Tag Archives: diaspora

Investment Opportunities at home for Ugandans in the Diaspora

The army of Ugandans in the diaspora is growing each passing year. By the close of 2016, Uganda’s diaspora remittances had hit the US$ 1.1 Billion mark. According to a study by the Bank of Uganda, most of the remittances are utilised for consumption. This however needs to change especially for those that have designs of retiring back home after the many years spent toiling abroad.

In a previous article, we saw the challenges Ugandans in the diaspora face when trying to invest back home. This time round we are actively assessing the possible investments that can be pursued. I hope that by the time you are done, you’ll have had one or two light bulb moments.

Uganda is not short of investment opportunities for diasporans. Its biggest hindrance is the lack of information on the lucrative opportunities. Matters are worsened by the laissez faire approach of the powers that be who don’t bother to aggressively expose the secrets of this country to those living outside.

It is essential to emphasize that the identification of investment options should follow a comprehensive review of your personal financial circumstances and goals by a qualified financial advisor if you have access to one.

As a diasporan, some of the opportunities you could consider exploiting are;

Unit Trust Funds

This is a fund composed of investors’ money which is invested in a variety of financial assets.

Investopedia defines it as, an unincorporated mutual fund structure that allows funds to hold assets and provide profits that go straight to individual unit owners (investors) instead of re-investing them back into the fund.

Uganda has a few Unit Trusts in place that are regulated by the Capital Markets Authority (CMA). If you are characterised by any of the following;

  • Interest in having a guaranteed modest income
  • Interest in higher returns from your money than say bank interest rates
  • Interest in capital stability
  • Have been a victim of crooked investment opportunities

Then, this is the kind of product for you. You are not only guaranteed of some returns, but you also have an assurance of the safety of your transactions. Being regulated, these funds are closely monitored to ensure that they do not rip off investors.

As a diasporan, it is possible to indulge in this especially if you have an account with any of the local banks. Some of the renowned local Unit Trust managers are Stanlib Uganda and UAP Financial Services.

Investment Companies

These are companies whose role is to invest the pooled money on behalf of their investors that in return share in the profits and losses.

Whatever assets the company accumulates, ownership is based on the proportion of shares held in the business by the individual investors. The investors proportionately share the profits or losses as and when they arise.

Imagine ten individuals, each with the capacity to raise UGX 300,000 (Three hundred Thousand) monthly for investment. These individuals are probably employed or living in diverse locations but have a desire to engage in business together. Besides, based on their big dreams, that money can’t do much at an individual level. However, if they come together, they are able to raise UGX 3,000,000 (Three million) monthly and within a year, jointly have UGX 36,000,000 (Thirty Six Million). At this point, they can then choose to buy shares in listed companies, or invest it in projects they deem desirable.

I know of one such Investment company that brings together Ugandans based in multiple countries globally. They are always on the look-out for investment opportunities especially on the regional stock exchanges. If it has worked for them, it can work for you too.

Investment Clubs

The Uganda Investment Authority defines an investment club as a group of less than 100 people who pool their money to invest in ventures they deem profitable. These have become common lately in Uganda especially among the urban working elites.

Have you heard of the Investment Clubs Association of Uganda? Yes, it exists and that is a sign of how serious these initiatives are lately. Diasporans could learn from this and borrow a cue.

Take the example of the Ugandans in North America Association (UNAA) that has been around for donkey years and gained a sizeable membership. It could organise itself into an Investment Club, collect annual contributions from members and invest in large scale projects back home. This could go a long way in adding value to the association, its membership or even entirely re-inventing it to suit the changing times.

Private Equity

This is money invested in firms which have not gone public (listed on stock exchange). As a private equity investor, you identify a business that is already operational, has potential and is probably not yet profitable. The investor buys the business, restructures it and supports it towards a path of good performance. Thereafter, one could choose to sell it off or even list it on the stock exchange.

