Local Production, Local Solutions
At the core of KMC’s affordability plan is domestic manufacturing. The newly operational Kiira Vehicle Plant in Jinja enables local production of EVs, cutting costs associated with importing fully built units—such as tariffs, freight, and customs.
“By designing and producing vehicles tailored to Uganda’s roads, climate, and usage patterns, we aim to deliver EVs that are both durable and affordable,” says Paul Isaac Musasizi, CEO of Kiira Motors.

Policy Advocacy and Public Sector Demand
KMC is also leveraging policy to stimulate demand. The Government of Uganda has instituted tax incentives, including 0pc import duty and VAT on EVs produced locally and charging equipment. In addition, the government is being urged to prioritize procurement of Kiira-made EVs for public fleets—a move that would stimulate early demand and help drive down production costs through economies of scale.
To improve access to financing, KMC is working with financial institutions and climate finance initiatives to develop low-interest loan products tailored for EV buyers, especially commercial operators.

Innovative Ownership Models
To break through the high upfront costs of EVs, KMC is exploring leasing and subscription models that allow customers to pay in predictable, monthly installments. A more ambitious approach includes Battery-as-a-Service (BaaS), where buyers lease the most expensive EV component—the battery—separately, significantly lowering initial purchase prices.
For lower-income and rural communities, microfinance partnerships and group ownership models are under consideration to enable collective access to EVs for shared transport needs.

Phased Market Entry and Product Strategy
KMC’s go-to-market approach prioritizes high-use commercial vehicles where the cost benefits of EVs—such as reduced fuel and maintenance expenses—are more immediately visible. The company’s E-Bus Xpress initiative, currently piloting the route between Jinja and Iganga, exemplifies this strategy in practice.
Looking ahead, KMC plans to diversify its EV portfolio, introducing a wider range of models, including more affordable personal-use vehicles as production scales and battery prices decline.

Building the EV Ecosystem
No EV transition can succeed without infrastructure. KMC is working with public and private partners to deploy charging stations in cities and along major highways, addressing concerns about vehicle range and reliability. The Iganga Technical Institute, for instance, now hosts a functional EV charging station supporting the E-Bus Xpress pilot.
To sustain operations and build local technical expertise, KMC has trained over 300 EV technicians and operators in partnership with Luweero Industries, with more to follow. Plans are also underway to establish a national network of service centers for EV maintenance.
The company is gradually building a resilient supply chain, with local content in Kiira vehicles now at 21pc and a target of 65pc within the next decade—a move expected to generate jobs and accelerate technology transfer.

Shifting Public Perception
One of the final barriers to widespread EV adoption is consumer perception. While EVs are often seen as expensive, KMC is working to educate the public about the lower total cost of ownership. Compared to traditional internal combustion engine (ICE) vehicles, EVs offer energy savings of up to 78pc and annual maintenance costs nearly half of their ICE equivalents.
Environmental and health benefits—especially in congested urban areas like Kampala—are also being emphasized to build a broader public consensus for electric mobility.
“Our blueprint for affordable EVs is grounded in local innovation, policy advocacy, and strategic partnerships. By addressing cost, infrastructure, and public awareness in an integrated manner, we are positioning electric mobility not as a luxury for the elite, but as a practical and sustainable solution for the everyday Ugandan,” Musasizi says.

The post Inside Kiira Motors’ blueprint for affordable electric mobility in Uganda appeared first on 256 Business News.

By Michael Wakabi

In Uganda’s Wakiso District, just 20 kilometers north of Kampala, a biotech revolution is quietly rising. Spread across 300 acres of red earth in Matugga, the gleaming contours of Dei BioPharma signal a transformative $1.1 billion investment in Africa’s medical future. At the heart of this audacious venture is Dr. Matthias Magoola, a chemist whose journey from malaria-stricken schoolboy to pioneering pharmaceutical entrepreneur now drives one of the continent’s most ambitious scientific undertakings.

Long dismissed as a fantasy, Dei BioPharma recently crossed a critical threshold. Uganda’s National Drug Authority (NDA) granted Good Manufacturing Practices (GMP) certification to two of the facility’s twelve planned production lines, clearing the way for commercial manufacture of capsules and tablets by mid-2025.

“This is not just a factory,” says Magoola. “It’s a launchpad for an African revolution in medicine.”

Magoola’s life has been shaped by adversity. Raised in poverty, he accessed university through a state scholarship and studied chemistry while battling recurrent malaria. His recovery was aided by a potent local herbal remedy—effective across malaria strains, yet free of the side effects associated with conventional drugs. That experience ignited his curiosity, leading to his first international patent and a lifelong commitment to pharmaceutical innovation.

Today, he has submitted over 100 patent applications with the United States Patent and Trademark Office (USPTO), spanning treatments for cancer, Alzheimer’s, HIV, diabetes, and other critical diseases.

Dei BioPharma has already absorbed over $700 million in construction, technology, and R&D. Built to meet global standards, the complex features 12 production lines that will manufacture a wide range of therapies—from generic antibiotics and insulin to mRNA vaccines, monoclonal antibodies, and cancer immunotherapies.

“We are building Africa’s pharmaceutical future,” Magoola declares. “Our goal is to provide high-quality, affordable medicine across therapeutic areas that affect billions.”

The GMP certification ensures operations meet rigorous benchmarks set by regulators. While final product approvals by the U.S. FDA and World Health Organization (WHO) are pending, the milestone marks a pivotal move toward pharmaceutical sovereignty—for Uganda, and potentially all of Africa.

At the core of Dei BioPharma’s innovation pipeline are several disruptive technologies. One standout is a guided RNA-based cancer therapy, engineered to selectively destroy mutated cancer cells while sparing healthy tissue—promising safer and dramatically cheaper alternatives to chemotherapy and radiation.

“There’s a huge opportunity here to democratize cancer care,” says Magoola. “We can treat all types of cancer, at any stage, and reduce the cost from thousands of dollars to under $100.”

Another breakthrough is a universal vaccine for Foot and Mouth Disease (FMD)—a major threat to African livestock economies. Patented in early 2025, the vaccine offers cross-strain protection and could save Uganda billions in animal health and vaccine imports.

Dei BioPharma is also pushing boundaries in neuroscience with experimental Alzheimer’s therapies designed to cross the blood-brain barrier, one of medicine’s most difficult frontiers.

With patents secured and clinical protocols filed, trials for the company’s cancer and Alzheimer’s therapies are expected to begin before the end of 2025. Emergency use authorizations are under review. Meanwhile, its mRNA COVID-19 vaccine—stored in U.S. cell banks—is designed for rapid updating in response to emerging variants.

Though firmly rooted in Uganda, Dei BioPharma operates through global partnerships with technology leaders including Shimadzu (Japan), Agilent Technologies (USA), Cytiva (UK), FabTech (UAE), and United Pharmatek (USA). Their equipment and expertise have enabled the facility to meet stringent international standards.

Mainly because of the IP in its innovations, Dei Biopharma is now valued in excess of $3 Billion. The $1.1 capital investment is financed through a blend of shareholder equity, commercial loans, and government backing. A crucial $100 million credit line from Equity Bank Uganda helped jumpstart construction, while the Ugandan government now holds a 9.4% equity stake.

Political support has also played a key role. In 2021, Kenya’s President William Ruto, then Deputy President, joined President Yoweri Museveni at the project’s groundbreaking. While the move sparked speculation, Magoola is clear: “Their support was visionary and strategic, not financial.”

More than a commercial enterprise, Dei BioPharma is a deeply personal mission for Magoola—to make life-saving treatments accessible to all.

“Over six billion people can’t afford the cost of biological drugs,” he says. “A treatment for acute kidney failure currently costs $3,000. We can deliver it for under $100.”

This model challenges an industry long defined by exclusivity and high margins. Instead, Magoola envisions a system focused on access and equity: African-made medicine for the world’s underserved.

As construction continues on the remaining production lines and regulatory reviews advance, Dei BioPharma is preparing for its next chapter—scaling operations and expanding talent. Already Uganda’s largest private R&D employer, the company plans to create 40,000 high-income jobs.

