Kikuubo: What the business hub means to Uganda’s economy

A cross-section of traders and customers at one of the busiest sections of Kikuubo Trading Centre in Kampala during a recent back - to- school shopping season. FILE PHOTO

What you need to know:

The growing lack of white collar jobs for youth has pushed many people into trying their hands at doing business in Kikuubo. Joseph Kato finds out how business downtown has evolved.

Uganda’s capital city and largest urban area, Kampala, reportedly generates about 60 per cent of the country’s Gross Domestic Product (GDP). Everest Kayondo, the chairman for Kampala City Traders Association (Kacita), backs this claim saying traders contribute more than 43 per cent of the GDP with Kikuubo Shopping Zone, also known as Kikuubo market, being the biggest contributor.

According to Kampala Capital City Authority (KCCA) trading licences of 2012, Kikuubo is graded number one among the revenue sources. Its charges are far much higher compared to other markets such as St Balikuddembe, Nakasero, Wandegeya, USAFI and Nakawa which are regarded as Pull B.
KCCA’s licensing rates show that wholesalers in Kikuubo Shopping Zone pay Shs498,750 per annum whereas their counterparts in other places are charged Shs236,250. Mr Muhammed Katimbo, the chairman Kikuubo Business Community (KBC) and Mr Sam Muyomba, say there are between 35,000 and 40,000 traders in the market. Of these, about 20,000 are wholesale traders and more than 15,000 are retailers.
When the Shs498,750 paid as licence fee is multiplied by 20,000 wholesale traders, it amounts to about Shs6 billion whereas the Shs236,250 that is paid by the 15,000 retailers makes about Shs3.7 billion. In general, KCCA collects about Shs9.7 billion from Kikuubo traders annually.

To comprehend the significance of Kikuubo business hub to Uganda’s economy, one needs to first understand its background. Tracing the history of Kikuubo is hard. Neither the past nor the current leadership of the market has ever bothered to document the origins of this shopping zone.
Mr Katimbo says the market was started in I969 whereas Mr Muyomba contradicts him, saying it was established after former president Idi Amin expelled Indians in 1971/72.
The duo agree that the market was mainly characterised by wooden structures which served as timber stores which were one of the main item Indians sold.
The two businessmen became part of Kikuubo in early 1980s through their relatives who took over business after the expulsion of Indians.

Although the duo differ on dates when Kikuubo was started, they agree that the first native Ugandan traders in the shopping zone were Lugeye, Hajji Muzimya, Hajji Karim and Rutagumayo, who have since passed on.
Mr Muyomba says in early 1990s, traders specialised in merchandise such as salt, soap, sandals, and iron sheets. It was much easier for one to get the goods wanted as people could leave their homes knowing the particular shop to stop at.
“There were no well-built structures. Most of the buildings at the time were wooden and were used as stores for Indians traders. The construction of modern buildings started in early 1990s,” Mr Muyomba says.

Mr Kayondo, who has been doing business in Kikuubo since 1997, agrees that the market has greatly evolved in the past two decades. The storey buildings were erected recently, replacing wooden structures.
Mr Katimbo says the erection of storeyed shopping malls known as plazas or arcades started around 1995 when new players in the market bought the wooden and old structures.
Majority of the original traders lacked money to construct arcades thus ‘outsiders’ bought the land and built classic buildings.
The buildings ushered in new traders who brought change in doing business. For instance, the new traders started venturing into sugar, shop and salt leading to extinction of timber, iron sheets and maize flour businesses that were dominant at the time.

“From 1970s to early 1990s, Kikuubo was popularly known for timber and maize. It also had some hardware shops. I can say its state was more like Kisenyi of today,” Mr Muyomba says.
At Kikuubo, the number of traders grows every year. The market had about 5,000 traders in 1980s, and in the late 1990s, there were about 15,000 and the number has since grown from 35,000 and 40,000 traders.
This trend is attributed to the potential and opportunity Kikuubo provides to individual traders who come from far to make a killing in Kampala.
Besides, the increasing absence of white collar jobs for the youth has pushed many people into trying their hands at doing business in Kikuubo, as the shopping zone has continued welcoming new entrants into town.
Mr Kayondo says nowadays, Kikuubo has an assortment of business that range from food items, clothing, home items and scholastic materials such as books.

