a Technical Advisor (TA) who will work under the UGT Secretariat. The roles of the TA will include:
. Writing technical proposal for UGT projects; . Advising the board of UGT technical matters; . Co-ordinating Research and innovations outputs of the Trust; . Co-ordinating with different stakeholders on technical matters on behalf of the Trust; . Ensure that there is timely availability of funds for research, innovations
and other approved activities; . Ensure that patents rights for innovations are acquired; . Ensure that periodic reports are submitted timely to the stakeholders.
Figure 9 presents the proposed Organization Structure that will facilitate achievement of UGT’s Vision during this planning period.
Board of Trustee (BOTs) with Finance and audit committees
UGT Secretariat Technical desk (Management ) (Technical Advisor)
Consulting Subsidiaries
UTRL EFC GUL Others e.g.SPV
.gee.g Figure 9: Management Structure
60 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 5.0 IMPLEMENTATION PLAN/LOGICAL FRAMEWORK
5.1 Strategic Roadmap
Uganda Gatsby Trust model of implementation shall be guided by a series of strategic initiatives/actions supported with deliberate efforts and commitment by the Trustees and Management during this five year planning horizon.
Year 1- The strategic emphasis shall be on implementing basic structures, processes and systems and subsequently re-engineering business tactics, processes, systems and service delivery structures.
The following are some of the activities to be carried out: Resource office facilities at Makerere main campus and at field centres; Resource Technical Advisor/Resource Mobilizer; Equipping office and the secretariat; Recruitment of key technical personnel for the secretariat; Rebranding UGT Secretariat; Relationship building activities/engagements with exe-Trustees (to tap into their expertise and wealth of knowledge) Create honorary appointments and network platform for ex Trustees ; Set up Operational manuals and guidelines;
Adoption of the of the organization structure ; Resource mobilization (human and financial)); Setting up work plans for UGT; Internal review workshop and meetings; Identifying Land for tree planting;
61 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Review of relevant documents i.e. human resources manual, legal documents and MOUs; Defining a simple business process (how work is going to be done), develop policy guidelines, internal controls systems, control and reporting mechanisms, put in place measures to ensure efficiency and effectiveness, rebranding UGTamong others; Develop research, innovation, incubation and skill development programmes and Years 2-3: This period will focus on rolling out strategic initiatives and interventions. Years 3-5: The strategic emphasis shall be on attaining sustainable growth and pursuing un- implemented initiatives as outlined under this strategic plan
Year 5 Years 3-4 Completion of Sustainable Initiatives Growth Yrs 2-3 Rolling out Strategic initiatives
Yr 1 Setting basic Structures
Figure 10: Graphical Analysis of the Series of Strategic Emphasis of UGT Implementation Model
62 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
6.0 MONITORING AND EVALUATION
6.1 Monitoring and Evaluation Framework Adequate monitoring and evaluation will assist UGT to achieve the following:
o Track the realization of outcomes from the defined strategies and Initiatives over this strategic planning period; o Ascertain whether resources ear marked for the implementation of the Initiatives suffice and are delivering the desired outcomes; o Assess whether the expected outcomes from the strategies are being realized from the implementation process; o Establish whether there are any un-anticipated challenges that might have cropped up and seek ways of how best to address them; o Ascertain whether the UGT capacity in terms of facilities, logistics, human resources and financial resources are adequate to enable realization of the Vision, Mission and Strategic objectives
In the course of implementation of this Strategic Plan, monitoring and evaluation shall be done at three levels. At level one, the monitoring and evaluation shall be on implementation of strategic initiatives on quarterly and annual basis, based on set targets and performance measures. At level two, the monitoring and evaluation shall be on the progress of implementation of strategic objectives on an annual basis and the final evaluation shall be at the end of the five year strategic plan cycle.
6.2 Risk Management
Risks need to be identified, evaluated, and managed throughout this Strategic Plan period 2016-2021. Management of risks under this Strategic plan requires the Board of Trustees to proactively address potential obstacles that may hinder the plan’s success, as well as take advantage of opportunities to enhance success or save costs. Under this
63 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Strategic Plan, there are a number of risks that may limit the achievement of the set strategic objectives. The focus of this plan is on known risks which can be mitigated by allocation to one of the involved stakeholders/parties as well as by other methods such as insurance and adequate planning. From situation analysis, the general risk areas include: Lack of funds on a timely manner to undertake the planned activities; Potential loss of the expansive vacant land to alternative land use by Makerere University other than for expansion of the UTRL tree expansion project, before the latter planned action is implemented and Lack of Human resource capacity to implement the strategic initiatives by UGT. Other risk areas that may affect the success of this Strategic Plan and their mitigation measures are shown in table 13.
64 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
Table 13: Risk Assessment and Analysis Matrix No Categories Description of Risk Mitigation of Risk 1 Cost overrun risk The possibility that during the . Proper budgeting and recourse operation actual project costs mobilisation. will exceed projected costs. 2 Environmental risk The possibility of liability for . Thorough due diligence by UGT. losses caused by environmental . Identified pre-transfer damage arising (i) from environmental contamination as a operating activities (UTRL) specific projects deliverable. . Independent monitoring of activities.