The Matugga facility will also become a continental export hub, with capacity to produce over one billion doses of mRNA vaccines annually. It is on track to become one of the most important pharmaceutical centers in the Global South.

Magoola attributes much of the company’s progress to Uganda’s political leadership—particularly President Museveni’s unwavering support for science.

“Without his backing, we wouldn’t be here,” Magoola says. “These accomplishments belong not just to Dei BioPharma, but to Uganda—and to the idea that Africa can lead in science and innovation.”

As machinery powers up in Matugga and clinical trials near launch, Dr. Matthias Magoola’s billion-dollar dream is now tangible. More than just a manufacturing hub, Dei BioPharma is a beacon of possibility—a testament to what’s achievable when scientific ambition meets relentless resolve. Africa is no longer content to import medicine. It is preparing to cure the world.

The post Inside Africa’s boldest biotech bet: Dr. Matthias Magoola’s billion-dollar dream for pharmaceutical sovereignty appeared first on 256 Business News.

“It is really about some of my customers who would find it difficult going up all those stairs, in case the elevators were out of service,” he says.

The location of Equity Bank’s Ugandan headquarters is also symbolic of the lenders’ hybrid profile – banking the marginal customer, who is struggling to break free of the vicious pull of poverty; and the well-heeled, or blue-chip client with a decades’ old legacy.

During a sit down with 256BN, about the unit’s recent designation as a Domestic Systemically Important Bank D-SIB, by regulator bank of Uganda, Kituuka is philosophical, explaining how the milestone, was the logical outcome of the lender’s efforts over the years, to “transform lives, give dignity to people and increase opportunities for wealth creation.”

“It is really the hard work of the staff, the support of our customers, the guidance of the regulator, the guidance of the board and the guidance of our group that has led us to this position,” he continues with an air of modesty.

“But it all begins with purpose. As an organization we have tried our best to be relevant and to live our purpose, which is to transform lives. We offer integrated financial services or solutions that socially or economically empower customers, businesses and communities. I think in doing that, our impact has made us systemically important,” he explains, falling back into his customer-centric posture.

Equity has been a trailblazer, going down market and getting dirty, to assume risk in places that the industry has until recently, only treated with disdain. Where others saw an amorphous mass of people living on the edge of survival, through its prism, Equity only saw people with aspirations and dreams, that only needed a little push to turn into reality. Maximising the capabilities of digital technology and innovation, the lender has not only made millions bankable but also trusted them with vast amounts of money.

Every single day, the UGX 3.5 trillion bank digitally disburses UGX 10 billion in unsecured loans. The borrowers don’t have to walk to any brick-and-mortar branch to execute these transactions. “These are working capital loans given to small and medium businesses, people who can borrow money on Thursday and pay back on Monday, so that they could buy products from the manufacturers. We believe it was Equity’s life blood, via short term loans that met demand, which kept the economy going during the hard times of last year,” Kituuka says rather casually.

“So, you can see in a month we are doing in excess of UGX300bn and that is working like clockwork 24 hours a day. That requires technology and we believe we are one of the strongest digital banks and this is what makes us a Domestic Systemically Important Bank,” he adds.

It is not unjustified bragging. At more than 8000, the bank has the largest independent network of agents. Almost half of its two million customers, transact digitally. Around 95 percent of Equity’s transactions and value are executed through agents and digital channels, not the 50 branches. Our Equity Dduuka’s are everywhere and we now have 50 brick and mortar branches.

“It is that kind of presence, and numbers that make you systemically important. There are not many banks with that level of footprint, customer numbers and innovation,” Kituuka says for emphasis.

For Equity, growth has been exponential over the four years. From a UGX 1 trillion bank in 2018, Equity Bank Uganda reached UGX 3.5 trillion in assets last year. That propelled the lender to fifth position in Uganda by asset size; third by lending and deposits.

“So, you can imagine how many people are trusting us with their dreams, their aspirations, school fees, retirement funds, their profits and their returns,” Kituuka ponders.

While profit is the selfish goal of any business, Equity believes that profits should come as the dividends from facilitating business and economic growth. So, it chooses the points of its interaction with the economy rather consciously.

“If we want to improve agriculture and actually improve farmers capacity, the next logical step for us, should be to address manufacturing and logistics.  After that we have to think of where all this output is going to go. Equity Bank has a presence in Kenya, Uganda, South Sudan the DRC, Rwanda and Tanzania. We are doing trade and investment shows in these markets. We have been as far as Vietnam, trying to ensure that these new products being produced in Uganda have a market.”

The lender drives economic velocity by ensuring that the medium, small and medium enterprises that populate the value chains and the off-takers who buy primary producers’ and manufacturers output, such as the wholesalers and distributors are liquid.

“We must have solutions that empower them to keep getting better and better. Then we want to do this in a socially and environmentally friendly way. If we are banking schools, we want them to use energy efficient solutions. Agriculture must be climate smart.

“Our agenda is to ensure that we can reach more people. We have 50 branches but most of our transactions are not done in the branches, so we need technology because technology creates efficiency. That is why designation as a Domestic Systemically Important Bank, is a great milestone for us. It reaffirms the view of the regulator that of all the banks in Uganda, Equity Bank is very important and should not fail.”

While that comes with hawk-eyed oversight by the regulator and a need to beef up capital reserved by an additional 0.5pc of deposits, Kituuka is not fazed. “There are some responsibilities but heavy is the head that wears the crown and we are very happy to wear this crown.

“That responsibility is something we have been aspiring to because we believe we are ready. We have the systems, we have the people, we have the processes, the guidance and the capital.

Yes, there are certain things we are supposed to do in terms of capital buffers and we shall be subject to stronger regulatory oversight. But we have no problem being regulated because, we have scaled to a higher standard and we shall maintain that higher standard and even go higher so that people can feel safe in this complex environment. We are very sure that if we keep doing what we are doing, we will be able to impact lives, improve people from micro to small, small to medium, medium to large and from large to global. Being a Domestic Systemically Important Bank, gives us the right platform to pursue that vision,” he says.

It shouldering that additional burden, Kituuka is counting on a legacy of tip-top internal standards; asd well as the corporate culture and global outlook of some of Equity’s shareholders such as, the International Finance Corporation and Arise.

“The upside for us is that our D-SIB designation gives people confidence in the economy, it sends the message out there that the banking sector is strong.  If people are looking for a safe secure place to keep their money, I propose that Equity Bank is that place. If you look at our growth trajectory, our distribution, reserves, deposits, loans and our asset size, branch network and customer base, we have a solution for every one big or small and we treat everybody with respect irrespective of size.”

Uganda’s and Africa’s bankers have always had a tricky relationship with political imperative and agriculture. As a result, lending to agriculture has been thin and uneven. Recently however, Equity and a few other lenders have become more enthusiastic about banking agriculture.

Kituuka concedes that there has been a 360degree turn in the sector’s perception of agriculture and how to manage its risk profile. “The importance of agriculture to Uganda cannot be overstated. Its contribution to GDP and both formal and informal employment is huge. The challenges to agriculture are many but let me begin with the simplest one. Rain. I went to a conference recently and we were told that there were six problems with rain. It is either too much or too little, too long or too short, too early or too late. Those are the six challenges if your agriculture is rain fed. You have to address those problems or a different combination of those problems.”

In the Ugandan context, the drive is towards facilitating development of smallholder farming. In the past, banks have used manufacturers as proxies for lending the sector, because they were organized and had existing arrangements for funding farmers.

Nearly 40 pc of small businesses in Uganda are owned by women. Equity’s short-term on-demand loans, help capitalise such enterprises

“A manufacturer who is off- taking a product has proper structures. But the true point of impact should be at the farmer level, or the primary point of production,” Kituuka explains the convenience and deficiency of this approach in one breathe.

He adds that while the government had the Agricultural Credit Facility, tried to mitigate the perceived and real risks of lending to agriculture, the disruptions caused by the Covid-19 pandemic, were the eureka moment for the financial sector.