There are numerous local businesses in Uganda that could get a new lease of life if only they had an infusion of this nature. Diasporans have the skills, exposure and even money to undertake such opportunities.

Government Securities

Defined as, a set of instruments that are used by the government to borrow money from the general public. This is one of the ways, other than through taxation that the government can raise money to fund its activities. They take the form of Treasury Bills and Bonds.

Treasury Bills are issued when borrowing money for a period less than one year. Specifically, these are issued for either 91 days, 182 days and 364 days.

Bonds are issued for money borrowed for a longer period over one year. They can be issued for 2 years, 5 years, 10 years and 15 years.

They are regarded as having the least risk among investment options simply because they are backed by the strength and credibility of the government. By offering a time bound repayment plan and predictable interest, their risk is near to zero.

You may be wondering how you can easily participate in trading. Life seems to have been made easier. I came across Money In Africa a website that facilitates you to monitor and trade in these securities online. Upon creating an account, one is able to view the offers from selected Government offers. In my case, I could see Kenya and Uganda only. The entire process is simple and user friendly. You might want to give them a try.

Alternatively, most local banks trade in these securities on behalf of their clients. By contacting your local bank, you should be able to achieve this with ease. More on this was covered in an earlier article.

Trading in Shares

Uganda has a vibrant stock exchange that traces its roots to the 90s. With eighteen companies listed currently, you have a choice and can trade in shares.

Once again, as a diasporan, Money In Africa is in position to make this experience much better. It offers not only profiles on these listed companies but an indepth analysis on each of them, complete with a list of recommended brokers.

Real Estate

This takes the form of land and buildings. It has been deemed by many as a lucrative investment and nearly all diasporans that want to do something at home consider purchasing land or building a structure as a priority.

The biggest challenge here has been the informal approach largely used to achieve this form of investment. Most diasporans have in the past relied upon relatives and friends to purchase land, construct structures among other things including even the processing of title deeds. As a result, there are a lot of stories of the untold suffering many of them have faced in regard to the levels of betrayal.

The good news however is that as a result of these challenges, some entrepreneurs have taken advantage and come up with businesses focused on serving the interests of diasporans in this regard. I have so far heard of two companies that specialise in construction projects for diasporans and offer their clients frequent updates utilising social media applications.

Another approach to this angle would be for property developers to team up with banks to offer mortgages for buyers of their properties. This would then allow them to sell to both locals as well as diasporans. Such an approach guarantees a diasporan of a quality property, funding as well as minimum exposure to the fraud earlier talked about. The only downside here would be the high interest rates of our local banks. This interest rate exposure though could possibly be reduced by borrowing from a foreign bank (where the diasporan is based) given that USD and Euro interest rates have been at historic lows. The foreign borrowings would be used for a substantial deposit on a local mortgage.


Uganda is endowed in Agriculture. With very good soils, large masses of water as well as a dual growing season cycle annually, nothing beats that. The country can support the growth of numerous crops including some that have hitherto been considered alien like vanilla.

The major hindrance to this sector has been the lack of value addition through processing of the produce. Maize is sold as the basic grains, same to millet, ground nuts, beans etc. However, the increasing urbanisation in the country as well as international demand for food has led to the emergence of opportunities in this sector. Agro-processing is gaining traction. A diasporan I know based in the USA is currently processing Shea Butter and exporting it to well paying markets.

Opportunities here include processing of cereals, fruits, nuts among others. One could choose to participate in the actual farming of this produce through leasing of land or better still utilise a network of outgrowers.

If there is any sector pregnant with opportunity for diasporans, it’s this Agriculture sector. Focus though should be on export oriented opportunities.

Oil and Gas

As a new entrant in this industry, Uganda is rife with opportunities in this regard. The industry is being set up from scratch hence offering lots of opportunity for those with the know-how. A number of local content initiatives aimed at ensuring that Ugandans do benefit from this industry have been kickstarted and in my view, those with some knowledge of this sector stand a high chance of being early bird reapers.

