“This country offers many opportunities to foreign companies and investors”, says Jorn Leeksma of the Dutch Embassy in Kampala. He is convinced Dutch entrepreneurs can find success in Uganda. “Especially in agriculture, tourism and clean energy. Uganda has lots of very fertile farmland and a mild-warm climate with plenty rain. Well-managed farms can reach up to three yields a year.”
Fifty to a hundred Dutch companies have already discovered Uganda. Among them are two of the biggest tour operators in the country. “Tourists are starting to appreciate the beautiful nature here. In recent years the number of visitors has been growing. They come to see the ‘Big 5’, among other things, but also the unique mountain Gorilla, that lives in the rainforest on the border with Rwanda.”
Willem Nolens from SolarNow has been selling solar home systems in Uganda since 2011. He agrees Uganda is a good place to do business. “There is an enormous demand for reliable solar energy solutions in Uganda”, he says. “Only 8% of the population has access to electricity. Four million households still use kerosene lamps, diesel-generators and batteries for their radios.”
That’s not only bad for the environment and people’s health, but also quite expensive. “Solar energy is cheaper and better for the environment. Additionally, households that get our solar home system often gain access for the first time to television and the internet. That helps people get more connected to civil society, especially women and children.”
Solar energy also helps farmers increase their productivity. “Yields can be increased by solar-powered water pumps and cooling systems. These systems generate more income for the farmer and increase economic growth, employment and food security.”
FAVOURABLE BUSINESS CONDITIONS
Leeksma emphasizes Uganda’s favourable business conditions. “Ugandans are overall a friendly, open-minded people. Public life and travelling are safe and relatively comfortable. The political and cultural climate is quite stable. Joseph Kony’s infamous Lords Resistance Army has been wiped out years ago.”
Another potential benefit is the low cost of production in Uganda. One of the main reasons behind this is the fact that Uganda has no minimum wage. This benefit can easily lead to worker exploitation and poverty though: a serious CSR-risk. Companies must therefore see to it that they always pay their employees a living wage.
Uganda has its fair share of business and CSR-challenges. One of the main hindrances is corruption. “This is something many companies encounter in their daily business”, Leeksma says. “It occurs in every level of government. Entrepreneurs have to find ways to deal with it without incriminating themselves. Many seek help from a local agent or business partner. The Embassy is also ready to help. A phone call or note from a Dutch government official to the right person can make all the difference.”
Getting your stuff in and out of the country can be another challenge. “Road transport to the nearest port – Mombassa in Kenya – can be time-consuming and unpredictable. Custom officials are not always helpfull. Unpredictable quality controls may hold up your goods at the border for unnecessarily long times.
In general government policies can be quite unpredictable, says Nolens. “This is one of the biggest risks of doing business in Uganda. Especially the ever-changing tax policies can leave your business vulnerable to sudden new tax assessments, even retroactively.”
David Katamba, director of the Ugandan Chapter for Corporate Social Responsibility Initiatives (UCCSRI) calls it ‘doing business amongst irresponsible players’. This kind of players can also include companies and employees. “Competitors might not adhere to the same CSR-standards as you. Also, worker loyalty can be low. If some other company pays more, you might find your workers gone the next day.”
That’s not to say Katamba doesn’t see opportunities for sustainable business in Uganda. Quite the contrary. “Although there yet may be little institutional benefits for CSR, there is a large and ever increasing local and international market for sustainable goods and services and inclusive business models. On the local market, especially education and the health sector are growing markets for sustainable goods and services.”