“Covid forced us to look inwards and ask some questions. We realized that an overreliance on imports, was making our economies vulnerable to disruptions in the global supply chains,” he says.

Lenders started to re-evaluate their approach to agriculture and discovered that they could catalyse the sector by enabling players focused on addressing the major pain-points such as pest control, inputs, poor mechanization, fidelity of inputs such as pesticides and fertilizers, and micro-finance.

“What Equity is doing under its Africa Recovery and Resilience Plan, is to look at the comparative advantage of the different countries. If agriculture is the competitive advantage of this region, Uganda can be the food basket for the region, Kenya can be the manufacturing hub and the DRC lead in extractives. South Sudan has the oil and can anchor energy. Everybody should do what they are good at, and we complement each other. Because equity is in all these countries, we can facilitate cross-border trade, the transfer of value and skills,” he tells 256BN.

The logic is easy to see. “Most of the manufacturing in the region is agro-based so, if you address capacity constraints in agriculture, you are addressing very many things in that value chain. Equity bank has set a target that 30perent of our loan-book will be to food and agriculture. Currently we are playing at 13-14percent, but within two to three years, the biggest chunk of our loan-book will be towards agriculture at the farmer level, the manufacturers, the logistics level and the exporter level. We are trying to create hubs, working with various bodies to ensure standards, offtake and value, are maintained at the right level; to ensure people bring in solar pumps, irrigation equipment, tractors and big anchor off-takers to ensure standards.”

Digital banking is the lever that has helped Equity to achieve rapid growth, by bringing more people into the financial loop. But it has not been without challenges. The industry has been in the news for a number of high-profile breaches and customers falling victim to fraudsters. It is a question that has been very close to Equity. Despite the hiccups, Kituuka says there is no turning back because the future is digital.

“We do realize we are operating in a digital economy, and a connected world where everything is driven by technology and digital capabilities. Here our engagements are around three things – onboarding customers, enabling them to transact, or informing them about opportunities. The best way of doing that to scale is going digital.  Our *247# USSD code allows you to onboard by yourself instead of going to a branch. Easy-stock allows you to borrow on your own. Easy-loan allows you finance whatever you want to finance up to 10 million shillings without coming to the bank.

“That freedom, convenience and choice, is what digital does -you are not restricted to the working hours of the bank, because things are happening all the time. At Equity we keep saying that a customer isn’t a customer until they are digitized. So, when you open an account, we ask for three things – a national ID for know your customer purposes, an email address and a phone number because that is how we are going to communicate with you, and it is how you are going to escalate and communicate anything about your account security. But because we have closed off loopholes elsewhere in the system, fraudsters have now turned to targeting customer vulnerabilities,” he explains.

At an industry level, Equity and other lenders have banded together with other stakeholders to launch a massive customer awareness campaign.

The aim is to try to educate the public “that if you go digital, you have several responsibilities. One, don’t share your password, two if you lose your device, inform the bank. In the past if you were robbed of physical cash, you reported to the police. If your phone is stolen, you will likely lose mobile money and digital money in the bank so, the first thing you do, should be to report to the bank on 0312327000, so that we can block transactions on that account immediately. We have a team that works 24/7 trying to monitor unusual activity on the account and we security-vet our employees. Equity bank is investing heavily in that, and constantly upgrading its systems, to close any vulnerabilities and we are working with partners such as the police, the telecom companies and UCC to apprehend these fraudsters who target our customers. Security is doing certain things; the banks are doing certain things and third-party providers are doing certain things, to ensure customers have the same level of comfort that their money is safe in the bank. Eventually we will root this out.”

According to Kituuka, while the industry has lost several billions of UGX to cyber fraud, it accounts for less than 1pc of the money that banks lose in one way or another. “I can tell you though, that in every bank, in every telecom, beyond credit risk and security risk, the highest risk we’re looking at now, is cybersecurity. If I give you a loan of 10million shillings and you default, my loss is limited to 10 million. And because it is secured, I may not lose all of it. With cyber fraud, someone can come into your bank and wipe out all your deposits or reserves in a. That is an existential threat because the fraudster could be anywhere on the globe. So, banks, telecoms and governments are continuously tightening to narrow the opportunity for cyber fraud.

“ And because there is no bank in Uganda with a digital footprint to match Equity’s, it is only natural that we shall be more targeted. But the problem is industrywide. Most of the time the successful attempts originate from the customer side, because the system identifies the customer by the PIN and we would not know that it is a fraudster transacting if the PIN has been compromised, and we were not informed. As a DSIB, we will not abandon digital because it is the future and we will continue investing in our digital capabilities. Yes, we get attacked but we will not relent, from our end we shall make sure the systems are safe and solid.

If there is a word to describe the past three years for the economy and banking in general, ‘dreadful’ is what easily comes off the tongues of most commentators. Kituuka is in agreement with the general consensus, but now, he sees light at the end of the tunnel.

“I can’t speak for the other banks but generally, 2022 was again a difficult year for the banking industry. As businesses were coming out of covid, we had the Russia-Ukraine situation. Then we had Ebola, which definitely had an impact. Schools and small businesses which were trying to recover were impacted. Because of that, and the end of covid relief measures by the central bank, the banks had to adopt a prudent stance about the prospects of some of these businesses coming back. You had to make a call on whether a business was still going to come back after several restructurings, or make some hard decisions in order to cut your losses. So, you might see certain prudence in income recognition and the outlook on certain assets, the loans you have given, and it will affect performance in certain areas. However, it is matter of choice, you either take the pain now or take the pain later. Different banks will treat it different ways.

“However, for 2023, it is still a complex, volatile, uncertain and ambiguous environment. Where we are sitting as Equity, we are going to combat volatility with vision, uncertainty with understanding, complexity, with clarity and a focus on the opportunities.

We are engaging our customer and sensitising them about the  risks of digital fraud. We are telling them don’t borrow more; actually, if you have too many assets, dispose of some, which are not earning for you. And people are moving in that direction. Overall, though, I am buoyant about future prospects and, I do believe we will grow market share this year.”

The post The Business Interview: Equity Bank’s Anthony Kituuka on how to grow by growing others dreams appeared first on 256 Business News.

Hadi Akoum is Airbus Vice President for Sales Sub-Sahara Africa and Southern Indian Ocean. Speaking to Michael Wakabi on the sidelines of Mauritius Aviation Day, Mr. Akoum argues that African airlines are increasingly aware of the operational and economic benefits of acquiring new and modern aircraft

Airbus has made what can be called a comeback in Africa because apart from a few airlines, you did not have much of a presence on the continent. What is behind the renewed interest in Airbus as demonstrated by recent victories at Ethiopian?

I wouldn’t call it a return because compared to the competition which has existed for a century, Airbus is a relatively young company. And traditionally in Africa, many airlines used to operate second hand aircraft. In the market twenty to thirty years ago, you were more likely to find aircraft from the competition, companies to which many airlines on the continent had a traditional relationship with. It took us some time to get a foothold here but Africa has become an increasingly technology savvy continent. When the  first airlines finally made the move to Airbus aircraft, they found them to be modern, efficient and reliable, in fact Airbus aircraft are amongst the most modern and technologically advanced aircraft available today.

 Who were the early adopters and to what extent did they influence their African peers to select Airbus?

 Most of them started with leasing second hand aircraft, those who could afford to purchase new aircraft began to order airbus aircraft. African airlines are increasingly aware of the operational and economic benefits of acquiring new and modern aircraft. Since 2016, we have witnessed Africa’s first A350 with Ethiopian Airlines followed by Air Mauritius. Air Senegal and Rwandair have ordered A330neo and Air Cote d’Ivoire was the first airline in the continent to order the A320neo.

 Airlines around the world are increasingly choosing to operate Airbus aircraft and if you look back to the past 15 years, Airbus market share was slightly higher than the competition in the market for brand new aircraft and that is why today we have an order backlog of over 7000 aircraft, which is higher than the competition.  

