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THIS IS AN INDEPENDENT PUBLICATION BY ARCHIMEDIA LONDON

November 13, 2012

PHOTOS: MARCO VENDITTI

A country in the process of transformation

As Uganda celebrates the 50th anniversary of its independence, there is much to look forward to, writes Justin Keay
a medium-income country in the next few years and certainly a first [world] one in 50 years. In broad economic terms the country has come a long way, with GDP increasing 13-fold since 1986, from $1.55 billion to $20 billion today. GDP growth has averaged 6% a year over the past 15 years, until the global financial crisis hit, and growth prospects by current international standards remain good. GDP is expected to rise some 4.5% this year and 4.9% next; inflation is well down on last year, with 5% expected for 2012. Tourism is up too, with many Europeans in particular keen to see what is described as the real Africa, and Kampala is one of Africas safer cities. Lonely Planet has designated Uganda its top destination for 2012, drawing attention to dense misty forests, snow peaked mountains, sprawling savannas and the famous mountain gorillas. Certainly Uganda has been helped by the fact that prospects for Africa generally have picked up. The IMF is predicting African GDP to rise 5% this year and 5.7% next. This, together with improvements in technology including the widespread use of mobile phones in areas that were once all but cut off and crucially, better governance, have all played their part. And investors are taking note. Mark Mobius, an emerging markets guru with Templeton Emerging Markets Group in New York, has launched a special Africa fund reflecting his belief that improved government, helpful demographics, a growing middle class

or nations, as with people, anniversaries are an ideal opportunity to reflect on past achievements and failures but also to emphasise future challenges and priorities. On October 9th, Uganda celebrated 50 years of independence from Britain in buoyant mood. President Yoweri Museveni, in power since 1986 after the murderous misgovernment of Idi Amin and Milton Obote and re-elected in February 2011, cited considerable progress in overcoming Ugandas historic bottlenecks. These include religious and tribal sectarianism, underdeveloped industrial, agricultural and service sectors, poor infrastructure and a lack of education and training. He promised continued advances in these areas. Uganda without doubt will become

and a rich natural resource base could make this Africas decade. Uganda has had triumphs of its own. The big catalyst is that large-scale oil production is due to begin in 2016, thanks to the successful cooperation of Tullow Oil, TOTAL, CNOOC and Ugandas Energy Ministry. Reserves are some 40% more than initially forecast, around 3.5 billion barrels. The plan is also to construct a local oil refinery. President Museveni stresses that the careful development of Ugandan oil which will enable reduced dependence on foreign aid will take place in a broader context. Peace in Uganda as well as in the region is our number one priority, since without stability its impossible to grow. Our next priority is to build our human resources. Once we achieve that, improving infrastructure is top of the agenda. Finally we should Continued on page 2

IN THE NEWS
Independence Day October 9, 1962
Now that we are independent, I appeal to you all to work with all your might in whatever you shall do, so as to bring glory to both our kingdoms and the State of Uganda. Let us not allow our differences in nations, religion and colour to be a divisive factor among our people. God Bless Uganda.
Maj. Gen. Sir Edward Mutesa II Kololo, 9th October 1962

Helping Uganda build the next 50 years

The Oasis Group of Companies congratulates Uganda for the achievements of the past 50 years while looking forward to a bright and prosperous future. Our multi-million dollar projects, the upscale Oasis Nakumatt Centre and the luxury hotel and apartment complex Laburnam Courts are transforming the economic landscape of Kampalas central business district and the lifestyle of its people. Kingstone Enterprises Limited, one of the largest distributors of cement and other hardware materials also contributes to the growth of industry in Uganda and to the strength of the nation.
www.laburnamcourts.com Email: laburnamcourtsltd@yahoo.co.uk

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Madhvani Groups top priority is Ugandas growth

