February 5, 2024

Out to Lunch

#OutToLunch: Investment ideas to fulfill your 2024 resolutions

By Denis Jjuuko This week sees the end of the festive holiday period almost for every organisation especially those in the private and development sectors. Like every new year, many people come up with resolutions, committing themselves to what they would like to achieve. For many, making more money tops the list. Money, makes the world go round or so we are told. If making money is one of your resolutions, here are some ideas: Trading in FMCGs: There is a saying that cashflow is king. If you want to make money in 2024, you may have to look at businesses with a lot of cashflow. Trading is one such business. You can buy stuff in the morning and have them sold by the evening. This is common in the sector known as fast moving consumer goods or FMCGs. Almost everybody or household uses them every single day. Such goods may include sugar, soap, cooking oil, wheat, bread, and packaged drinks (soda, water, beer, juices etc.). Fuel (petrol and diesel) are considered as FMCGs too. There are so many other goods in this category just like you see in the supermarket or retail shop near you. Because they are highly consumable, they provide good returns to those who trade in them. The margins per item is small but the secret here is in the volumes. Traders earn about Shs500 or so per a carton of soda or bottled water but the numbers they can sell a day can be huge. A small trader doing just 1,000 cartons a day would be able to earn a gross income of half a million shillings. In a six-day week, that would be Shs3m or approximately Shs12m a month. Treasury bonds and bills/unit trusts: There is an increasing interest in treasury bonds and bills as well as unit trusts. Unlike trading, these are hustle free investment options. You simply walk into your commercial bank with a minimum of Shs100,000 and start investing in bonds and bills. Insurance companies and investment companies regulated by the Uganda Capital Markets Authority offer unit trust investment opportunities some of as little as Shs10,000. Bonds, bills and unit trusts offer returns of about 10% annually. If passive income is your thing, this is where to invest. If you reinvest the interest, in a few years, you can significantly see huge returns due to the power of compound interest. Real estate: There are some people who are running away from real estate especially rentals to invest in the hustle free treasury bonds and bills and unit trusts, which means there is a gap that is increasing in real estate rentals especially for the lower and middle income categories. Already, statistics from Habitat for Humanity Uganda indicate that the country’s housing deficit stands at 2.4 million housing units. As Uganda continues to urbanize, there will be an increasing demand for houses for especially young people who are doing their first or second jobs. Houses that are affordable for the lower and middle income earners will continue to be in demand for years. The investment here is also not so high and can be done incrementally over a long period of time. Besides rentals for this population segment, land banking and selling and buying are still other income generation and saving options. Motor vehicle spare parts: If you live and work in the greater Kampala metropolitan area, you know the state of the roads in the country. Each vehicle you see on the road is a potential client. Given the state of the roads, car breakdowns are going to be the norm rather than the exception. The lack of an efficient public transport system and the culture of owning a motor vehicle considered as a yardstick of success will see an ever-increasing number of vehicles on the road. Most of these vehicles come in old from Japan and the state of the roads will ensure frequent breakdowns. Roads take time to be built even when money is available, making investing in motor vehicle spare parts a worthwhile venture. Electric mobility: A trending photo this week was of Tesla car being offloaded from a car carrier somewhere in Uganda. Teslas are fully electric vehicles. Many development partners and blue-chip companies have started electrifying their fleets. This is a result of URA removing import duty on electric and hybrid vehicles this financial year. Kiira Motors’s vehicle plant is nearing completion with the installation of the assembly lines, paint shops and testing facilities ongoing in Jinja. But we don’t have enough mechanics and technical people to maintain these electric vehicles. We don’t even have enough well-trained electric bus drivers. The electric mobility value chain has great potential for those looking for investment opportunities this year. Personal health: Apart from making money, many people resolve to do something about their health every new year. They perhaps understand that you can only make money if you are alive and healthy. Personal health is already an industry worth of billions of dollars globally. As the country urbanizes and a few people get out of poverty, they will always be willing to spend on their personal health making it an area with potential returns for investors. The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: Patching up potholes and lighting ip expressways shouldn’t wait NAM/G77

