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Doing Business in Uganda, (Challenges, common practices, risks and potential rewards of being a multinational enterprise operating in Uganda)

Dr. Ian gave his journey to Uganda. He first went to Uganda in 1998 with a church missionary society. He founded a mission hospital in Kiwoko Luwero district in 1991.

He then moved to Kampala in 1991 and founded international medical centre. For over 20 years, this had grown to international medical group with a hospital, 22 clinics, health insurance company and employs over 800 people.

The International Medical Hospital was the first major international hospital in Uganda situated at Namuwongo with one hundred hospital beds. Mainly it delivers tertially care in the areas of keyhole surgery, neurosurgery, neonatology and mainly targeting the middle class and corporate clients.

The second company founded by Dr. Ian was IAA Insurance Company with 54,000 members with a yearly average premium of $200 per person per year which makes it the largest health insurance company in Uganda. It functions as a health maintenance organisation and mainly uses own facilities of the international hospital Kampala and the International Medical Centres.

The international medical centre has 22 clinics scattered all over Uganda. They offer primary care including laboratory investigations, dental and sonography.

Commenting on his experience in the private sector over the last 20 years. Dr. Ian said that he started the group as a sole ownership selling his professional services, then next phase as a small business where he was controlling everything including his 159 employees.

Phase three he got into corporate governance which required transparency, audit, separation of functions, a board with independent directors and then quality and ISO certification.

Phase four is when he took in private equity partners which increased the level of scrutiny, audit, corporate governance, more emphasis on budget, quarterly reporting. The private equity partners never interfered in quality of services either in technical delivery. As a Ugandan local investor, the experience of private equity partnership was positive and good as it helped to grow the business.

Phase five is when he moved from a majority shareholder to a minority shareholder, he stayed as a chairman, a transition that caused some drift and he endeavoured to retain the position to enforce continuity and stability of the business.

He stressed that he wanted a strategic partner who could preserve the legacy of the company.
The decision also freed him to be able to diversify into other investment.

Dr. Ian worked in the Aid/NGO sector in Kiwoko hospital, in the public sector as mayor of Makindye Division a suburb of Kampala city and in the private sector in the international Medical Group and Clarke Group.

Dr. Ian was driven by sustainable development with social impact. He further said that Uganda cannot develop on Aid alone.

Clarke group was now involved in agri-business, education and affordable housing.

Clarke Group bought 1500 acres in the western part of Uganda with long, medium and short term return crops which include clonal eucalyptus, coffee, maize and eggs. The maize was used as feeding for the chicken.

Agri-business investment was capital intensive, with lots of challenge but with good prospects due to its high demanded products.

Uganda had one of the fastest population growth rates in the world with a rich resource of young people, but unless they were educated for employment they were jobless youth on the street.
Clarke Group Education with to impact the education system to change it from information and theoretical, to student centred and practical.

The group moto was “Inquire, discover and learn”.

International health Sciences University would now expand into a business school and applied technology with an emphasis of developing practical business skills.

The University had trained health professionals in nursing, clinical officers, lab technicians and public health officers. The University was active in research.

The Junior Clarke School invested in primary education under the Uganda system, using international teaching methods. It was aimed at Uganda middle class and demonstration school for modern teaching methods.

The school was s developed to transform Uganda teaching methods which were centred on the old British method of chalk and talk methodology.

Finally, as an investment the group was promoting an investment opportunity to setup a factory to make affordable housing using structured insulated panels. This would reduce the cost of housing and increase the speed at which houses were built to just under 18 days for an ordinary house. The house provided cooler.

There was bureaucracy and corruption but there were also good people who wanted to see Uganda move forward.

Dr. Ian lastly said that to be able to succeed in Uganda, one needed to be realistic and the right partner. However, Uganda laws allowed foreigners to do business and were welcoming.

He welcomes everybody to Uganda.

It is a great pleasure to be here with you all for the 5^th Uganda – UK Investment Convention. I bear the warm greetings of Ssabassajja Kabaka and the people of Buganda, on whose behalf I stand here today.

I would like to start off by thanking the organizers for this splendid arrangement bringing together people from all walks of life to discuss investment in Uganda and for choosing a theme that resonates closely with our hearts.

We have all heard and read growth statistics, which mean a lot to macro-economists and scholars but do not always help us understand whether ordinary people are actually becoming happier and more prosperous.

I do not intend to get into a detailed analysis of the gap between the statistics and the perception of ordinary people. I am sure that there are several experts who will be doing that. Rather, I want to applaud the organizers for their insight into the fact that growth statistics only give a two dimensional view of the effect of investment on our society.