3 Exchange rate risk The possibility that exchange Hedging instruments (e.g. swaps). rate fluctuations will impact on the envisaged costs of inputs required for operations phase of the projects. 4 Force Majeure risks The possibility of the occurrence . Define “Force Majeure” narrowly to of certain unexpected events exclude risks that can be insured that are beyond the control of against and that are dealt with more UGT (whether natural or “man- adequately by other mechanisms. made”), which may affect the execution of UGT strategic initiatives or operation of the projects.
5 Inflation risk Possibility that the actual . Keep up abreast with inflation in inflation rate will exceed the costing budgeting and expenditures. projected inflation rate. This risk is more apparent during the operations phase of the projects. 6 Interest rate risk These are factors affecting the . Hedging instruments (e.g. swaps). availability and cost of funds. . Fixed rate loans/SWAPS. 7 Maintenance risk The possibility that (i) the cost of . Adequate O&M measures maintaining assets in the required condition may vary from the projected maintenance costs, or (ii) maintenance is not carried out. 8 Market, demand or The possibility that the demand . continues market research and volume risk for the products, innovation and effort for the products, innovations services offered by UGT may be and services; less than projected. (whether for example because the need for the services ceases or decreases), Or Because of competitors entering into the relevant market,
65 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 9 Political risk The possibility of (i) . Having clear Laws governing UGT unforeseeable conduct by UGT or by any other government authority that materially and adversely affects the expected outcomes. 10 Regulatory risk The possibility that Consents . UGT in all its transactions should be required from Government legally compliant and need to clarify authorities will not be obtained its legal existence and its mandate. or, if obtained, can only be implemented at a greater cost than originally projected 11 Technology risk The possibility that (i) the . UGT keeps abreast with technology technology innovations may not changes and innovations and attract market demand. Or (ii) development technological improvements may render these technology innovations out-of-date (“technology refresh or obsolescence risk”).
6.3 Critical Success Factors The following interventions are a prerequisite for successful implementation of this Strategic Plan:
a) Strategic leadership; b) Commitment from the Board of Trustees and Management;
c) Regular monitoring and evaluation of the Strategic and Business Plans
d) Effective control of UGT’s expenditure; e) Adherence to internal standard operating procedures and work processes; f) Effective Ex Trustees Participation; g) Proper Operational Planning, allocation and utilization of resources; h) Availability of adequate financial resources;
66 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Annex 1: Persons Contacted
1. Eng. Dr.B. M. Kiggundu Chairman /Permanent Trustee 2. Mrs. Irene Mutumba Permanent Trustee 3. Prof; Henry Alinaitwe Member of the Board 4. Arch. Dr.B. Nawangwe Member of the Board 5. Mr. Patrick Banya Member of the Board 6. Mrs. Jacqueline. B.Lutaya Secretary to the Board 7. Dr. W.S. Kalema Advisor to the Board 8. Mr. Tom R.Rujumba Kampala Accountancy Bureau 9. Prof. Musazzi Innovation Department ( CEDAT) 10. Mrs. NamusisiTheresa MD Ledo Uganda LimitedJinja 11. Prof. Joseph Byaruhanga Former General Manager of UGT 12. Mrs. HasifaMukyala Project Officer (CEDAT) 13. Mr. Joseph Guloba Finance & Administrative Manager UTRL 14. Mr. Lwanga Charles MD-LEEM Electronics Ltd Katwe 15. Mr. Godfrey Ssali Lecturer CEDAT 16. Mr. Charles Nsubuga SESACO Limited 17. Mr. Peter Luyima Manager-MakerereUniversity Garage 18. Prof. John Baptist Kirabira Senior lecturer CEDAT
67 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021 Annex 2: Capital and Operating Expenditure Projections
Assumptions
Capital Expenditure 1. There will be two capital calls from EFC in FYE2017 and FYE2018. UGT will have to source for funds to meet these calls. Operating Expenditures 2. Consultancy. The trust expects to spend Shs 2.5m per month on Consultancy. 3. A total of three (4) board meetings are expected to be held during the year. (i.e. 3 BOT and 1 BAC.); 4. Audit fees are assumed to remain fixed at USD 2,500 up to 2021; 5. A provision for surveying and title subdivision fees of Ugx.10 million has-been made to complete the surveying and titles of Njeru land. New titles will be in the names of UGT. We shall recover all these incidental fees upon sale of the units and residual Land; 6. A provision for retainer fees of Ugx.3 million has been made for Technical Advisor for UGT; 7. Office expenses: The Secretariat expects to incur at least Ugx.1m on printing, Stationery, transport/conveyances fees and other minor expenses every month
68 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021
69 Strategic Plan for Uganda Gatsby Trust for the year 2016 to 2021