Is Chamber of Commerce still relevant?

Tuesday September 27 2016

Mr Amos Wekesa (left), CEO Great Lakes Safaris,

Mr Amos Wekesa (left), CEO Great Lakes Safaris, greets Mr Yusuf Karmali (right), a member of the Ugandan business community at a press conference held at the Kampala Serena Hotel last week during which Andrew Rugasira (centre), chairman of Good African Coffee, announced his intention to stand for the Presidency of the Uganda National Chamber of Commerce and Industry. Mr Rugasira intends to revitalise the institution which he says is a far cry from what it should be. Courtesy Photo 

By Mark Keith Muhumuza & Jonathan Adengo

On a Sunday morning, clad in a grey suit, light blue shirt and a blue tie with yellow stripes, Mr Andrew Rugasira declared his interest to contest for the presidency of the Uganda National Chamber of Commerce and Industry (UNCCI). The usually eloquent Rugasira addressed the media on a Sunday at the Kampala Serena Hotel as the Public relations strategists understood that it would be the big story on Monday. Indeed it would. Mr Rugasira is the chief executive officer (CEO) of Good African Coffee, a company involved in the growing, selling, branding and exporting coffee.
The presidency of UNCCI has not been competitive for the last 15 years. Ms Olive Zaituni Kigongo, founder of Amagara Skincare Products, has been at the presidency of UNCCI since 2001. A tenure Rugasira says has now reached its peak because the organisation has become inefficient.
“This is on account of poor leadership, poor governance structures and a chamber that has failed to migrate to the new age,” he says. He adds that UNCCI is struggling for relevance at a time it should be engaged in a discourse and lobbying on how to address the challenges affecting the economy.
“There are issues of credit not being available, capital being expensive, the financial market being shallow and narrow. You look at the property markets, dollarised rents, look at high interest rates for borrowing and mortgaging, there’s a whole host of issues and raft of challenges that the market base is facing,” Mr Rugasira adds.
The UNCCI’s roles as stated on its website, includes lobbying on behalf of the business community, offering advisory services, networking opportunities, arbitration, supporting young entrepreneurs and facilitating inward and outward trade, among others.
One particular point of criticism raised by Mr Rugasira is the failure to lobby for the business community. According to the UNCCI website, their lobbying role is to “…carry out negotiations and they are a voice for the business community in Uganda. So we are responsible for agitating for the change of numerous unfair policies that affect the Ugandan business community and increase the difficulty in carrying out trade and industrial activities.”

Chamber of Commerce irrelevant?
The Ugandan business environment has been facing headwinds since the start the start of 2015. There was also another crisis that hit the country in the election year of 2011 when inflation hovered above 10 per cent and interest rates were at 30 per cent.
The Kampala City Traders Association (KACITA) has been more confrontational in getting the government to the table. In 2012, they went on strike over the high-interest rates and forced President Museveni and Bank of Uganda (BoU) governor Prof. Emmanuel Tumusiime Mutebile to meet them. The outcome of the meeting did not lead to a reduction in interest rates but what they got was a directive by BoU to banks to make loan applications legible and explain all costs involved in the process.
Recently, several companies approached the government seeking a bailout as commercial bank loans were biting hard. Some of them are members of UNCCI. They lobbied through the Private Sector Foundation Uganda (PSFU). The Uganda Chamber of Mines and Petroleum (UCMP) in 2014, lobbied with the Uganda government and got a VAT exemption on capital investments for the oil sector for exploration activities.
The criticism towards UNCCI has been the failure to lobby. Mr Amos Wekesa, the chief executive officer of the Great Lakes Safaris, urged the private sector to seize opportunities and sign deals with other foreign investors.
“The chamber of commerce should be at the forefront of advising the president and also signing contracts with foreign business when they come or visit other countries,” he said. Mr Wekesa is backing Rugasira for the presidency of UNCCI.
Mr Abhay Agarwal, the president of the American Chamber of Commerce Uganda, says they would like the UNCC to be more effective so that they can use them to sit down with the government to discuss future policies.
“Unfortunately, there isn’t much happening between us and the Uganda National Chamber of Commerce and I believe there is a lot that can happen. They need to be more active and participate with us because when all these chambers come together, then the government can listen to us,” he said.
They don’t know what they are doing
Ms Olive Zaitun Kigongo, however, disputes any claim that UNCCI has not been relevant in the country.
“Before we go for elections, the directors sit, dissolve the whole body and then set a date for the elections to take place. That is done through the secretariat. Until that is done, anybody doing that out of those structures, I don’t think they know what they are doing,” Ms Kigongo says in response to the declaration by Mr Rugasira to contest for the presidency of UNCCI.
On the distressed economy and what UNCCI could have done for members, Ms Kigongo notes that it had nothing to do with them.
“Any of you can see that the current distressed economy has nothing to do with the Chamber. It has to do with a lot of things and to say that the Chamber if it had been active we shouldn’t have gone through this is ignorance,” she adds.
Uganda’s business environment has several associations that represent their interests in terms of lobbying and networking – almost duplicating UNCCI’s role. The Uganda Manufacturers Association represents interests of Ugandan manufacturers, Kampala City Traders Association (KACITA) represents traders within Kampala and the Kikuubo Traders Association is meant for the traders within Kikuubo.
Founded 93 years ago, UNCCI is older than the breakaway associations but Ms Kigongo disputes the claim UNCCI was responsible for anyway breakaway factions.
“For me, that is a lie. I don’t see why they should politicise the Chamber. It is a private sector organisation. There is no policy that stops anyone from opening up an organisation. KACITA is like any other association and that has nothing to do with the Chamber. It is not true to say they formed the Chamber because there is no obligation that all have to be a member of the Chamber. We’re all fragmented with no policy to guide us,” she points out.