 Where do you see demand for equipment in Africa going in the future?

 Africa is an important continent with a growing population and economies that are also doing well.

The Airbus Global Market Forecast predicts that passenger traffic from and to Africa will increase by 4.9percent yearly over the next twenty years and therefore African carriers will need over 1,100 new passenger and freighter aircraft to meet this demand.

However airlines in the continent are not the only ones benefitting from Africa’s growth, in fact other airlines outside the continent are also serving the continent and aggressively growing their service.

How many Airbus aircraft do you have flying with African airlines today?

Today around 30 African Airlines operate over 237 aircraft, while several other carriers operate leased or pre-owned Airbus aircraft.  We are looking forward to many deliveries for African airlines in the coming years, Air Mauritius will receive the first of two A330neos later this year, Rwandair and Air Senegal who have also chosen the A330neo will receive it in 2019. We are also looking forward to deliver Air Seychelles A320neo and Air Uganda’s A330neo. I would say that today we have a presence in every country that has an aviation business and airline. Probably the only one where we still don’t have airbus presence is Kenya.

But Kenya Airways was customer you lost during the 2000’s?  

Indeed, nevertheless we believe our widebody family, the A330neo and A350XWB would be a great fit for Kenya Airways fleet expansion and modernisation.  This winning combination could offer the best benefits for the airline: on its side, theA330neo would have been a great choice for Kenya Airways. In fact the A330neos deliver percent fuel burn per seat improvement (and proportionally lower CO2 emissions) relative to previous-generation aircraft, such as the B767 and B777 – and also better economics than the latest competing new aircraft such as the B787. As for the A350 XWB’s, its all-new efficient design includes the latest and unique technologies improving performance in operation, competing with both the 787 and 777.

 Looking at the potential market for air services in Africa, one sees thin routes in many places. Embraer has around 150 aircraft here and Bombardier is also doing well. Airbus does not have a product in that range; is this a limitation to how much business you can do with the continent?

 We have recently partnered with Bombardier and now own a 50.01percent majority stake in C Series Aircraft Limited Partnership. The A220 fills an important niche – covering the segment that typically accommodates 100-150 seats – and responding to a worldwide aviation market for smaller single-aisle jetliners estimated at some 7,000 such aircraft over the next 20 years.

 Coming to the A380, one would think that its economies of scale would make it the natural choice on some of the trunk routes in Africa, why has no African carrier ordered the type?

 Many airlines are operating the A380 on Africa routes, Emirates serves Mauritius with the A380, you have a daily and sometimes twice daily Air France A380 service to Abidjan, and so many A380’s landing in Johannesburg every day. Abidjan and Mauritius are not big hubs and this demonstrates the A380’s capacity to operate wherever the traffic is good.

If you were to sell A380’s to an African carrier, where would your pitch begin?

 You have places like Nigeria where this aircraft can work well. South Africa where you see British, Airways, Air France and Lufthansa coming with A380’s.

Ethiopian has become a very enthusiastic Airbus customer, do you see them as a potential A380 customer in the future?

There are currently 58 aviation megacities (more than 10.000 long haul daily passengers) and within the next 5 years Addis Ababa will join the group and become an aviation mega city, these are cities which need very large aircraft like Airbus A380. The A380 is, in fact, the easiest and minimum-cost solution for airports to accommodate traffic growth. The A380 is a solution to air transport growth, capacity improvement, increased revenue, sustainable growth with minimal airport infrastructure investment.

The A330-800 neo has been a slow seller, what are its prospects in Africa and beyond?

The A330neo ( New Engine Option) programme –  which comprises the A330-800 and A330-900 variants –  had received 224 firm orders from 14 customers around the world, between its launch in July 2014 and the end of last month.  In a further endorsement of the aircraft by the aviation market, at Farnborough Airshow this year, Airbus received orders and commitments for an additional 42 of the aircraft – including two for Uganda Airlines.

The A330neo is the latest version of the A330, which is one of the most prolific, popular and versatile widebody jetliners in the history of commercial air transport.  The A330neo’s growing popularity is attributable to its technological advances, which include using the latest engines and wing design, to achieve enhanced performance.  As a result, the A330neo delivers up to 25percent fuel savings per seat and an overall cost advantage of up to 15 percent over its closest rival.

The A330 is the perfect aircraft for the African continent, the aircraft can efficiently serve markets on sectors from as short as 30 minutes, to over 15 hours flying time – making them true long-range capable aircraft, without penalizing their short-to-medium range regional operations. Indeed, the A330neos are probably the only new-generation aircraft which can cover efficiently the vast majority of widebody routes flown today in various passenger configurations as they also offer the flexibility to seat from around 200 seats up to 440 passengers for high density operations. 

Finally, how many active sales campaigns are you running in Africa now? 

I cannot give specifics but all I can say is that we have several campaigns going on in East, Central and West Africa. Am optimistic about the prospects in Africa because the continent has immense potential for aviation.

The post Coming of age, African airlines are taking a technology leap forward appeared first on 256 Business News.

Amne Suedi said although the East African market has several common features, each country has individual characteristics that do not accept the one-fits-all concept when it comes to investment.

Between October 24 and 25, she will be at the Sandton Convention Centre, Johannesburg along with hundreds of other participants, for the inaugural ICE Africa, which is set to provide regulators and operators with an ideal platform to discuss the gaming industry on the continent. Below are excerpts of her interview.

Why is there such a focus on Africa at this time?
As a lawyer specialising in investment in Africa and being very active in the gaming industry in Africa, I think this is an investment area that has a lot of potential to grow further and to have an even bigger impact on the countries that welcome this type of investment in terms of job creation and of course the revenues that can be collected by the tax/government authorities. Governments in Africa can leverage a lot more on this industry as they can divert the earnings into development of sports, entrepreneurship centres, and so on.

Where do you see the big wins for the industry in the coming months?
Currently the East African market is very exciting in terms of opportunities but also the regulatory space is ever changing as legislators try and keep up with technology. Representing companies in Tanzania, Kenya, Uganda I can say that these markets are smaller than say the Nigerian market, however with an immense growth potential. Definitely, there is room for coming in and making a mark. I believe that the recent legislative changes in Tanzania and Kenya and the imminent ones in Uganda should not dissuade investors. There is always room for engaging with legislators and with planning and a sound, reasonable strategy, investors can achieve legislations that are not perfect (that does not exist), but which are balanced and at least meet their investment requirements half way. It has worked in other sectors, so there is no reason it cannot work in gaming!

Who is currently targeting the market?
The type of investors we see particularly in East Africa are not your typical household names in gaming like Ladbrokes, GVC Holdings, but more entrepreneurs who are going into gaming for the first time in Africa because of the market and huge potential for returns. I think a lot of people have to change their perception about investments in Africa. Like everywhere else in the world, if you want excellence you have to pay the price! It is not any different in Africa.

What’s the best place to start for operators looking to work in Africa?
How to invest would be to seek a good legal counsel who can walk you through the process. There are not so many experts in this field however firms like Shikana Law Group have a proven track record of successfully engaging with regulators and setting up sound investments in the gaming space in East Africa. You also need to have a very good understanding of the market you want to operate in. It is a mistake when investors feel like they can use the same capital and business model in Kenya as in Tanzania or Uganda since all these markets are very different. For example, investing and launching mobile gaming in Uganda would be most likely a disappointment since retail gaming is what is preferred by the Ugandan punters. However, retail is becoming less and less in markets like Tanzania. Of course, there are capital requirements and I always get surprised when certain foreign investors feel like they can invest $50,000 in gaming and get phenomenal ROIs while they are ready to invest at least $1 million in their home countries.

What’s your top tip for those interested in doing business in Africa?
I think the number one advice I can give to investors coming into a country in Africa to invest is – forget what you know from other markets and treat each market as separate entity and do not compare.

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Question: The new football season is underway with the English Premier League kicking off last week and other major leagues around Europe soon to follow, what makes this season better than previous season’s for DStv subscribers?       