Unlike in the 1990s where Kenya was the major source of goods, Mr Katimbo says a good number of traders now buy their goods from Europe and Asian countries, among others China, and United Arab Emirates.
“Goods from Kenya were a bit expensive. Also customers always prefer latest goods. Kikuubo is a blessing for Uganda and other East African countries as they benefit from reduced cross-border tariffs,” Mr Katimbo observes.

Shoppers’ experiences
Kikuubo gets customers from all walks of life including large and small quantity buyers from districts such as Mbarara, Masaka, Mbale, Mukono and Bushenyi.
Mr Prisca Adoch, a retail shop operator in Gulu Municipality, buys her merchandise such as body creams, plates, cups, cosmetics and books, among other products, from Kikuubo.
“There are times when goods are in plenty and one may fail to choose the best ones. There are also instances when goods seem to be insufficient in Kikuubo,” she says.

A Mbale Town-based wholesaler and retailer, Mr Yusuf Madanda, also buys his goods from Kikuubo market. To him, Kikuubo is the best place for shopping because he gets all the goods he needs unlike when he used to shop from Busia, a township in eastern Uganda.
“I used to shop from Busia town but I could sometimes come back with few goods. In 2012, my colleague advised me to start buying goods from Kikuubo in Kampala and the advice has worked very well for me,” he says.

Trade volume
Ms Hadija Nakakande, the spokesperson of the ministry of Trade, and Mr Peter Kaujju, Kampala Capital City Authority’s spokesperson, describe business in Kampala as majorly informal. They say this kind of trade makes it very difficult to estimate the volume of goods that takes place in various markets and trading centres within the city.
“I am not sure whether you can really get Kikuubo statistics. Ugandan business is more of an in informal sector,” Ms Nakakande said.

KBC leaders blame KCCA and Uganda Revenue Authority (URA) for issuing trading licences without considering the capital strength of traders.
They claim they are always sidelined whenever KCCA and URA are making tax decisions. This has made many of their colleagues quit business because of high taxes.
Although Mr Katimbo agrees that Kikuubo is Kampala’s business pulse, he says that should not be an excuse to slam taxes on traders without seeking the community’s consent.
“KCCA sends students to collect taxes from us. Many of them cannot differentiate between a retailer and a wholesaler. They just look at items in the shop and conclude,” the businessman stresses.

Mr Kauju refutes this allegation saying they implement what the Trade ministry has passed, and that they are not involved in the setting of trading rates.
“KCCA, just like any other local government, goes down to enforce what the Trade ministry has passed. We do not have our own licensing rates,” Mr Kauju rebuts.
The traders also cite poor drainage as another problem they face as this makes the market stink, especially when it rains heavily. They also blame this on KCCA, saying this has allowed the construction of new buildings without improving on drainage systems.

The business community also blames KCCA for not conducting hygiene sensitisation programmes and failing to increase on the number of public toilets which are operational throughout the day.
“We have people who in their life have never squatted on a toilet. They end up easing themselves in corridors and verandas. This is because no one has ever trained them on toilet usage,” Mr Muyomba says.
Mr Kauju admits that drainage system is still a challenge for the whole city but he quickly adds that they are working around the clock to improve the entire system.

Other city markets
Kampala City has many other open air markets that serve not only Kampalans and Ugandans, but also other shoppers from all parts of the country, and from the neighbouring countries including Rwanda, Burundi, Democratic Republic of Congo, Tanzania and the Western parts of Kenya. Markets such as St. Balikuddembe, Kalerwe, Nakawa, Kibuye, Nateete and many others. According to Kikuubo traders, people from all walks of life do business with them because of their affordable prices and variety of products.