Tourism to agro-processing: How entrepreneur Wekesa turned Covid-19 into an investment opportunity
[Known as the poster child for tourism in Uganda, Amos Wekesa had it made in tourism, until the disruptions occasioned by the Covid-19 pandemic forced him to diversify. In this second edition of the Investor Success Stories, Wekesa speaks, verbatim, about diversifying from tourism into agro-processing, the intersectionality between tourism, agriculture and other investment opportunities. Read more …]
I was born in 1973 in a village called Lwakhakha in present-day Namisindwa District in eastern Uganda (Bugisu sub-region). Lwakhakha used to be part of Mbale District, then it became part of Manafwa District and is now part of Namisindwa District.
I was born in, fairly, abject poverty and did not go to school until the age of 10. I was taken to Salvation Army, a home for less advantaged children in Tororo at 10. I did very well at the primary level but didn’t like school at the secondary levels.
In 1996, I did my A-levels at the age of 23. I failed because I didn’t take my studies seriously. I was sent to Kampala to do a certificate in tourism, which I did for nine months.
Of course I had built skills as a young man and the skills were in a number of things. You know, I liked sports so did lots of sports. I liked scouting, I loved debating and loved leadership. These were some of the strengths I garnered while I was in school, which some people take for granted.
My first job was being a sweeper because, first, I wasn’t really qualified second, I wasn’t connected to anybody. Nobody really knew me. So, I started out as a sweeper with Belex Tours, a company which was at the Sheraton. Then I went on to become an office messenger with Nile Safaris, a tour guide with Habari Travels and my last job was with Afrique Voyage, a travel company with a bit of interest in tourism.
Getting into business
In 2001, I started my first business, that is Great Lakes Safaris, with 200 dollars and I was in a briefcase for nine months. We had a receipt book and an invoice book with a phone number. I was also running a car hire service at the time.
From the briefcase, we went into a below-the-staircase office in Rainbow Arcade (on Kampala Road). We were two companies sharing the small space. From there, after appearing in the Washington Times (in the United States) on 22nd of November 2002, business started coming. People were saying ‘we read about you’ and we had to relocate to a better place. We shifted to a home office in Nsambya estate and put the office in a garage, which was fantastic.
We started growing and I realized that making a good name was gold as far as business is concerned. Being reliable is a special attribute for a business person like myself!
So, Great Lakes Safaris started growing by leaps and bounds. I started taking interest in property and then in 2006 I applied to build a lodge in a primate-infested national park, Kibaale, that is Primates Lodge. It wasn’t very good and even now we are trying to upgrade it to look extremely very good. Then we built our second lodge, Simba Safari Camp in Queen Elizabeth National Park in Kasese. Then we took over Budongo Eco Lodge in Masindi, our third investment, then we built our fourth lodge, Elephant Plains, also in Kasese, which is extremely very beautiful! We have now gone into marine tourism. We started with Uganda’s best cruise boat called MV Kazinga.
We were growing year-on-year, the worst bit being ensuring that a business breaks even. Of course a business may struggle but others would be able to support it to still stand. I had grown my business for 19 years and basically had no debt but had some savings.
All was going well until Covid-19 happened. We were well-booked, 2019 for 2020. We had almost amazing business which was going to happen. Then we started hearing rumours about a disease that had started out. In February (2020), we started joking about it (Covid-19). In March, reality set in. In April, the country was under lockdown. For six months, I did my level best to pay all the staff fully.
At the end of July, I said ‘I can’t handle it anymore’. We started to significantly reduce the number of our staff and those who remained were taken to half pay. It wasn’t a comfortable thing for the staff and neither comfortable for me. I remember signing papers with eyes closed. I couldn’t imagine young people going back and having nothing to earn.
When you start growing a business at one point it becomes a social enterprise as opposed to an individual enterprise because your desires and dreams become different. You start thinking of the bigger picture of a country as opposed to yourself. So, it was very tough for me.
Moving to agro-processing
For years, a friend of mine, Isaiah Rembo, had tried to interest me in agro-processing, which was extremely hard because I hadn’t thought about diversification. The only diversification I had outside tourism was a bit of property. Besides, I was growing very well, so I didn’t need to think about going out of my comfort zone.
Eventually I accepted Isaiah’s idea of diversification and we started discussions. In April, we started going to one of the districts, which I won’t mention, to try and buy land. Along the way, we discovered that the guys had an industrial park they are starting up. So, we started engaging the district leadership to be part of the industrial park because it is important to be part of an organised environment. Besides, the district is key in cereal trade with Kenya.