Governance issues
On March 24, 2016, Mr Jurua Peter Fenhas of Savoury Classic Quality Meat Products, Makweta Patrick, and Good African Coffee sued Olive Kigongo and UNCCI on seven grounds all related to governance. The allegations range from the failure to hold an Annual General Meeting, failure to provide accountability reports, failure to maintain a register of members and availing it to the public, amendments to articles of association of UNCCI and violation of principles of corporate governance, among others.
Court documents indicate that there were audit queries in a 2013 audit report that was leaked to members by a whistleblower. The report resulted into an investigation by the Inspector General of Government (IGG) in July 2015. In a letter dated July 21, 2015, the IGG noted that investigations would be conducted into the illegal sale of donated government property.
“The office has commenced investigations over the allegations in accordance with Article 226 of the Constitution of Uganda, which extends jurisdiction over leaders whether in Public Service or not and in Section 9 (O) of the Inspectorate of Government Act, 2002, given the fact that government donated properties to UNCCI, which formerly belonged to the African Trade Development Fund,” the letter reads.
A report on the investigations is yet to be released. In July 2016, President Museveni also ordered that UNCCI doesn’t sell properties in Lira - (plot 85) near main market and another at plot 25 Obote Avenue - because they had been a donation from the government.

No election date
UNCCI has a board of directors consisting 20 members. The board of directors consists of both representatives from the various regions in Uganda, showing UNCCI’s footprint across the country. As the President, Ms Kigongo heads the board. This board has to be dissolved for elections to take place. She has also not declared whether she will be contesting the elections when a date is set.
“When the time comes, we have rules and regulations. Wait for that day and I will announce whether I am standing or not standing,” she says.
UNCCI has a membership of about 8,300 people, according to a database seen on the website. This membership will be responsible for electing a new President and board. In December 2015, an AGM was held but on the agenda, there were no elections scheduled. The elections take place once every five years. The members were told elections would be held in 2016.

History of UNCCI

Characteristics. The Chamber is characterised by a network of district Chamber branches which cut across all regions in over 80 districts.
Role of Chamber. Set up in 1933, UNCCI was created by the business community, as a membership organisation to guard their interests, at the time of anxiety caused by the great depression of the 1930’s, and thereafter the Second World War.
The umbrella organisation suffered a setback with an economic collapse following the 1972 expulsion of Ugandans of Indian origin by Idi Amin.
UNCCI was reconstituted in 1978 and registered as a company limited by guarantee without share capital, guided by a set of by-laws enshrined in articles and memorandum of association.