More information can be got from these listed resources;

How best can this be realised?

Amidst all these opportunities, it is crucial that some of the following be done;

As a diasporan you need to arm yourself with some knowledge on business, financial literacy, agriculture, tourism among others. This will help you make more informed decisions as an investor even when you may have an investment advisor.

The Government of Uganda needs to get out of its slumber and proactively reach out to the diasporans. The current efforts aimed at the diaspora seem to have a feeble impact and we would be better off having a dedicated agency focusing on Ugandans in the Diaspora. The Diaspora Services Department in the Ministry of Finance still has a long way to go.

Taking the example of South Africa, under Brand South Africa which is the nation’s marketing agency is a programme called Global South Africans that reaches out to South Africans in the diaspora and gives them statistics and facts about the nation so they can then be equally empowered to not only promote their country but also attract investments back home.

Will you invest in Uganda?

James Wire is a Small Business and Technology Consultant

Blog: wirejames.com

Twitter: @wirejames

Email: lunghabo (at) gmail (dot) com

Investment Challenges faced by Ugandans in the diaspora

There was a time when all that we heard about the Ugandan diaspora were tales of people going out of the country to destinations like the U.K, USA, Canada etc to do back breaking menial jobs regarded with disdain by the locals of the host countries. Over the decades however, the narrative has since changed. It is common lately to hear of Ugandans taking on high level jobs in globally renowned multinational organisations. As a result, the remittances by these Ugandans back home have grown in leaps and bounds to the extent of being recognised as one of the leading stream of money into the local economy.

Due to one reason or another, there is a desire by most of these diaspora dwellers to put up some form of investment back home. Probably they have plans to retire in Uganda when done with the globe trotting while others are simply trying to set up an income stream for their extended families back home.

Most of the Ugandans in the diaspora I have shared with on this matter of investing back home confess that they have tried and will keep trying. However, they highlight a number of challenges that they face in their quest to do so. These include;

Trust: There is a general lack of trust among the people they have tried dealing with to represent their interests. They highlight a shortage of people they can consider reliable and faithful to manage their investments. Stories abound of diasporans that have been fooled into constructing homes that end up not being theirs or purchasing land they eventually don’t get to own.

Lack of information on available opportunities: Getting Information in Uganda can be a herculean task. This is not a challenge confined to those in the diaspora only. Most government staff believe hoarding information is key to their survival in office. When opportunities arise, these officials tend to hoard it and prefer to dispense it in a biased manner especially to those that reward them financially.

Matters are aggravated by the existence of a bad culture especially among government agencies that prefer to work as independent silos. Today’s opportunities can only be best exploited through a multi-sectoral approach. You can’t talk of attracting industries into the country without ensuring that there is adequate electricity, good transport infrastructure as well as communication facilities. This therefore calls for lateral interfacing among the relevant agencies.

Government aside, there is a general preference by most Ugandans to store opportunities in their brains hoping to dispense the knowledge in a piecemeal basis in order to be deemed relevant. Most of this knowledge being hoarded cannot be easily exploited by the very people hoarding it.

Accessing research data is another blister that needs treating. The Uganda Bureau of Statistics (UBOS) has numerous studies it has undertaken in the different sectors of the economy. Unfortunately, whatever information they have is usually treated with the same sensitivity as security related information. It leaves one wondering why in the first case they gather and process data.

Lack of accurate information: Where information is available, its accuracy is often questioned. It’s very common to come across multiple sources of information on a particular issue all giving different versions.

The diasporans, do not usually have the time to tooth comb through the information that they get about the investment climate back home. This is why they prefer to get it in as clear and accurate a manner as possible so that they can make decisions in an expeditious manner. Remember, the urge to invest back home is competing with alternative investment possibilities abroad.