As we engaged the leaders, slowly we started discovering that they were playing games. They are not used to seeing black people investing. They kept asking us: ‘Who’s the mzungu (white person) owner? Who’re the mzungu owners?’ I kept telling them: ‘Much as you see me dressed in jeans, I’m the guy’. It was a difficult experience.
They started inviting us to speak to different people and each time we met them they would ask for sitting allowances. It basically became a game. In fact, at one point one of them went to Uganda Registration Services Bureau and reported that Pela Commodities, our company, is actually a new one and, as he put it, “we may be giving land to crooks”.
I told them: ‘Well, if I were you I wouldn’t go and look at that but rather look at who the owners of Pela are and see if they are crooks or investors of repute”.
So, we started getting frustrated. From April, we were now in September and our machinery was being manufactured in the United Kingdom. Some components had already started leaving for Uganda in eight forty-foot containers.
UIA comes into the picture
In the second week of September, I picked the phone and called Morrison Rwakakamba, a Board member of Uganda Investment Authority. He was very good, I mean he was very excited when I told him I was going into agro-processing. He said: ‘Amos, you have a good track record and I think for us we wouldn’t hesitate making sure you have land”. This was extremely very exciting and it is still exciting.
Still I thought, ‘But what is the catch? Do these guys want a bribe?’ Much as I have done a lot of work with them (UIA) as Chair of the Technical Working Group on Tourism under the Presidential Investor’s Roundtable (PIRT), I had all along thought of them as a group of dedicated government officials but did not believe that their interest was in promoting local investors like myself.
Rwakakamba quickly engaged the acting Director General, Mr. Lawrence Byensi, whom I also called up. Mr. Byensi was like: “Mr. Wekesa, if you have the machines and are already doing something we’re going to support and facilitate you’.
I was like ‘Really?’ I kept thinking: ‘Are they going to ask for bribes?’ But they told me ‘Do the paperwork’.
We did the paperwork in which they asked us to show our ability to invest. I showed them our investment plan, evidence of money, the bill of lading for the machinery, among others, and we were good to go. They said “Alright, but we probably have only 10 acres of land for you in Soroti Industrial Park’ and we said “Fine, let’s start with that’. Our interest is actually 20 acres and we hope that we are going to get the 20 acres in February 2021 when we are starting our first factory.
So, two months down the road we have land and construction has begun, for weeks now, and it is going very fast. I must say every corner that we turned to engage Uganda Investment Authority, we have gotten the help that we needed. When you think of it, it gives me hope. As a taxpayer, I have paid taxes for many years and I feel like there is a return of part of my taxes in terms of, you know, getting free land.
I, as Amos, I had never, outside participating in PIRT like offering time as a businessman into building the nation, thought that UIA had interests in seeing Ugandans develop. Not at all. I just thought UIA is a facilitator of foreign interests.
Jobs being created
As I speak, we probably have 100 or so young people; those working on the project and those supplying construction materials. It is crazy and that is what we want. As a country, we need to create jobs. Of course people should know that when you are the one investing the first persons to benefit from the investment are others in society. As an investor you benefit later. The key thing for us is to make sure that young people get jobs.
The first part is handling 18 types of cereals and our machinery can be able to sort, clean and dry 36 metric tonnes of cereals per hour. That means we could easily process over 600 metric tonnes of cereals in less than 24 hours, which is a fantastic thing for Uganda.
Soroti as a location
Soroti (located in Teso sub-region in eastern Uganda) is a very good place. It has had its own challenges. One of the challenges I see is that UIA must engage the district and city leadership. The leaders seem not to appreciate that one of their key roles is actually to attract investments. If you look at the City of London (in the UK), the role of the Lord Mayor is to attract investors. The mayors we have in Uganda think it is for them to benefit from a city yet it should be their role to attract investments to benefit the city. Right now, just to inspect the plot we have to pay per square metre. I was shocked when they asked for two million shillings for one to leave office and come and inspect. It should be them pushing us to invest, yet each time we are getting bits of threats, and we are like, “Guys, how are you gonna put up a conducive environment for investors?’
That industrial park has had the involvement of UIA for some time, and we believe they already did an environmental and social impact assessment, yet we have to do one again. I think Soroti city should be happy that we are investing in the city. I think UIA must put up programmes through which they can sensitize stakeholders to understand the value of investments.
In this investment project I have three partners, two major ones and one minor one. We really have big dreams. Our first dream is to start with sorting, cleaning and drying cereals. Our second dream is to do one of Uganda’s biggest cereal production. Then within five years, God willing, we should be able to make starch out of cassava from Teso, Lango, Acholi, West Nile and Karamoja. We want to add value. Then the other venture is to do cornflakes.