By Denis Jjuuko In the early years of the National Resistance Movement (NRM), Dr Samson Kisekka was appointed Prime Minister and then Vice President. Kisekka was said to be a rich man who even had a certain part of Kampala named after him. He had built a modern private hospital in the 1970s in Makerere Kivulu/Kagugube area near Old Kampala. When traders of motor vehicles set up shop nearby, the market became known as Ewa Kisekka or Kisekka Market as we know it today. Dr Kisekka is said to have been a man of means who is rumored to have provided significant resources to Museveni’s rebel outfit, the National Resistance Army or NRA which would capture power in 1986. Kisekka was rewarded with the influential position of Prime Minister and later Vice President. Vice Presidents all over the world usually play the role similar to that of a bridesmaid — be near the bride but not do too much to outshine the bride. May be because of boredom, Dr Kisekka perhaps became the first Vice President in history to hold a weekly radio show. In the days before 1993, Uganda had only one radio station. So, every Tuesday evening, Kisekka did his radio show on Radio Uganda. He was boisterous, boastful, funny and engaging with a deep voice that was actually meant for radio despite his old age. He boasted about his farm in Temangalo near Kampala. He talked about the good life he lived. He reminded whoever cared to listen that he was “Omusawo Omutendeke” translated as a professional medical doctor. As a “Doctor Omutendeke”, he urged his audience to listen to the advice he was giving them if they wanted to live a similar good life like the one he was living. One of Kisekka’s pet subjects was on how Ugandans prepare for visitors. How they leave no stone unturned because visitors were expected at their homes or in their communities. On a tour somewhere in Uganda, Kisekka realized that the community had just worked on the road so that he could use it. They had filled the potholes, dug the trenches and had the road reserve slashed of any bushes days before his arrival. In his speech, which was played on Radio Uganda, Dr Kisekka deeply laughed at the community telling them in their faces that they were an unserious lot. He said they didn’t need to dig up the road for him because he was arriving in a monster vehicle as VP and most importantly, he was also wearing designer shoes. There was no way thorns would pierce his feet. He reminded them, that his car had been driven all the way to the platform where he was standing to give the speech. He then delivered the punch. “Unlike me, you and your children have no shoes. You have no vehicles so thorns will always be piercing you. What about ensuring that your community road is always well maintained even when you are not expecting me?” he said and then let out his signature laugh. On another time, he refused the gifts of goats and chickens the community was giving him. He told them his farm in Temangalo had lots of goats, cows and whatever food he wanted to eat. Yet when he looked at the people giving him the chickens and eggs, they looked like they lacked proteins and hadn’t eaten eggs or meat in a year. He laughed again, boisterously with a lot of pride. Kisekka must be turning in his grave that decades after his speeches and even death, his NRM-beloved is doing exactly what he was telling people not to do — preparing everything for visitors as they starve. Patching up potholes and lighting up expressway spurs just because visitors are coming. The visitors would tell a mature palm tree that was planted the other day. They would tell a road patched up for them. They would know that the lack of traffic jams is because roads are blocked and the citizens are told to use the dusty Nakawuka road to access Entebbe International Airport. Imagine if we had built the Nakawuka road without waiting for the visitors? Businesses would prosper in that area. Uganda Revenue Authority would collect more taxes. We would decongest Kampala of traffic jams. If we hadn’t waited for visitors to patch up potholes, we would have created a culture where roads are well maintained throughout the year. The visitors would then come and see a well-managed country and would wish to return or invest. We may create the impression for visitors from Entebbe to Munyonyo and some parts of the city centre but what if they venture out of their hotels and visit bars in Najjeera on their own? Won’t they see the messed up roads? What if they visit Kabalagala (which many will do) and then realize that not everything that glitters is gold? Will they still be impressed? As Kampala and Entebbe were put on a standstill so that Uganda hosts delegates attending the Non-Aligned Movement (NAM) and the G77 conferences, let us a create a culture that impresses the citizens and residents first. That is how countries and cities develop. Remember what Kisekka said more than 30 years ago. The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: There is more to learn from Joseph Yiga than just his mega country home

By Denis Jjuuko In the early evening of the second day of this year, a video started trending on various social media platforms in Uganda. A guest attending a house warming party had recorded the video while narrating what the amenities were in the house. He concentrated on the visitors’ toilets, guest house, flowers and the sheer size of the compound. Although he exaggerated the acreage of the land on which the house sits, the picture was clear for everyone. Photos eventually emerged as well. For the next few days, social media discussions were centered on the house. Its sheer size and architectural beauty. One person tweeted that at least Kampala’s billionaires were finally building something Hollywood-esque. Others compared it to a five-star hotel in Kigo. Both the hotel it was compared to and the mansion borrow from the Mediterranean architectural themes. A well-traveled friend who was among the guests at the house warming party told me that he hadn’t entered a house that big before and commended the owner’s taste. On social media, eventually everyone asked who the owner was. It turned out, the house on the shores of Lake Victoria in Kasanje Buwaya belonged to Kampala businessman and papal knight Joseph Yiga and his wife Regina. Many people had never heard of Joseph Yiga before and many actually confused him with a dealer in real estate with whom he shares both names. Yet Joseph Yiga is the founder of one of Uganda’s most known brands — Steel and Tube and before that, Hardware Deals. I would never blame them for not knowing him. I have been to events where Yiga has attended but he keeps a low profile. He will never arrive at an event where he would ask the protocol people whether they knew who he was. That is for wannabes who actually have nothing to their name or have just fallen into things the other day. Yiga didn’t become a captain of the industry the other day. He has been in the trenches of business for the better part of his life. Before he founded Hardware Deals, the precursor to Steel and Tube, Yiga had been involved in the cosmetics business among others. As Kampala expanded, he saw opportunities in the construction sector and eventually started his steel manufacturing empire. Steel and Tube is said to be among the top five steel manufacturing businesses in Uganda. That means he can afford the mansion in Kasanje that rivals some of the best five-star hotels in Kampala. But I don’t want to write about his mansion. We know he can afford it. But what do we learn from him? The story is in his move from a hardware stockist to a large manufacture of steel products. He was never contented with playing second fiddle to businessmen from Asia who came here and set up manufacturing businesses and controlled the market. Many Ugandan businesspeople travel to Asia, particularly China, for decades importing stuff and stocking them. Most of the stuff they import can easily be made here but they don’t look at business that way. Countries develop when nationals can control some of the sectors of the economy. If we concentrate on being traders of stuff we can make, we are always at the mercy of those who manufacture them. Manufacturers set the price of their products. They determine the quality and quantity you can get. They can even remove the business from you and start dealing with another trader who may be can deposit more money with them than you. There is nothing you can do about it. That way they determine how much money you can make and you will never make more than them. Many times, they use your money. Had Yiga remained a hardware dealer in Nakasero in the Kampala Central Business District, he would have been wealthy but not able to control any percentage of the steel market in Uganda and the region as he does today. He would probably have built a mega country home but not as luxurious as the one he built in Kasanje Buwaya. He would have employed many people but not the thousands that work in his factories today. If there is anything Ugandan businesspeople can learn from Joseph Yiga, it is the need to move from trading to manufacturing and of course other sectors like banking. We can’t be leaving this to only foreign entities. The writer is a communication and visibility consultant. djjuuko@gmail.com

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