A country in the process of transformation

Continued from page 1 accelerate the process of regional integration, as a bigger market will give us extra strength, he says. President Museveni emphasises that Uganda is open for business but stresses the need to add value. This explains why Uganda is keen to construct an oil refinery and why, within its celebrated coffee industry, the focus is on roasting locally rather than exporting an unfinished product. Africas economy as a whole can grow 10 times just by adding value to our natural resources, he says. Investment is key. The 250-megawatt Bujagali hydroelectric plant, inaugurated last month on the eve of Ugandas 50th anniversary, will resolve the problem of intermittent electricity supply, which has historically bedevilled the economy. There are other projects under way, too, notably in mobile telephony, which is transforming the lives and livelihoods of many of Ugandas 34 million people, particularly farmers and small rural traders. By channelling 1% of the gross income of Ugandas five telecom operators to a special Rural Communication Development Fund, communications are reaching the remotest parts of the country. We have also done a lot of work in spreading ICT to schools. We have almost got to 1,000 secondary facilities so that all our youngsters can access IT, says Godfrey Mutabazi, executive director of the Uganda Communications Commission. When we set up this organization we set the goal of spreading the communications industry to the entire country, and we ensure there are the right policies for it to develop into a vibrant industry. Communication is going to change our society tremendously. Problems remain within Uganda, including corruption and red tape, which hold back investment and growth. Regional stability remains a big concern, as does unemployment and rural poverty. President Museveni used the occasion of Ugandas anniversary celebration to launch a 10-point plan, which includes a focus on education, facilitating private sector growth and boosting agribusiness, industry and services. Underlying all this is the recognition that investment, both local and foreign, is key to Ugandas ambitions, with oil making these more realisable. My belief in that road map is unshakeable, he said.

Century-old firm is a global player in sugar, soap, tea and tourism

ugar was the foundation of our fortune, writes the late Manubhai Madhvani, in his book Tide of Fortune, a Family Tale. But sugar was also the reason why his family and many thousands of Asians was expelled from Uganda in 1972, during the schizophrenic regime of Idi Amin. Accused of sabotaging the Ugandan economy to the detriment of the indigenous Africans, the Madhvanis were given 90 days to leave a land they considered home. From Gujarat, an Indian state noted for its entrepreneurialism, Muljibhai Madhvani came to Uganda as a boy at the turn of the 20th century. He identified the countrys ideal climatic conditions for growing sugar cane, a crop which was abundant in Mauritius but almost absent in Africas interior. Here, at an altitude of 4,000 feet near the city of Jinja, where John Speke found the source of the river Nile in 1862, Muljibhai started building Kakira Sugar Works, which would account for some 13% of the countrys GDP at the time of the Asian exodus. Today, the fifth and youngest son of Muljibhai, Mayur Madhvani, sits at the helm of what has become the Madhvani Group. Schooled in England, Mayur clearly remembers the day in 1985 when he and his brother Manubhai came back to Kakira, after 13 years absence. During this time the factory had been all but destroyed and the production of sugar had entirely collapsed, but local people had kept his fathers business cards in the drawer of his desk. Attachment to the land, and to the wider environment, is still very strong in the Madhvani family. I am proud that we already provide 14 megawatts of electricity to the national grid,

Attachment to the land is still very strong in the Madhvani family

The Madhvani Group is embarking on the biggest expansion of its production facilities to date.

while the steam produced by burning bagasse, a residue of squeezed cane fibre, is the sole source of energy in our sugar factory, Mayur says. Today the Madhvani Group stretches from East Africa to the Middle East and India with interests ranging from sugar and soap to tea and tourism, but the development of Uganda is still of prime interest to Mayur. Forty million acres of suit-

able agricultural land is still underutilized in the country according to President Museveni; Mayur Madhvani believes that agro-industry offers the greatest opportunity for future growth. Besides investing $85 million to boost capacity and reach 180,000 tonnes of sugar per annum in what is our biggest expansion to date, we are also launching a brand new project in Amuru in the north of the country.