Answer: This is arguably the biggest season yet for many of our subscribers to follow all the leagues they love. We have stopped at nothing to ensure that we enhance the viewing experience from the previous season with the return of the Italian Serie A on our platforms. Christiano Ronaldo’s timing of joining Juventus couldn’t have come at a better time for our subscribers to follow one of the greatest footballers of our time. Starting this season, we have doubled our match offering to our DStv Access and Family subscribers to two games per weekend of the Premier league, La Liga and Serie A,  so that they get double the dose they are used to. We have ensured that all the football that matters is on DStv and we are committed to ensuring our subscribers get non-stop entertainment on our platforms.

Nakabazzi says DStv is at pains to see that their customers’ viewing experience of all things football has been enhanced compared to the previous season.

What can DStv viewers expect to watch on the football channels?

The popular 24-hour Premier League channel will continue as standard on SS3. The breadth and depth of the coverage will include first-class Premier League TV build-ups with respected analysts. Overflow games will be on SS5/SS6/SS11/SS12. La Liga will be on SS7 and Serie A on SS8 whilst other games will be SS10.

How many matches will be available on DStv this season?

DStv  will showcase all 1140 matches of the new football season: 380 Premier League matches, 380 Serie A matches and 380 La Liga games with most of the matches from each league broadcast live on SuperSport. For the Premier League, SS3 will showcase the most popular matches of the day while the rest of the matches will be featured within the next 24 to 36 hours. For La Liga, SS7 will showcase the most popular matches while the balance of games will be on SS10 on an either live or delayed basis within the next 24 to 36 hours.

Will the Premier League and La Liga still be available to Compact?

Viewers can still follow one of the world’s most talented players when Ronaldo begins the latest phase of his illustrious career with Juventus.

Yes, the Premier League and La Liga will continue to be available to DStv Compact customers on SS3 and SS7. We have also improved the Compact package with the edition of Serie A games.

What about your DStv Family and Access customers; will they get a chance to watch any matches in the new football season?

Yes. DStv Family customers will get 450-plus games per year and Access customers will get 220-plus games per year. Both Family and Access customers can enjoy the best of local and some international football matches which includes international friendlies plus  select Premier League games on SS10.

Are there any exciting local promotions that will be running in line with the new football season?

We have an exciting ongoing retention campaign where we are encouraging our subscribers to pay their subscription before their due date so as to inculcate a behavior of paying in time. As a result of their loyalty we shall offer our DStv access and family subscribers one week of compact sport, our DStv compact and compact plus subscribers will get one week of premium sport for paying in time sot that they can be exposed to more sporting action especially during this season. We can only encourage our subscribers to embrace this offer and be rewarded as a result.

In terms of innovation, how has DStv positioned itself lately?

We are proud of the fact that our technology is second to none and have stopped at nothing to ensure that we offer superior technology is in line with today’s trends. Our DStv Explora decoder offers the best viewing experience in the market for subscribers to have full control of their viewing experience, allowing subscribers to rewind, pause and record live television. The Catch Up feature best applies to subscribers who may have missed out on their favorite programs to review and catch up a wide array of genres on our feature.                                                                              Our BoxOffice application permits subscribers to rent the latest blockbuster movies at just UGX 8,000(just over $2) per movie from the comfort of their home. The Explora decoder definitely offers a unique, satisfying experience to our subscribers.                                                                                                                                                                                      With DStv Now, our online version of TV, subscribers can watch TV on the GO by simply downloading the DStv Now app on their android or IOS enabled phones at no extra cost provided they have an active subscription at home or in their office. With DStv Now you won’t miss a minute of your favorite local and international channels even while subscribers are on the move. It’s practically DStv wherever you are as a subscriber.

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MacTavish says Uganda has much to offer, but even a country like Nigeria with far less wildlife, is doing much better in showcasing itself to the world.

May 19—Kelley MacTavish, well known in the industry for her enthusiasm in promoting Ugandan tourism, says business is not bad, but could be better if all concerned beat the welcoming drums even louder. As the Managing Director of Pearl of Africa Tours and Travel Limited, she is someone who has no qualms about speaking out when she sees there is something wrong, like the taxes that work against the interests of the industry. Currently Uganda’s earnings from tourism are slightly over a billion US dollars annually. Below are excerpts of what she told 256BN. 

In your opinion, what is the state of tourism in Uganda today?

Answer: A lot better than it was five years ago, but it could get even better as Uganda wins accolades from tourism gurus like CNN, Lonely Planet and National Geographic. But it is not enough, because there is need for more to showcase what is on the menu of attractions. Marketing a destination goes beyond tourism fairs in Berlin or South Africa’s Indaba. Uganda Tourism Board (UTB) could do better. There is need to link hands with the private sector. For example, the famtrips (familiarization trips) held early this year, needed a post-mortem to perform better next year. Positive criticism is good for improvement.

Is government doing enough to boost visitor volumes?

It is doing something, but there is need for a lot more consistency like Rwanda and Kenya to have an impact. When gorillas are mentioned, the mind jumps to Rwanda. The challenge is for Uganda to beat their drum hard, especially now. Tell the world that the gorillas in Uganda are similar to those in Rwanda. The only difference being, cheaper tracking cost of $450-$600 compared to $1500 that is charged in Rwanda. Travelers need reminding that there will be no price change in Uganda, in the near future. Tourism is very sensitive when it comes to market price.

CNN Travel, Lonely Planet and National Geographic have raved about Uganda’s natural beauty, but MacTavish thinks there should be no let-up in marketing.

What can be done to have numbers edge perhaps above Rwanda, Kenya, Nigeria and Tanzania?

Exploit the existing opportunities to capacity. There is The Queen of Katwe movie. Then Olympaid Kipsiro, Kenzo (a popular musician) and Big Brother celebrity Gaetano. None has been used to drum up existence of Destination Uganda. Instead, South Africa and Kenya are exploiting their potential. Nigeria without the attractions Uganda has, is doing better, selling their destination using musicians and the movies shot there.

What do you have to say about Rwanda increasing their gorilla tracking rates?

It is time for Uganda to tell the world they are the alternative. And that the ones in Uganda are as gorilla as one can be. If they have been marketed as attractions once a week, then UTB must do it 57, 000 times! Rwanda has done a good job marketing the gorilla through social media, on board the national airline (Rwandair); you name it.

Do you have any comments about taxation in the tourism industry?

If we are to continue winning the price wars, the tax regime ought to be revamped especially for upcountry hotels. This is because from the moment a visitor sets foot in the country, they pay tax on everything consumed. This is never refunded as is done in other countries. This undermines the Uganda experience packaged with hospitality, lots of adventure, challenging mountains, water bodies and wildlife.

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Kayondo says foreign involvement in petty trading remains a deep thorn in the KACITA’s foot and suggests these investors should be in such areas as construction and manufacturing instead

Evaristo Kayondo is not a man who runs away from a fight and as Chairman of the Kampala City Traders Association (KACITA) there is always a battle somewhere. Inflated rents, unfair trading practices, illegal evictions, endless tax wrangles and guerrilla warfare with street vendors; these are some of Kayondo’s main frontlines. KACITA was first registered in 2001, basically to champion the interests of small businesses in Kampala’s capital.

Things have been particularly difficult during recent years. Uganda’s economy did not do very well in 2016, with GDP growth falling below 5%. Many KACITA members took on debt and are desperately looking at people like Kayondo to intercede with the government and find solutions to their problems. Several are already facing the imminent lost of their property to the banks.

But although sympathetic, the avuncular-looking Kayondo is not a superman. However he does think there are openings where the government can implement economic policies that could favourably influence local business people. Instability in South Sudan, Uganda’s biggest export market, has drastically affected sales and at the moment there considerable soul-searching.

“Right now the business environment is not that conducive. Purchasing power for our customers is down, interest rates in the bank have continued biting and landlords are increasing rent. Majority of our business community do not operate from their own premises; they work from rented premises which means that whenever there is an increment in rent, it affects them,” he told 256BN.