If growth is to be truly meaningful and sustainable, all of the people must buy into that growth. For growth to be meaningful and sustainable all people must feel that the growth brings them a direct benefit in the form of prosperity.

When I say “all of the people” I mean women as well as the men across all the strata of society. This is why I am especially pleased about having been asked to speak to you about the role of Ugandan women in achieving sustainable development.

I would like to approach this topic from the perspective of the Buganda Kingdom; to make the argument that the marriage of ancient and modern can both engender and entrench the role of Ugandan women in achieving sustainable development.

For the benefit of the few who are not familiar with our history, Buganda is an ancient Bantu Kingdom, under a King called the Kabaka, located on the Northern and North Eastern shores of Lake Victoria. Buganda, as we know it today, was established by Ssekabaka Kintu upon a foundation of smaller chieftaincies in or about the 12^th Century AD.

Buganda’s location at the Source of the Nile caused it to become a destination for European explorers a focal point of the Scramble for Africa in the 19^th Century. The explorers were followed by Christian missionaries, who, in turn, were followed by British imperial agents.

The British established the Uganda Protectorate around the kernel of the Kingdom of Buganda. Indeed the name “Uganda” was derived from the Swahili pronunciation of the name of the Kingdom. Upon independence in 1962, Uganda had a federal constitution, under which Buganda and other Kingdoms formally retained control of some of their affairs. This constitution was violently abrogated in 1966 and the reigning Kabaka, Edward Mutesa II, was exiled and the Kingdom was abolished.

Buganda was ruled under a state of emergency by the military, which eventually turned on its civilian masters in 1971 with the coup that brought Idi Amin to power. Uganda slowly descended into civil war and state failure and thousands of lives were lost.

Peace and stability were restored to Buganda and the Southern part of the country in 1986 when the National Resistance Army, led by General Yoweri Museveni, the incumbent President of Uganda, took over power with the backing of the overwhelming majority of the people of Buganda, whose central demand was the formal restoration of their Kingdom.

In 1993 we were blessed with the restoration of the Kingdom, and my husband Kabaka Ronald Muwenda Mutebi II, was formally installed as the 36^th Kabaka of Buganda. The Kingdom was restored as a cultural institution, with no administrative or legislative powers. The people of Buganda identify with the cultural leadership (Obwakabaka) not only as a source of basic identity but also as a rallying point and personification of their political, social, economic and cultural aspirations.

Therefore, despite the fact that the Kingdom has no administrative or legislative powers and that cultural leaders are barred from engaging in partisan politics, the institution of the Kabaka wields significant political, social and economic influence over the 6 million or so Baganda and, by virtue of its geographical position, on all of the people of Uganda as well.

It goes without saying that since, as in the rest of the world, roughly half of our population is made up of women, the Kingdom has a great impact on the lives and position of women. I am proud to say that women leadership was and still is recognized in traditional Kiganda culture. Traditionally a Kabaka reigns with two significant women leaders – the Namasole or Queen Mother; and with a female co-heir, the Nnalinya Lubuga, who is a princess – one of the Kabaka’s sisters.

In antiquity and to, some extent, to date, the Namasoles and the Nnalinyas were powerful women leaders with their own estates and royal courts. The Kabaka was and still is expected to consult with them on crucial decisions.

With the advent of Christianity, the first Kabaka to be wed in church, Daudi Chwa II, bestowed on his wife, Lady Druscilla Irene Namaganda, the title of Nnabagereka. This title, which I hold today, has taken on the role of mobilizing women to development in the Kingdom, a role which is reflected in the root of its name – “okugereka”, meaning to plan or prepare for providence.

It is in this context, or against that background that I addressed myself to the issue of the role of women in achieving sustainable development. The Kingdom has been and continues to provide for women in leadership roles. Those roles have been modified over the years and have provided for cultural acceptance of woman participation in several areas of social and economic life.

If the growth statistics fail to reflect the reality of ordinary people – by not demonstrating how this growth translates into prosperity in their daily lives, then this is especially the case for women.

Growth statistics mask the fact that women, living in a predominantly patriarchal society, are disproportionately represented amongst the ranks of the poor. The statistics do not show that according to a recent survey, as many as 40% of all the women in Uganda are unpaid family workers, mainly in agriculture[1].

It is also worth noting that conventional growth statistics do not adequately reflect the inequality of income between men and women, for those women who find employment. They do not reflect the glass ceiling that women hit in their careers, especially because they have to take time out to have and raise children.

These statistics also do not take into account the lost economic output of the thousands of women who die in childbirth every year or the millions of women who are rendered less economically productive because they are looking after children who suffer from preventable diseases. Lastly, growth statistics conceal the fact that the land tenure system unjustly favors men over women.