Amuru will be a joint venture between the Madhvani Group and the government, which will hold a 51% share in the name of the Acholi people, who suffered the most through the brutal practices of the Lords Resistance Army. Amuru will be the next Kakira for this country, says Mayur. He is confident that by giving a sense of ownership to the less fortunate and creating job opportunities, his family will be doing its part towards putting unrest and misery firmly in Ugandas past. MARCO VENDITTI

HOW A BUSINESSWOMAN IS HELPING RESHAPE KAMPALA

Amina Hersi Moghes empire ranges from a luxury condominium and serviced hotel to upscale retail; and more is yet to come
Perhaps the greatest expression of Ugandas development since independence is the rapid growth of Kampala, its political, economic and cultural heart. This vibrant and chaotic city now provides a home, and opportunity, to some 1.7 million people, compared to 50,000 in 1962. Amina Hersi Moghe, an award-winning Somali businesswoman, is one of those who chose Kampala as her home. Amina grew up in the border town of Bungoma in western Kenya, a trading centre where her father came to buy and sell cattle. Bungoma is two and half hours from Kampala, but five from Nairobi, Amina says, sitting in an office overlooking the swimming pool at Laburnam Courts and beyond to the hills that frame Kampalas skyline. Laburnam Courts is one of the citys most upscale condominiums and serviced hotels, high on the green slopes of Nakasero Hill, a central and fashionable district of Kampala that houses some of the splendid residences of the ambassadors to Uganda. Amina is justly proud of the 120 luxurious two and three-bedroom apartments that she says fill a vital niche. But Laburnam Courts is far from her only achievement. Amina is also behind the Oasis Centre, a multi-million-dollar shopping complex in central Kampala; she also helped foster Ugandas construction boom of the 1990s by ensuring a ready supply of cement and hardware from Kenya. Amina draws inspiration from her mother. Sarah Hersi Ali, or Mama Haris is well acknowledged in Kenya, having built a real estate empire from a modest restaurant and food store. For years Amina visited Uganda with a briefcase and it is only when a tragic car accident killed her two young daughters that she decided to move to Kampala permanently. I could not conceive of the idea of staying in Kenya and living so close to such a personal tragedy, she says. In Kampala, Amina put all her strength and determination into building two multimillion-dollar projects which transformed Kampalas central business district. I learned so much thanks to these two projects. Now I have a very professional team in place, from the management and engineers to the architects, she says. Tackling the next project will be much easier for me as long as I have access to credit, which is the most challenging part of working in Uganda. And Amina is already thinking about her next project, something that will resemble Sandton City in Johannesburg, one of Africas leading retail complexes. Kampala has long been shaped by its new arrivals. It is entrepreneurs with Aminas determination that will transform the landscape of the city further. MV

Laburnam Courts, a condominium and serviced hotel complex on Nakasero Hill

We all need to communicate

Uganda Communications Commission is the regulator of the communications sector in Uganda. We ensure high quality, affordable and user-friendly communication services, including state-of-the-art connectivity in the whole country and from Uganda to the rest of the world.

www.ucc.co.ug

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Central banker optimistic about countrys prospects

Mutebile says Bank of Uganda is creating conditions to ease monetary policy, promote exports and foster growth
How has the Bank of Uganda sought to contain rising inflation? Inflation rose rapidly in 2011. To curb it, the BoU raised repeatedly its policy interest rate the Central Bank Rate (CBR) from 13% in July 2011 to 23% in November 2011. The rise was intended to slow the growth of domestic bank lending, to encourage household saving, and to provide support for the exchange rate. As a result of these actions, annual headline inflation peaked in October 2011 at 30.5% and has subsequently fallen consistently month on month to a rate of 11.9% in August. The reduction in inflation has allowed the BoU to ease monetary policy gradually, with the CBR standing at 15% in September. The lesson which can be drawn is that taking decisive action to tackle inflation, by raising interest rates, is effective in Uganda, both directly through its impact on domestic spending and indirectly through its impact on expectations of future inflation. Furthermore, because taking decisive action is effective, it means that there is room to ease monetary policy more quickly once inflationary pressures start to abate. Import growth continues to outstrip that of exports. Is Ugandas balance of payments cause for concern? The balance of payments is a worry because of the size of the current account deficit: approximately 12% of GDP in the last fiscal year. Export growth has decelerated since the onset of the global economic crisis, mainly because of stagnation in major export markets, while import growth has continued to be relatively robust because of the growth of the domestic economy. In 2011/12, the current account deficit was funded from net capital inflows, mainly foreign direct investment (FDI) and portfolio capital. However, over the medium term it is imperative to prevent a widening of the current account deficit, especially by promoting exports to new markets,