Kayondo said, “With the closure of Crane Bank, there is now another problem, because Crane Bank was the biggest lender for most of these property developers.  We have been told that dfcu Bank (who bought some Crane assets) has come up with different repayment arrangements, very different from those previously agreed with Crane Bank.”

“I think this has put a higher pressure and demand on the landlords. So in trying to recover and make ends meet, they have pounced on the tenants and the tenants are suffering the full weight of this. So at the end of the day, the traders are crying, landlords are saying they are also not safe, because their properties are on the verge of being taken,” Kayondo said in explaining the current uncertainty.

He suggests that everybody takes a step back. “So under the current circumstances we are operating in, we invite all stakeholders to be very cautious on what steps they are taking because it might be a self-defeating step. You might think it is a solution for you, but at the end of the day, it might again cause more problems. For the financial institutions, they need to be very cautious as they recover loans to prevent accumulating more non- performing loans (NPLs). Landlords need to be cautious as they pounce on tenants, because the same tenants have their own problems and some of them have taken loans to do business. The situation is bad because everybody is looking at their client as a solution to their predicament which should not be the case.”

Kayondo believes the entire economy needs revamping and wants the government to do something quickly otherwise Uganda may go into a depression. He thinks current interest rates are still high even though Bank of Uganda has been edging the Bank Rate lower since late last year.

Holding General Elections in 2016 also opened up a mixed bag of problems for business. “An election year usually comes with a lot of uncertainties and many people live in panic unsure of what will happen next. People are usually very fearful to transact and this affects the recovery of the economy,” Kayondo told 256BN .

He said, “Sometimes elections also come with excess liquidity, because a lot of money is being poured in the public and the politicians are also pouring in money which is not backed by productivity and this usually distorts the economy. That distortion takes a lot of time to be eliminated because it creates artificial demand on some items and at the same time it does not reflect well the true business environment.”

Kayondo wants the government to spend even more on investment projects and ensure that the borrowed money is absorbed to capacity within the given timelines without diverting it to recurrent expenditure.

“Let the government stop increasing the administrative expenditure by reducing the number of districts being supported, the size of the parliament and also the size of the cabinet and also reduce on the many administrative centres, because they create unnecessary burden to the tax payers and do not offer much return. Government needs to tighten its belt and reduce on unnecessary expenditure,” he said.

He adds: “And as the government spends on investments, it should procure locally, because much as we are advocating for buying Ugandan products in order to build the nation, the government is the biggest spender/buyer in the economy. But it is not buying enough locally produced goods.  This harms the economy and  negatively impacts on the confidence of local investors.”

Kayondo has strong views on Kampala Capital City Authority (KCCA) and its role as an enabler for business. “If you do not protect those who are genuine in business, KCCA will be the loser since we are the feeders of the Authority. It is wrong if you do not protect our businesses and subject them to unnecessary competition from those who are not paying anything to coffers of the local authority.”

He is also straightforward when it comes to street vendors who occasionally steer customers away from shops operated by KACITA members. When asked whether KACITA has any sympathy at all for vendors, bearing in mind many KACITA members also started this way, Kayondo said, “Starting small is not the problem and it is very key and is the best way to do it but our advocacy is slightly different. We are advocating for people starting small, but operating from legally and gazetted places. But if you start small and operate from non-gazetted places, then it becomes a problem.”

The manner in which thousands of Kampala street vendors were evicted by KCCA enforcement officers was not totally to KACITA liking though reading the newspapers at the time, one would think it was. Kayondo clarifies. “The eviction had some problems. Much as they were operating from non-gazetted places, they needed more time. KACITA was thinking about giving them three months, they were given one month which was not even respected, they gave them about four days and they never got a chance of relocating,” he said.

Foreign involvement in petty trading remains a deep thorn in the KACITA’s foot. “Not only Chinese, all foreigners should not be allowed to do petty trade. Let them be restricted to areas where we Ugandans, are not doing well. Foreigners should engage in the construction sector, like building hospitals, hotels, schools and go into manufacturing or airlines because it is in those areas where we have not perfected the game. But petty trade should be ring-fenced for Ugandans so that the locals can also have an area where they can at least absorb the use and operate without subject to competition,” Kayondo told 256BN.

You would have thought that a man who has led KACITA for a substantial period of time will easily slip into politics and walk the national stage, but not Kayondo.. “Politics is for people who are supposed to serve the nation.  But in Uganda, it is the reverse and it is looked at as a job. If I was a job seeker I would go for politics but I am not a job seeker. Again if it was for those who have reached self-actualization, maybe I would consider it. But now it is considered a job and not a service for the people,” he told 256BN.

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KAMPALA, MAY 21 –  It may not be very accurate to call Paul Isaac Musasizi an accidental engineer but that description is not so far off the mark. The chief executive at Kiira Motors Corporation and team leader of a group of young driven Ugandans trying to get their country a berth in the global automotive industry chose to study mechanical engineering just to spite a domineering father who wanted him to pursue a career in medicine.

“I used to do very well in Biology but it was now my turn to show that I can make my own decisions. I am glad I went for engineering especially mechanical engineering which had scarcity in the country and yet it is the foundation of manufacturing and therefore economic development,” he tells 256BN.

In 2007, Musasizi veered from his teaching job at Makerere University’s College of Engineering to join Professor Sunday Stevens Tickodri-Togboa, now Minister for Science and Technology, to begin work on Uganda’s first electric vehicle the Kiira EV, unveiled to the public in November 2011. Since then two other concept vehicles – the Kiira EV Smack hybrid electric- ICE (Internal Combustion Engine) passenger sedan and the all electric Kayoola Solar Bus have been produced. It is the latter that has caught the rave and is this month featuring as the Green Mobility exhibitor at the UN Sustainable Innovation Expo that is running on the sidelines of the United Nations Environmental Assembly in Nairobi.

While some doubt the wisdom of his quest into an industry whose future is the subject of intense debate after 130 years of existence and the automobile always at the centre of any discussions of a rapidly warming planet, Musasizi sees this as Africa’s moment.

After missing out on earlier phases of the industrial revolution, he sees the current challenges to sustaining earths’ civilisation as Africa’s opportunity because with innovation, the world is just a stage on which the talented can play. Besides, driving is not about to die as the aspiration for a majority of people for decades to come and meeting this need in an environmentally sustainable manner can propel former underlings such as Uganda to the high table of the global automotive value chain.

“The motor vehicle will remain as the predominant transportation technology not only in East Africa but globally for the next 50 to 100 years. That is because mass transportation systems, much as they are economically and environmentally efficient don’t quite address the last mile. We have had so many debates about alternatives such as non-motorized transportation, tricycles and things like this but the last mile especially in Africa is still significant,” he reasons.

The Kiira-EV-Smack

From his vantage point he sees that in many places today, when one gets off the bus or train at the station, they still have one to six kilometers to get home, or to the office. In Africa, farm produce still has to be conveyed to markets from places way off the main infrastructure grid.

“The motor vehicle is going to be a critical ingredient of the solution to that problem. The movement of people and goods is a critical ingredient of economic transformation in Africa and what we in East Africa are saying as a community is how do we harmonize interventions that will advance value addition in the automotive industry value chain and how do we create the policy framework that ensures that it is rationalized?”

While he is the first to admit that he is not reinventing the wheel Kiira Motors is up against an already established pecking order in the automotive industry, its value proposition is premised against the two core gaps in the industry today; affordable asset financing for vehicle financing and after-sales service and support.

“Our interventions will focus on closing these gaps as the key strategy for market share acquisition. From a policy perspective, it’s important that issues of technology quality especially safety and environmental protection are addressed which will inadvertently give rise to a roadmap winning off importation of rather obsolete vehicle technology and sub-standard spare parts. Such interventions are expected to cultivate growth of new vehicle sales. Production for export to the EAC and neighboring regional economic communities is a key ingredient of the growth plan for sales.”

So where does a solar-powered bus fit into all this? The pollution mess that Africa and the world’s major population centres are today, and the potential for a zero tailpipe emissions transport solution in this setting.