Looking at the plight of women in present day Uganda, it is easy to throw one’s hands in the air and say that the situation is hopeless. But that is not how the women of Buganda or Uganda see it. Despite the challenges, women are the beating heart of agricultural and other economic production. We are strong and resilient, beating the odds to contribute significantly to Uganda’s sustainable development.

Going forward, it is incumbent on the Government and private investors to reward the resilience of Uganda’s women by putting women at the centre of policy and investment decision making. By this, I mean more than quantitative window dressing. What we need is a real qualitative assessment of gender sensitivity and gender impacts of all investments in our country.

We must commit genuine efforts to make growth translate into equitable and sustainable prosperity for women. The results will be swift if the first thing that is addressed is inequality in pay. Women are already working so hard for little or no pay, just imagine how much harder they can work when they are getting equitably paid.

Legitimate and ancient cultural institutions, such as the Kingdom of Buganda, have a role to play in promoting women to achieve sustainable development in Uganda. As I already said, Kingdoms such as ours have vast untapped social and economic influence.

By enhancing the visibility of women, not just in leadership roles, but also in the tasks of economic production, cultural institutions can bring about the change that unleashes the presently constrained half of the population to production, wealth and prosperity.

Constructive partnerships between cultural institutions, on the one hand, and Government and/or private investors can help lower and eventually overcome the barriers that hold women back in the work place and elsewhere.

Together, we can work on the barriers to more meaningful economic participation by women – by:

• Improving access to maternal healthcare;
• Reducing infant and child illness and mortality through better access to vaccines and primary healthcare;
• Encouraging parents to send their girl children to school and to leave them there; and
• Positively addressing and redressing the historical disadvantages faced by women in all aspects of economic production by inculcating a new culture of inclusiveness and equality.

Government can also partner with legitimate cultural institutions to work towards achieving land tenure reform so as to ensure that women have:

• security of tenure in the land that they occupy in their own rights and not simply as the daughters, wives or mothers of a man;
• the right to buy, inherit and bequeath registered titled land; and
• the right to equitably share in matrimonial property on the death of a spouse or upon divorce.

In conclusion ladies and gentlemen and at the risk of repeating myself, women play a big but largely under-recognized and unrewarded role in Uganda’s development. It is time that our efforts were recognized and duly rewarded. It is incumbent on Government and private investors to ensure that investment into Uganda equitably benefits men as well as women. Cultural institutions have played and will continue to play a role in bringing about gender equity in development and prosperity.

I do not simply make these suggestions or proposals for the sake of making a great sounding speech. As the Nnabagereka, I have walked the talk by dedicating myself to making a difference in the lives of the people of Uganda especially Children, women, youth and vulnerable groups.

In 2000 I established the Nnabagereka Development Foundation, which works strategically with other philanthropic institutions, with investors and with Government to provide support in key areas of need such as: maternal health; community development; education; public health; poverty eradication; cultural preservation and the empowerment of vulnerable and marginalized groups.

The Foundation, which has positioned itself as a pacesetter in leveraging the cultural voice for national and regional development, aspires to be a leading cultural foundation that uses culture as a development tool in contemporary society.

We believe that the most successful development programs will be those that not only understand the nuances that exist among different cultures, but those that integrate the positive elements within cultural institutions and work with cultural leaders as equal partners; recognize positive cultural contexts and culture as a key framework that defines our choices, opportunities and abilities.

Some of our initiatives that we’ve implemented include the bursary scheme for primary school girls, and scholarship for secondary and university female students; SRHR advocacy campaigns for both women and men; support to youth and women income generating projects; and our flagship program the Ekisaakaate kya Nnabagereka a children’s cultural camp which is founded on the cultural values of social responsibility, industriousness, integrity, respect for diversity, and discipline. As a result, children who go through the Ekisaakaate not only learn their native language, etiquette, personal and spiritual development, they also acquire leadership, business and entrepreneurship skills.

I commit to continue tirelessly with these efforts because while a lot has been achieved, there is still much more to be done.

Ladies and Gentlemen: I hope that what you all see and hear during this Convention translates into measurable and sustainable prosperity for the children, women and men of Uganda. I wish you all fruitful deliberations.

Thank you, and God Bless you.
THE NNABAGEREKA
HRH SYLVIA NAGGINDA LUSWATA

Eric Olanya, Head of Trade, Uganda, Department for International Trade, British High Commission

Presentation: BUSINESS OPPORTUNITIES IN UGANDA (An overview by Department for International Trade, British High Commission Uganda.)