INTERVIEW Prof. Emmanuel Tumusiime-

such as regional markets. The key requisites for this are to maintain a competitive real exchange rate and to reduce the costs of transporting goods to export markets. How has the Ugandan shilling performed against major currencies? In common with many other emerging and frontier markets, Uganda has experienced considerable volatility in its nominal exchange rate over the past 18 months, in part because of short-term capital flows which are very sensitive to both domestic and global factors. The Ugandan exchange rate depreciated sharply against the US dollar in the third quarter of 2011, but then rebounded in the fourth quarter and reversed almost all the losses it had incurred. The rebound was primarily driven by strong inflows of portfolio capital from offshore institutional investors, attracted by the interest rate differential between

real terms albeit at a slower rate than was achieved during the global economic boom in the mid 2000s. The Ugandan economy has become much more resilient to exogenous shocks over the last two decades, because it has become more diversified both in the structure of production and the composition and destination of exports, and also because market-oriented reforms have promoted greater economic flexibility and ongoing structural change.

What is your outlook for economic growth in 2012/13? The preliminary estimate for real GDP growth in 2011/12 was 3.2% but this may be revised upwards when data for the full fiscal year are made available. Growth was below potential, which we estimate is between 6% and 7% per annum, in 2011/12 because of the weaknesses in demand from both external and domestic sources. In 2012/13 we are not expecting a

significant strengthening of external demand, given the ongoing problems in the global economy, but domestic demand should pick up modestly when the reduction in interest rates stimulates a recovery in bank lending to the private sector. Provided that inflation remains firmly under control, the BoU is prepared to ease monetary policy to move the economy back towards its potential growth over the medium term.

External shocks from the global economy have not derailed the Ugandan economy; it has continued to grow in real terms.
Prof. Emmanuel Tumusiime-Mutebile, Governor, Bank of Uganda
Uganda and industrialised economies. The strength of the exchange rate has allowed the BoU to expand its foreign exchange reserves from under $2.4 billion at the start of 2012 to the current level of over $2.8 billion, equivalent to 4.8 months of imported goods and services. As the BoU reduced its policy interest rate, we expect that some of the portfolio capital invested in Ugandan financial assets will flow out. However, we are prepared to use some of our reserves to cushion the exchange rate from large and disruptive falls in value. What has been the impact in Uganda of slow global economic recovery? The global economic outlook is not propitious for the Ugandan economy. Since the onset of the global financial crisis in 2008, the recession and weak recovery in the industrialised economies have had a negative impact on Ugandas balance of payments, with exports, workers remittances and FDI all experiencing very slow growth. Nevertheless, the external shocks from the global economy have not derailed the Ugandan economy; it has continued to grow in

The Bank of Uganda fosters a strong and vibrant financial system, playing a pivotal role as a centre of excellence in upholding macroeconomic stability. During the adverse global conditions of the past few years, Ugandas economy has continued to thrive and the macroeconomy has remained sound. We celebrate 50 years of independence in Uganda by presenting a transparent, solid and exciting environment for investment, economic growth and social development. Bank of Uganda
37/45 Kampala Road Kampala, Uganda Ph: (256) 414258441/6 Fax: (256) 414233818 www.bou.or.ug
Email:info@bou.or.ug

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PHOTOS: MARCO VENDITTI

THRILL SEEKERS WELCOMED

The Pearl of Africa is experiencing a tourism revival. It isnt hard to see why, this is Africa at its very best.