“The aspiration for green, clean, and noise free transport solution for urban mass mobility and enhancing environmental stewardship inspired the making of a solar powered vehicle. The sustainability of mission vehicles made in Uganda is based on production of eco-friendly and internationally acceptable technology and products for global competitiveness,” he says adding that the Kayoola Solar Bus prospects a green, clean, and noise free transport solution for urban mass mobility, representing a commitment to transportation technologies that enhance environmental stewardship.

The Kayoola Solar Bus is a zero emissions public transport vehicle

The Kayoola Solar Bus uniqueness is evident from the commitment it represents for Africa to championing urban mass mobility solutions based on clean and green technology.

Africa’s geographical position almost symmetrically along the equator implying non-stop sun around the year provides an underutilized natural and renewable energy resource which should be explored to fuel urban mass mobility.

Kampala, where Musasizi resides is enough inspiration for him.  The use of private mobility automobiles is significant in the city and this is placing a big traffic burden on the limited road infrastructure.

Kampala has a mass mobility system that mainly utilizes 14-Passenger vans for intra and intercity mass mobility.  The Projected mass mobility demand growth in the city is estimated to be five times in the next three years, exceeding more than 700,000 passengers per day while the neighboring routes feeding into Kampala such as Jinja, Entebbe, Masaka and Bombo road are expected to have 500,000, 200,000 and 300,000 passengers per day respectively. Kampala Capital City Authority has an existing demand for at least 500 buses for its major routes. The Kayoola Solar Bus promises a green, clean, and noise free future transport solution for a busy city like Kampala and other urban Centres in Africa. With nonstop sun in Africa the use of solar powered vehicles for mass mobility is the way to go for urban mass mobility.

Kiira Motors will start production of motor vehicles in 2018 with a product mix including Pickups, SUVs, Sedans, Light and Medium Duty Trucks and Buses. The first batch of Vehicles will be running on fossil fuels with an Internal Combustion Engine. However, the Kiira Vehicle Technology Program will continue exploring Green Mobility Technology for Africa with the hope of having vehicles like the Kayoola Solar Bus on the road in the 5-10 year period depending on how fast the charging and support infrastructure for EV Power-trains can be developed.

According to Musasizi, the concept vehicles so far developed demonstrate progressive enhancement of resident capacity in vehicle manufacturing. Production will start with 305 vehicles in 2018 and it is envisaged that by 2021, production would have reached 1,125 units annually.

So how long will it take the African indigenous auto manufacturing industry to competently rival those of the western world?

The goal at KMC is to respond to the indigenous needs of the African people in the automotive Industry he says. “If we can achieve this and solve the problems barring the African auto industry, we shall be the biggest players in a virgin territory with a growing market and that alone is competition enough.

But we also need to appreciate that we are not going to reinvent the wheel, the days of Lord Ford and Sir Bentley and William Maybach are kind of gone. Now what we want to be able to do is to recognize that these very well established people also have tested technology and it is not going to be very easy to convince the client here who can get tested technology to abandon it and try something new until it works. That is why the strategic alliances become important. They are looking for a market and we can cultivate mutually beneficial partnerships. “

The Kiira Motors Corporation Complex, being developed in Jinja 80 kilometres east of Kampala, is expected to contribute to the Ugandan government’s drive to reduce poverty and bring about socio-economic transformation by creating a number of direct and indirect employment opportunities throughout the local, regional and national landscape. In the capital expenditure phase, KMC is expected tol create over 12,000 Jobs while the operational expenditure phase shall create another 2,000 plus jobs.

“KMC’s operational effects shall also provide an affordable mix of vehicle products; create employment opportunities with varied skill levels; encourage private investment opportunities in local companies providing support to the emerging automotive industry; lead to an ultimate boost to economic development and GDP growth,” Musasizi believes.

For all his ambitions Musasizi suffers no illusions. He knows the road ahead will be a long and twisted one. For instance he knows that until he has achieved volume, it will be foolhardy to embark on certain aspects of production just for the prestige of it.

“One of the things we need to appreciate is that even the infrastructure that delivers these facilities depends on sales milestones. If you cannot produce 5000 vehicles you cannot support a fully-fledged paint shop. If you cannot produce 15,000 vehicles a year, you cannot support a fully-fledged body shop. You can have a few of those functions here and there being done rudimentary but the economies do not work very well and we have factored all those aspects into our work. That at this point we should be touching 5000 units, this point you should be touching these units so that you can move from Semi-knocked down in terms of your manufacturing process to Completely-knocked down. On the other hand innovation grows because as manufacturing is going on one track, on the other side innovation is also on going. It is very critical and that is why I will again re-echo the point of us tapping into the global market and pushing our product there.”

It makes sense. The Nigerians have expressed interest in the Kayoola solar bus but without strategic partnerships with established original equipment manufacturers, KMC would be hard pressed to deliver it to market fast enough.

“The Nigerians are interested in partnering with us so that they can scale it up all over Africa because here, we have mature electric vehicle technology. The value of these concept vehicles is to attract the right partners,” he concludes.

The post The Business Interview: Paul Isaac Musasizi, man on the innovation trapeze appeared first on 256 Business News.

Keith Kalyegira, the Chief Executive Officer of Uganda’s Capital Markets Authority sees one key differentiator between equity and debt – one is patient, the other is not – he tells 256 Business News.

The primary challenge facing capital markets development in Uganda he says is the fact that the people who need market based financing are not aware of its benefits. If they do, they cannot come to terms with the fact that they would need to give up part ownership of their businesses and open up to probity in order to raise capital from the markets.

“Many people don’t want to have outsiders looking into or be part of their affairs even if it is to have access to patient capital. Essentially Equity is like a long term loan, once I sell you my shares I have received your money but I pay you back when I have made money and I give you dividends. It is only payable through dividends; it is a permanent loan that is only repayable through dividends. If there are people who need their cash preterm for any reason, they can sell their shares to someone else. That is the whole essence of capital markets.”

That aversion to probity partly explains why the Ugandan economy’s financing structures are heavily bank based. Once a client has provided security, banks will not demand more disclosure yet for the capital markets, more disclosure is required so that investors are comfortable and know what they are buying into.

“But going public also creates more financing options, because it shows that you are subject to probity, you are upholding good corporate governance standards and practices so you should be able to attract cheaper financing,” he says.

Be that as it may, many Ugandan enterprises have matured to a point where they are already public by default but enjoy offshore connections that give them access to cheaper capital. Take MTN Uganda for example, a public investment company that should have nothing to hide because it is already listed in its mother country, South Africa. But this gives the multinational access to cheaper sources of capital and perhaps even in larger quantities. So generally, multinationals have no incentive to go public locally in their operating countries because many of them are public in their home markets.

For that reason, Kalyegira and team are looking at large to medium scale Ugandan companies that have prospects for growth, companies that are turning over annual revenues in the region of $10 million and above.

Debt Vs Equity

The challenge for him is that players in that league have access to cheaper money offshore so convincing them to switch from debt to equity is always going to be an uphill task.

“That is true because in a situation where equity investors are assuming more risk, their expectations in terms of return on investment may be higher than those of a straight forward lender. But getting equity injected into a business helps to reduce the cost of financing which boosts profitability. That is what Umeme did, they chose to go for equity, paid off expensive debt and profitability was boosted almost immediately.”

So does Uganda need a credit crisis of significant proportions before the many eligible enterprises can be driven to list?

“There has to be a major constraint to bank financing which doesn’t seem to be about to happen because private sector credit is still quite low compared to other countries in the region and other parts of the world,” Kalyegira says pointing to the fact that the state is already the major taker of bank finance.

Uganda’s stock of domestic credit is worth about Ushs 8-9 trillion per year which is roughly 50 percent of the total money supply. However, private sector credit remains minuscule because banks are more incentivised to lend to the state as opposed to the private sector through high returns on government paper which is more secure for them.

It may sound basic therefore but awareness appears to be the major challenge facing capital markets development in Uganda.

