Ugandans should learn from foreign retailers

Traders, employers, labour unions and politicians are smiling from ear to ear. Why? Because President Museveni on Tuesday said Chinese and Indian traders should be redirected to manufacturing and that the retail business is ring-fenced for Ugandans. Both the government and traders are arguing that this move will help solve the unemployment problem in the country that stands at close to 80 per cent and keep wealth within the nationals.

The world over, it has always been easy to turn foreigners into punching bags whenever nationals are disillusioned with the quality of life or the state of their economies. We saw it play out in South Africa where rampaging nationals killed immigrants from other African countries ostensibly to protect their jobs and livelihood.

Yes, foreigners in retail business has always been an uncomfortable issue even in Uganda and independence fighters Augustine Kamya and Ignatius Musaazi led protests in the 1950s to allow Africans come into retail trade and restrict Asians to wholesale trade.

Idi Amin in 1972 came with what he thought was the ultimate solution; expelling thousands of Asians holding foreign passports. It proved no solution and ironically, the biggest losers were not the Asians who lost their property but the Ugandan economy, which saw an industrialist class, wiped out almost overnight.

Many Asian businesses were handed over to Ugandans who had no idea how to run them or restock them. The Gross Domestic Product fell by five per cent between 1972 and 1975 yet money supply rose by 92 per cent during the same period, leading to inflation.

So as the excitement over the President’s directive pans out, history should not be lost to Ugandans and the place of foreigners – since they first set foot here in 1890s – should be put into proper perspective. The trailblazers of formal retail trade in Uganda were mainly Asians who include Allidina Visram (in Nakasero, Kampala), Vithaldas Haridas Madhvani and Dvjbhai Hindocha (In Jinja and Iganga) and Nanjibhai Kalidas Mehta (in Lugazi). These towns essentially grew around these families of early Asian retailers.

There is, therefore, a lot to learn from and benefit from foreigners – both at industrial and retail levels, keeping in mind the hard truth that keeping out foreigners does not necessarily make life better for nationals.

As Ugandan businesses clamour for restrictions on retail trade, it will amount to nothing if they do not learn from Chinese and Indian traders how they manage their retail outlets. Indigenously owned retail businesses do not fail primarily because of competition from foreign retailers; they fail because they are poorly managed!
The issue: Foreign retailers
Our view: As Ugandan businesses clamour for restrictions on retail trade, it will amount to nothing if they do not learn from Chinese and Indian traders how they manage their retail outlets.