Key talking points will include:

• In which sectors are UK exports thriving and how do they remain competitive? What are the major success stories in Uganda?
• Relationship building: Forming local partnerships to greater understand market needs and to position UK exportable products and services accordingly.
• With the rise of cheaper manufacturing in emerging markets such as Asia what are the changes to business practices that UK SMEs need to adopt to remain competitive?
• Gaining competitive advantage: Are UK manufacturers currently competing on price or on quality?

He gave a brief overview of the department their key priorities sectors, competition, cooperation, finance offer and the key risks that UK companies face doing business in Uganda.

The department for international trade at the British High Commission in Kampala in the UK Ministry of Trade under the Minister the RT Hon Liam Fox MP and the role is to secure UK and global prosperity by promoting financing international trade investment and championing free trade on behalf of UK companies. A big part of role was British Trade and now taking up British Investment overseas markets as priority.

The key sectors of focus were oil and gas infrastructure, agritech, renewables promoted under a structure called “The High value campaigners resources are dedicated towards exploring these opportunities and making them a reality.

On oil and gas, the focus was only on major projects, oil refinery, supply chain opportunities that included logistics, oil fields services and others. Also focused on skills development whist included education, training and national development on the infrastructure the focus was on the roads and the particular moment looking at two roads that were for oil and gas development, interested in express ways that was Kampala, Jinja and Kibuye, Busega roads.

The department was in advanced talks for Kabale international airport and also the development of national airline, bridges and emergency bridge and fly overs in Kampala and having high level discussions on institution housing and commercial complexes on renewable in discussion in transmission and distribution with Umeme and electricity transmission company working on projects from biomass to energy and hydro mainly focusing on small and mini hydro plants.

On Agritech, working with Alvan Blanch animal and fish processing, irrigation, grain silos with the government and packaging materials for agriculture projects on the point on how UK companies competed and collaborated to other countries. UK used to be a great business partners to Uganda and overtime there had been a decline in doing business in Uganda. in terms of competition the UK offered high quality services and goods though at higher price due to transportation bottlenecks.

There was a collaboration with china on major projects in the oil and gas sector and construction of projects with Turkey, there was a collaboration on contraction of ports in Uganda and in Tanzania on a standard gauge railway.

The UK export finance is the UK government best kept secret for business and this can help UK registered business. the UK country cover for Uganda had been raised from eighteen million pounds in 2014 to six hundred million pounds in 2017 with a possibility of taking it further as a country cover for Uganda. This showed the UK commitment and demand for projects in Uganda. there was confidence in Uganda market as regards bankable projects over two hundred million pounds had been committed to the Kabale international airport and over another nine hundred million pounds work of projects in Uganda because of backing of UK export finance in the market promoting on the key risks of doing business in Uganda. Eric expressed his personal view from his experience as an individual in supporting UK companies one is the timing of projects when it would it begin, was it a priority project for the government, expressed that he had seen good projects on paper but wouldn’t work as it was not a priority project and it wouldn’t work in the prospective future and the department help companies make those decisions.

The second key risk was contact and relationship, which was a key area for decision makers in Uganda, was it the MP, the Uganda investment authority, the minster, the state house, who should be talked to about the project?

That was always a challenge that this department took on to help British companies to navigate. local partnership was another risk, were they legitimate, honest, did they have expertise to manage the project. Many UK companies came to the department after being burnt by the local partner and then they are taken on by the department to navigate the problem.

The other risk was the process, what documentation was needed, the hierarchy of the requirement, priority of the process and these were risk areas in terms of doing business and it would be great if stream lined. There was Buy Uganda Build Uganda policy and how it affected trade with Uganda and this policy has a lot pro and anti arguments which the department had no position on but it was a risk that companies have to think about.

Local partnership is another risk, are they legitimate, honest, do they have expertise to manage your project?
Many UK companies come to the department after being burnt by the local partner and then we help them to navigate the problem”. Eric warned

Management was the last risk seen in Uganda, how companies intergrade international best practices it was used to in different markets in developed markets with the local indigenous practices that one had to abide by or work with.

That department for international trade help UK companies.

There is a service called overseas market introduction service, the department conduct market research, programme arrangements contacts for companies Etc., this is chargeable service which requires commitment at a subscribed government rate.

• The department do lobbying and support with the trade envoy by Lord Popat engaging the business fraternity in Uganda, meeting senior government officials including the president.
• That department also help to navigate through UK export finance which is under the department for international trade and identify areas that needs direct lending opportunities, insurance guarantees or any other support. The moto for the department “no deal should fail for lack of finance”.
• Lastly, the department arrange events for companies’ trade mission in October and November focused on oil and gas.