Joy in a Foreign Land: Doing Business in Uganda

KAMPALA, UGANDA--When last year Vimal Shah said that Uganda was getting more attention from Kenyan firms, he definitely didn't have in mind people like Fred Karanja.

But Karanja, a small trader in Uganda's Lubowa area, can identify with the reason why Kenyan firms are increasingly shifting their focus to Kampala: Uganda has trade-friendly policies.

Business leaders in East Africa like Shah, the chief executive of Bidco Oil Refinery Ltd. – a Kenya-based company – seemed to have discovered this quite early. Bidco, for instance, has one of the largest oil refineries in Uganda – and even a large palm tree farm.

"More traders from Kenya have found it easier to cross into the Ugandan side with their goods...," said Shah.

Karanja, 31, and a father of one, is among the traders who have found it easier to criss-cross the Kenya-Uganda border. But unlike other traders from Kenya, he has decided to set up base in Uganda.

"Business in Uganda is good," says Karanja. "They generally have policies that favour business growth."

Karanja, who hails from Kenya's Nakuru region, has lived in Uganda for about nine years. He first came to this East African country in 2003 as an A-Level student.

He then joined Makerere University in 2006, graduating with a bachelor's degree in education in 2009. But instead of joining his colleagues in the classroom, he opted to work as a business assistant for a Kampala-based firm that specialised in money transfer services, bulk sms and vehicle monitoring services.

"When I came to Uganda, I never thought I would end up doing business. I learnt how to do business from them (employers)," the ever-smiling Karanja, says.

He quit the job after one year and started his own firm. The firm, based at the Quality Shopping Mall in Lubowa, offers money transfer services, bulk sms and vehicle monitoring – the very services his former employer engaged in. 

"It is rewarding to be in business. It is an eye-opener since you get to meet new people from whom you learn a lot," he says.

Karanja says that the money transfer component of his business is doing well. He deals with three major telecommunications companies in the East African region: MTN, Waridi (both Uganda-based) and Safaricom (Kenya-based).

He has been of great help to Kenyans who live around Lubowa area and want to send money to their loved ones back home. He says that he transacts about Ksh100,000 ($1,176) through Safaricom's M-Pesa service daily.

"The Kenyan population in Uganda is vast. They are the ones who prompted me to start the M-Pesa service," Karanja says, noting that he serves at least five Kenyans daily.

According to him, low crime levels in Uganda are one of the major factors making the country attractive to investors. "Security here is one of the best in the region," he says.

Many commentators echo Karanja's sentiments, saying that an impressive skyline, streets with a European flair, friendly people and a vanishingly low crime rate make a visit to Kampala a real highlight of your trip to Uganda.

"It is hard to hear cases of highway robbery – or even gunshots. There is no day you will ever feel unsafe in Kampala because you are carrying money," he says.

He, however, says he doesn't like changing Uganda shillings into Kenya shillings "because I usually end up with less". He also says the cost of transport in Uganda is high.

For now, though, Karanja is happy to call Uganda home away from home.

-Reporter Francis Ayieko can be reached at francisayieko@yahoo.com.