MEET THE FAMILY

CARMEN MOURA IS ENCHANTED BY THE MOUNTAIN GORILLAS OF BWINDI IMPENETRABLE FOREST
Fewer than 800 mountain gorillas exist in the wild, according to the African Wildlife Foundation, spread between Uganda, Rwanda and the Democratic Republic of Congo. So its no surprise that these magnificent creatures are Ugandas star attraction. The opportunity to observe them in their natural habitat proved an exciting and moving experience. Tracking gorillas requires a permit from the Uganda Wildlife Authority and the place to do it is the Bwindi Impenetrable Forest National Park in Ugandas rugged southwest. The gorillas are separated into families and they move daily to feed, so tracking them can take hours of walking through thick forest. Our guide tells us that well track the Kyaguriro group, which consists of 18 members. Once we find them we can only stay with them for an hour and we must keep our distance gorillas are delicate in spite of their size and they can catch diseases from humans, including the common cold. Not 30 minutes into the climb the foliage stirs and we spot a female munching contentedly on leaves. Our first encounter with a gorilla has been sudden and gentle. She doesnt seem to mind us and we are enchanted by her. However, suddenly a huge head appears among the leaves. A silverback, Rucina, is making his way down the slope towards her. He is not in a good mood. As he comes closer he leaps and lands on her with a crash. She flees, wailing. The ranger explains that she is the only female that has no babies, and Rucina likes to remind her. Now some junior males, called blackbacks, come down the slope too. They pretend not to see us, but like teenage boys they show off by climbing and hanging from trees. Higher still we find several females gnawing on wood a source of vitamins and insects accompanied by infants. A lone male guards them, his suit of leaves acting as camouflage. The babies come closer, their old-men eyes look at us curiously, as if we were the attraction. One of them crosses his arms and leans, like a villager in a window watching people go by.

hen Stephen Kiprotich stormed down the Mall this summer to become the surprise winner of the Olympic marathon, the flag he draped himself in would have been unfamiliar to many. Not only is Uganda not a high-profile sporting nation, it has long been off the mainstream tourist radar too. For decades beleaguered by dictatorship and civil war, the country Winston Churchill once dubbed the Pearl of Africa is now seeing a quiet tourism resurgence. This year, as Uganda celebrates its 50th anniversary of independence, Lonely Planet voted it its number one must-see for 2012. The East African country is certainly a fantastical place a land where lions climb trees, tourists climb the Mountains of the Moon and where trekkers, without so much as an enchanted sword between them, regularly confound an Impenetrable Forest. This fairytale-sounding tree fortress, Bwindi in Ugandas southwest, contains not a sleeping princess but half the worlds population of endangered mountain gorillas. Those that tolerate human presence have become the countrys star attraction. This is far from Ugandas only piece of animal magic; though only the size of the UK, its varied terrain supports astonishing

biodiversity. Seventeen more species of primate including chimpanzees and golden monkeys; the big five game animals; cheetahs, crocodiles and over a thousand species of birdlife are found across Ugandas 10 national parks. Most tour operators itineraries concentrate on the Bwindi and Queen Elizabeth reserves. The latter packs a series of highlights: rare tree-climbing lions at Ishasha Plains, chimpanzees at Kyambura Gorge and one of Africas top hippo hangouts at Kazinga Channel. The luxury lodge experience so synonymous with African safari is making a comeback in Uganda. Abandoned during civil war, 1950s-built Chobe Safari Lodge, in Murchison Falls National Park, is one recently refurbished revival, with panoramic Nile views from its regular or luxury tent-style rooms. Owner Roni Madhvani would like tourists to combine more of Ugandas parks: In Kenya it would be normal to see 20 buses looking at a family of lions, but here in Uganda you will be practically alone, he enthuses. Not that everything worth experiencing in Uganda is furry, four-legged or flying. Explorers sought the mysterious source of the Nile for centuries now you can whitewater raft, kayak or jet boat there. Jinja, a couple of hours from the capital Kampala, is the hub for Ugandas adventure tourism

scene with serious paddling action on nearby high grade rapids. If you dont want to get your feet wet, you can dangle from them on a bungee jump, or quad or mountain bike. Other scenic and active highlights are intermingled with safari. Murchison Falls storm through their namesake national park which also showcases giraffe, antelope, chimps and the rare stork-like shoebill. Kibale Forest Reserve boasts 90% reliability for chimpanzee sightings but its other attraction is a cluster of volcanic crater lakes, which make for scenic hikes. Serious trekkers can tackle the snow-capped Rwenzori peaks, the so-called Mountains of the Moon, which sit incongruously near the equator in what UNESCO calls one of Africas most beautiful alpine areas. Cultural interaction may play second fiddle to hairy adventures of the animal or adrenalin kind but tourists can also tour Ugandas coffee plantations and visit traditional villages. Among the most interesting such opportunities is the Batwa Cultural Experience near Bwindi which helps preserve something of the heritage of the Batwa Pygmies who lost their habitat, and their huntergather existence, to national park expansion in the 1990s.

Mother and child seem unperturbed by the presence of visitors