PSFU enhancing Lead Firm Structure for youth employment in Uganda

The Private Sector Foundation Uganda (PSFU) is partnering with the Mastercard Foundation to anchor the Young Africa Works strategy in Uganda.

Under the Young Africa Works strategy by Mastercard Foundation, PSFU has designed and will implement the Lead Firm Structure for Youth Employment.

The Intervention’s ultimate goal is to create dignified and fulfilling work for young women and men and contribute to the effort to see Ugandans prosper.

The intervention focuses on creating, maintaining and sustaining growth in job markets through strengthening the capacity of actors to efficiently produce and sell their goods and services in expanded markets, developing new diversified financing mechanisms as well as growing the capacity of business leaders and their support service providers to manage and expand their enterprises.

This transformative intervention will also transition Micro Enterprises to Small Enterprises.

What is PSFU’s Lead Firm Structure?

PSFU developed the Lead Firm Structure approach to enhance linkages within the productive sectors by ensuring market focused production which is based on the requirements of a Lead Firm.

This approach responds to capacity (production and productivity) and market access challenges that currently constrain households and MSMEs survival and growth opportunities. Identifying, expanding and linking to markets will create possibilities to increase production, address productivity challenges, and thus increase investment and job growth across Uganda.

The Lead Firm Structure approach will be implemented in selected high growth sectors which include:

• Agriculture

• Manufacturing

• Trade and Allied Services

• Tourism

• Construction.

What is the role of the Lead Firm in this intervention?

The Lead Firm will;

• In conjunction with PSFU, co-create the intervention to be implemented for the Lead Firm Structure.

• Provide the primary market for the output of households and MSMEs in the Lead Firm Structure.

• Provide guidance on the quality and standards expected for raw materials to be supplied to the Lead Firm.

• Recommend suppliers of inputs or provide those inputs.

• Develop a database of the Lead Firm Structure value chain actors and provide necessary reference whenever required. This is applicable for instance in issues of securing financing, insurance and other goods and services.

• Provide necessary evidence, data and technical knowhow needed to build policy options and participate in needed advocacy activities.

• Provide technical guidance and knowledge to inform the technical skilling and upskilling of participants in the Lead Firm Structure.

• Vet and coordinate with Community Based Organisations/PSFU members who shall mobilise households and MSME to participate in the Lead Firm Structure.

• Participate and assist PSFU in reviewing the performance of service providers in the Lead Firm Structure.

• Provide opportunity for feedback, learnings and advice crucial to ensure success of the intervention.

How will the intervention lead to the development of the private sector?

The intervention will lead to business growth through;

• Improved Lead Firm productivity and competitiveness.

• Increased market entry and performance by MSMEs and households.

• Increased income for households.

• Increased demand for goods and services.

• Easing access to finance for households, MSMEs and Lead Firms.

• Developing and demonstrating a sustainable household economic activity through a four-product model that several households will adopt and implement thus spreading the benefit of more revenue which will increase effective demand.

What interventions will PSFU offer the participating Lead Firms?

A package of interventions has been identified to contribute to the functioning of the Lead Firm Structure including:

• Improving the technical and entrepreneurship capacity of households to increase and improve production under guidance of the Lead Firm so as to meet quality and quantity requirements of inputs.

• Increasing capacity of MSMEs and Lead Firms to improve production and production efficiency to take advantage of growth in effective demand.

• Improving the technical and entrepreneurship capacity of households to increase and improve production under guidance of the Lead Firm so as to meet quality and quantity requirements of inputs.

• Increasing capacity of MSMEs and Lead Firms to improve production and production efficiency to take advantage of growth in effective demand.

• Increasing capacity of Lead Firms to access additional markets that can absorb increased production from households and MSMEs.

• Increasing management and technical capacity of MSME & Lead Firm owners and business leaders in the Lead Firm Structure.

• Addressing ecosystem policy challenges to ensure a business-friendly environment for investment and reinvestment for continued growth.

How will the participating Lead Firms benefit?

The key benefit of the Lead Firm Structure approach is to optimise linkages for mutual benefit of value chain actors such as increased growth and incomes. Additional benefits under the PSFU Lead Firm Structure intervention for the Lead Firm include:

• Policy Advocacy and Engagement.

• Expansion of Lead Firm supply chain.

• Capacity Building.

• Contributing to growth of incomes of households.

What is a Lead Firm?

A Lead Firm can either be an organisation driven by private interests such as profit or whose purpose is furthering shared prosperity through promotion of private enterprise/business.

Lead Firms will be PSFU members that own or control leading products and or enjoy significant market share and growth with demonstrated need to expand operations.

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