“People are simply not aware of the benefits of stock markets and I don’t think we have enough foot soldiers out there making people aware of the potential benefits. And you also have to be sure that the foot soldiers know what to say to potential issuers to make them realise that it is a plausible alternative.

“People are simply not coming forward and I don’t believe that all people who need to know already know about capital markets as a source of financing. People are so used to bank forms of credit and financing and looking at the past where banks have taken over the assets of businesses, people are quite shy to grow too fast because growing fast means mortgaging more of your business. So they try to grow within the resources generated by the business which is not really the best way if you want to grow a business because it is not fast.”

Market based financing would allow them to finance growth without being put under pressure to repay debt but many remain married bank credit despite its cost.

A secondary challenge is the high level of involvement by the state in the capital markets as it tries to raise money for development, which in turn raises the cost of financing.

Under normal circumstances however, that should be an incentive for listing because if bank financing is expensive, businesses should look for cheaper sources of capital or if not cheaper, more patient sources of capital which is what the stock markets offer.

As a regulator, Kalyegira presides over one of the most underdeveloped and shallow capital markets on the continent. That puts him in the awkward position where he must carry the whip and yet superintending over the markets development.

“That is normally a conflict in itself but not unusual,” he says. “Most third world regulators face that conflict because they are presiding over underdeveloped markets and so by default find themselves having to play a developmental role.”

In Uganda’s case, the CMA’s development mandate is written in the law because the regulator also doubles as the line minister’s immediate advisor on all matters related to the development of the capital markets. Either way, it does not remove the conflict in roles because the person who is working to attract market based financing is the one that must regulate his customers.

It works but at it leaves some discerning investors wondering whether the regulator will be impartial in enforcing regulatory action.

“We are very mindful of that conflict but it is not something we are alone face, it is faced by many regulators around the world and one thing we are doing is to make sure that increasingly, the intermediaries’ we license are empowered to play the development role,” Kalyegira explains.

Developing Uganda’s capital markets is something Kalyegira approaches with passion. The CMA has for far licensed 8 brokers but only 3 to 4 are active at any one time. A few initiate transactions but most are just traders; while the others are more specialized in corporate finance trying to initiate market based financing transactions. That is the reality he faces and stimulating more activity in the market is a continuing challenge.

Still he remains optimistic. The Uganda Securities Exchange has just got a new Ceo who doing is a lot to try and grow the market. The USE went electronic opening to a future of instant settlement.

Kalyegira’s refuses to allow the domestic situation to cloud his vision of the future of capital markets development in Uganda.

“If am looking at the domestic market, I am seeing a limited market but looking further afield in the context of regional integration, you see firms that will want to grow output to supply a larger base. If you are a company that is trying to grow rapidly, you need patient capital more than those that have reached a certain stage of growth and just need working capital.  If you are looking at capital for expanding capacity and sometimes you are not sure when your expansion is going to transition into revenue, patient capital will make more sense.”

A question that is less explored is the role divestiture could have played in stimulating activity on the USE. During the nineties to the early 2000’s, the state divested from many enterprises and a number of them continue to do robust business today. Apart from Stanbic Bank and Bank of Baroda which listed part of the public stake on the local bourse, others have not been forthcoming. In some cases, the private partners invoked preemptive rights to push the state into ceding the public stake to the other shareholder.

The state divested from Barclays, Tororo Cement and Kakira Sugar on condition they were supposed to list in 5 years time but this has not happened. While Kalyegira believes the government needs to push for these listings to take place he does not see it as the solution.

“We missed the privatization boat but fundamentally, you cannot hope to rely on government induced listings to grow the market; the private sector needs to see the benefits. The government has led and capitalized the markets up to this point but the private sector needs to take over.”

Amidst the clamour for more local content in privatized enterprises, Kalyegira sees a possible compromise. The National Social Security Fund could acquire stakes in those companies such as Tororo Cement, Barclays Bank and Standard Chartered Bank where the state still has a stake. Ugandans would then have a stake through such intermediaries.

That would bring some relief to NSSF too because the challenge for the provident fund right now is that savings are growing faster than investment products. That means if nothing changes, you will have money seating idle in bank accounts.

So under such circumstances, what was the rationale for licensing a second exchange ALTX, when the USE is still groping for a hold?

“On the face of it the prospects for a second exchange in a small market might appear bleak but usually the private sector sees what we in the public sector sometimes don’t see. So they saw an opportunity, they want to take advantage of technology, some of their shareholders are people who have started and sold exchanges before, and I think they have got a pan African vision. They are looking beyond Uganda although it is the starting point where they want to be coming with alternative products such as depository receipts and other traditional products like equity and debt if they can get hold of them.”

An East African Stock Exchange?

As East African economic integration deepens, the regions institutions have been trying to keep pace, visualizing operational scenarios in a border-less economy. For the start, work has been ongoing to harmonise the rules that will govern the capital markets in the new economic space.

“That process has been going on for some time and it is progressing well. To a large extent most of our regulations are similar and what we have been going through is a process of developing directives that should inform any future changes in our legal frameworks. As and when we get to a point where we have one stock exchange and one regulator, remains the ultimate destination but in the meantime we work very well together.”

Currently there is an ongoing project to try to link the securities central depositories of the exchanges. “The major remaining challenge is currency conversion across borders because even if you trade you have got to settle in different currencies. And the spread between different currencies’ can cause a potential loss of anywhere between four and eight percent at conversion. That is kind of a deterrent unless you are a medium to long term investor.”

Kalyegira believes the East African Monetary Union, anticipated from 2024, will resolve that dilemma and it will be possible to have similar trades across the region. That should also generate a lot more activity compared to today where the eight cross-listed companies hardly trade because of the incompatibility of the Security Central Depositories that are for now not talking to each other, leaving cross border processing  to be a mere expression of intent.

It is envisaged that when the EAC stock exchange finally gets into place, the existing stock markets will become shareholders in a single regional bourse. Depending on where it is headquartered, Kigali, Kampala, Dar or Nairobi for that matter, will be there as satellite boards of one exchange. That means that rather than marketing 8 cross-listed stocks, the market will have upwards of 85 -90 stocks across the region.

“It will be a much better proposition because you will be looking at a regional pool of savings for institutional investors. It will be good for investors, especially foreign investors who will be looking at East Africa as an asset class as opposed to the different countries.”

Current boundaries not withstanding, Kalyegira says inward investors have been the most active players in the Ugandan market and there was a year when foreign investors dominated trading on the USE especially on counters such as power distributor UMEME.

“Foreign investors see value in our market because they are looking for yields which they can’t find anywhere else. Our market is also attractive because we have an open current account. Tanzania recently opened up and you can see a pick-up in turnover and liquidity, so it is a good thing and we shall be doing everything as a country to ensure that that remains the case from a macroeconomic and political perspective.”

Unit Trusts

Despite the fact that a Collective Investment Schemes law has been in place since 2003, that stream remains earthbound. The regulator is still trying to understand why Collective Investment Schemes have not taken off with the few companies that started unit trusts subsequently closing shop.

Kalyegira thinks the failure has more to do with how unit trusts are sold to retail and institutional investors.

“There are only 3000 Securities Central Depository accounts in Uganda and yet quite a pile of money is held in savings accounts. If people were aware more would be investing in government securities,” he says pointing to the consistently high returns on the USE.

“About four counters have consistently given a return of more than 16 percent annually since they were listed. For some, the return has been as high as 28 to30 percent annually. Inevitably, there are some counters that are struggling but unit trusts are about diversification so that should not be much of an issue.”

So what are the short to medium term prospects of Uganda’s capital markets? Kalyegira is optimistic. He sees market capitalisation as a proportion of GDP reaching 20 percent from the current six percent.

“We hope to see a greater number of competent licensed intermediaries who are participating in the stock market and an easier and more flexible regulatory framework including a more flexible Collective Investment Schemes  law to facilitate savings; and more awareness generally about the benefits of the capital markets.”

The post The Business Interview: Keith Kalyegira and the Gospel of Patient Capital appeared first on 256 Business News.