Weak/Corrupt government institutions: The government institutions meant to facilitate investment are weak and largely corrupt. They either do not do enough or simply encourage an atmosphere of corrupt tendencies, a factor which exposes people’s investments to a lot of risk.

Take the case of land, there are numerous stories of diasporans that have been defrauded as a result of having their land sold to other parties without their consent or even buying land with fake titles.

If it requires one to board an aeroplane and spend a couple of weeks in Uganda just to pursue a land transaction to conclusion, the cost of such an investment turns out to be unfairly high.

A diasporan I interviewed for this article told me how he once pitched a low cost road resealing solution to the Kampala City authorities some years back only to be shamelessly told that, “Ffe tunaalya tutya?” (How shall we eat?) Basically, they implied that cost cutting solutions are not good for them because they need generous cuts/kickbacks off any works that have to be done on the road.

Business Models that depend on one’s presence: Most businesses that the diasporans engage in can best work with physical supervision by the owner. The working culture in Uganda is still poor to the extent that the diasporans find it hard to run their business operations remotely, either the staff will work in a lacklustre manner or they rob you from within.

Lack of investment support infrastructure: This is an accusation levied by the diasporans and shouldn’t be taken lightly. For anyone intending to invest, it is important that they get to actualise their intentions in a manner that is as smooth as possible. For long, government agencies tasked with facilitating investment were detached from each other until a decision was made to have some coordination across all of them.

The processes of registering a business, acquiring tax identification, getting an investment licence among others were for long handled by different agencies located in different offices across the capital city of Kampala.

Lately though, a single-spine approach has been implemented where a visit to the Uganda Investment Authority can enable an investor walk away after accomplishing all the requisite registrations. While this is commendable, the next step is to take this interaction online in order to facilitate engagement with the diasporans.

Lack of a Government support structure for diasporans: Apart from what can best be described as a rag tag effort by government towards dealing with diasporans, there is no institutionalised approach in place aimed at deliberately engaging them in order to further their ambitions to invest back home.

Occasionally one hears of a team of government officials destined to attend annual gatherings of Ugandans in the USA or the UK but that is as far as it gets. The cosmetic engagements that occur in such events need to be taken a step further to enable any Ugandan in the diaspora acquire information, make decisions as well as protect their investment back home without pulling many strings.

Poor work ethics: For those that have lived in developed countries and even had a chance to work there, the work ethics of a typical Ugandan would send them reeling in shock. The reason this is an important issue is because it has a direct impact on the productivity of any business investment.

Imagine if the average production capacity per employee in a toilet paper factory is 50 cartons per day and the best our employees can do is half that, it definitely distorts the anticipated performance of the overall investment.

Take the case of employees who are willing to jump onto any excuse to either come late to work or avoid working entirely. They complain of rain or traffic jam as a reason for being late, a burial or sick child as a reason not to work for the entire day etc. The reasons tend to be numerous and very petty at best.

Lack of Skilled Manpower: The quality of manpower being churned out by the education institutions is degenerating at a very high rate. It is common to find today’s graduates failing to execute tasks that were taken for granted a couple of decades back.

The questionable skills that the pool of job seekers have are a bog let down to those planning to invest. It implies that one has to factor in resources for skilling employees thereby increasing the business start-up costs.

High cost of capital: Accessing financing especially long term can be very expensive in Uganda. Matters are aggravated by the constant need for collateral by the financial institutions. This creates limitations on the ability of an investment to scale. This challenge has been partially attributed to the private sector competing with government for the available credit.

Despite all these glaring challenges, it is good to note that the diasporans have not hesitated investing in Uganda. However, it seems like their level of investment would be much greater if only a number of these hoops were addressed. In a follow up article, we shall talk about what the Government of Uganda can do to address this increasingly crucial section of Ugandans.

James Wire is a Small Business and Technology Consultant

Blog: wirejames.com

Twitter: @wirejames

Email: lunghabo (at) gmail (dot) com