How African traders were helped after independence - Part One

When Uganda became independent, among the various problems it inherited was the monopoly of its trade and commerce by foreigners, in particular by the Asians. To address this imbalance, African Business Promotion Limited was set up in 1964 as a government company to promote Africans in trade. It was a subsidiary of Uganda Development Corporation (UDC). Its general manager was a Briton called G. H. Baker.
The new organisation faced a lot of barriers at the beginning caused by vested Asian interests such that by 1969, the new organisation had only managed to place three African businessmen to own shops, though in a very prime location on Kampala High Street, one of them being the famous Kayondo Shoe Shop Ltd where Church House now stands.
The assistant general manager at the time was a young man of 30 years called Sirayo Yona Nyeko, who embarked on implementing the programmes of the new organisation and went on relentlessly to lobby on behalf of African traders.
In one of his many field trips to various parts of the country, he visited Kaliro in Busoga District at the invitation of the Kaliro Traders Association, to acquaint them with the policies and workings of the African Business Promotion Limited. He also carried out a survey of the traders who had applied to the company for assistance and established that their positions were similar to their peers in other parts of the country.
Some of the traders who applied for assistance and were surveyed included, Salim Bin Addall, J. W. Nfaki, G. Wankadya, G. Mugerwa, A. Uyuaja, A. Baligeya, Lugaire and B. Magana.

Findings
His findings from the survey, which were retrieved from his family archives, showed that the traders kept very small stock of goods in their shops, the rest of the capital were in form of residential or shop buildings.
Most of the African shops were situated five or more miles away from the main trading centre of Kaliro, which was dominated by Asian traders who owned big shops. Some of the Africans who had shops in Kaliro Town had moved out of the main trading centres because of cut-throat competitions with the Asian businesses.
The other problems which Mr Nyeko found were that during the cotton buying seasons, the African traders obtained goods on credit from Asian shopkeepers, loaned at very high interests, leaving them with very small profit margins. Only few Africans traders, he noted, had banking accounts and transacted their businesses on cash basis and the company could not expect good references from the banks for them if they were to be assisted.
Many traders wanted to form a buying group, but requested the assistance from African Business Promotion to enable them become better retailers and to be connected to the right buying points.
Mr Nyeko’s recommendation after this trip was that it was difficult to find an appropriate solution to the traders’ problems because of their capacities and sizes of their businesses. They owned buildings which they would be prepared to offer as security, but they did not possess title deeds for the properties. Mr Nyeko noted that whatever assistance might be given could only be based on groupings.
“I consider that there is a potential market for these traders, if assisted, and therefore suggest that they may be considered for a guarantee limit of £500. Screening of their moral hazard could be carried out through local chiefs,” he said.
Following these recommendations, buying groups were formed in Buganda, Busoga, Bunyoro, Acholi, Ankole, Lango and other parts of the country, who then started sending requests for assistance to the management of African Business Promotions Limited.
But to Mr Nyeko, this type of assistance was not yet enough and wanted more for African traders. In one of his speeches he said:
“Its high time African traders are given a solid backing to enable them share in their own countries trade, which even to this day was still far away from their control, and instead were controlled by foreigners. Although African Promotions policies were designed to meet the African traders’ needs in business, however, there are weaknesses in the organisation’s functions too.”
“If from the outset the organisation was designed to import merchandise for distribution to African traders, its achievements would have been most significant. The role of importing had been left to foreign firms whose philosophy was to get the maximum profit from any investment made, and therefore, no profit margin was left to any African trader on any goods.”

In an article in the July 1966 issue of the African Business Promotions magazine, Mr Nyeko highlighted that, “Private sector which forms the backbone of Uganda’s industry could be doing a lot more to boost the country’s exports, ironically, that vital export needed is apparently lacking on their part. This state of affairs and its continuation seriously disable the country from achieving its targets; as much of the economic development of a country depends on its ability to increase its current earnings from exports.”

“African Business Promotion Ltd, as a government company, could be playing a significant role in this field alongside the private sector. However, the company is still unable to do so, because of its basic policy of not allowing itself to engage actively in import and export trade. A timely change herein will not only enable the company to render more assistance to African traders but also contribute considerably to the economic development of Uganda.”

It was in 1967, after his return from Cairo, Egypt, where he undertook a one-year course in International Marketing that Mr Nyeko’s dream was realised. On his return, African Business Promotion was voluntarily wound up and instead National Trading Corporation was born. The corporation did not commence business until the chairman and board were duly constituted in January 1967.

Mr Nyeko became the National Trading Corporation’s first chief executive manager and, therefore, one of its founder members, if not the founder. He was 33 years of age.
From 1967, Mr Nyeko would embark on developing the work of the corporation whose tasks, among others, were to import goods, distribute them to African traders and export locally manufactured goods by African traders.
The next article will follow Mr Nyeko’s work at the National Trading Corporation from 1967 onwards.

The writer is director Sirayo Nyeko Foundation
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