Now we have started, although we are not in charge of the future. It is only God who is in charge of the future. We are not joking, we are serious. It is a business for us. We are not going to joke around. It has given me so much confidence.
Eye on future expansion
We have a bigger dream. Our dream is to try to get something big out of Soroti, then the other one is putting something in Lira, then Gulu and Arua. We shall make Soroti our major plant with satellite plants in the other cities and regions. In Arua, we are engaging a gentleman called Aita Joel (of Joadah Consult Ltd. fame). He has mobilized 35,000 former tobacco farmers in West Nile to venture into production of other cash crops. He alone may not be able to take all the 35,000 farmers, so we want to share the opportunities in West Nile.
We are already getting lots of interests from business people who want to work with us, which is fantastic. We are already engaging and working out deals, even before we have commenced operations.
Opportunities are outside Kampala!
As an individual, you can tell that most of my businesses are outside the city of Kampala. I can tell you that almost 99 percent of my investments are outside the city of Kampala. We only have an office here. I am hoping UIA can give me a small piece of land within Namanve where I can put up our Head Office. However, I still believe that it is important for Ugandans to know that there are investment opportunities outside Kampala. Primates Lodge is in Fort Portal, Simba Safari Camp, Elephant Plains Lodge and MV Kazinga are in Kasese, Budongo Lodge is in Masindi, and now Pela Commodities is in Soroti City. And I am not doing badly; the opportunities pay. I just need a small office in Kampala, a coordinating office.
What diversification means
It is a very exciting time for me, venturing outside tourism. I am also believing that agro-processing is probably a much bigger business for me and for all my partners. Our hope is that agro-processing will be able to even give us capital to be able to invest more in tourism.
The future of Uganda, in my opinion, is not even in oil where we are putting a lot of efforts. I think the future of Uganda, long term, is going to be focused on agriculture and tourism. That is where the biggest opportunities for Uganda are. Those are the lowest hanging fruits for Ugandans. In terms of beauty, per square kilometre, Uganda is incomparable to any country, probably in Africa. When it comes to agriculture, Uganda has got 85 percent of its land arable. She has got 50 percent of East Africa’s arable land, combined, which is a very fantastic thing. We have got two seasons. We are probably the only country in the region that has got two seasons for maize. So, it is amazing that you don’t necessarily need lots of fertilizers to get a bumper harvest.
A case for agro-industrialisation
Ugandan farmers won’t benefit much from primitive and subsistence farming. What is going to change and transform Uganda’s agriculture is the kind of thing we are doing: agro-industrialisation and its value chain which supports farmers and other stakeholders. The other thing that is going to be key is looking for markets internally and externally for our agricultural products.
Importance of investment license
I had never applied for an investment license before August 2020 and now I see myself being able to get investment licenses from UIA for all my businesses and bring them online. For me it would be nice for Ugandans to understand the importance of having an investment license. There are a number of Ugandans who have played a negative role in discouraging Ugandans from supporting Ugandans. I think UIA should continue looking at people like me who are serious because they are there.
There are many Ugandans who are serious but are not aware that there are quite a number of incentives for domestic investors. We are going to apply for tax relief because we are investing big time, which we think we shall get, from evidence we have had. Of course we are also engaging UIA to make sure that power and water get connected to the site quickly. Right now we are bringing water from outside the park. I think UIA will be able to facilitate this.
Information is power
One of the biggest problems with us Ugandans is that we are not curious people. We are not very deep in following up information. The foreigners always take advantage of looking up information and reading up. We tend not to be interested in information that can change our lives. I realized that UIA has lots of information on investments online. I would like to call upon Ugandans to understand that it is key to follow information but also test the waters to see whether things work or not, like I did with UIA.
Number two, I think UIA has a responsibility of engaging Ugandans, and as a country, to make sure people understand or know investment opportunities available. UIA, in my opinion, should link its awareness campaigns with opportunities and possibilities afforded by sister agencies. When we imported the agro-processing machinery, little did we know that they are exempted from taxation. This was very shocking to me, exciting as it is. If we were to pay heavy taxes on the machinery we would have most likely not invested in a processing plant.
Is tourism still a gem?
Tourism is Uganda’s biggest future, although as you can see we have been so reliant on the foreign market. To make tourism lucrative, we need to focus on the domestic market in the short term, then in the medium term focus on both the domestic and regional market, and in the long term focus on the international market. We need to make sure that Ugandans are touring their own country, Kenyans are flying or driving in to spend money in Uganda. If the Kenyans know about our great attractions they will come here. We must have a strategy that markets Uganda in Kenya and the region. That is very, very important. Kenya has been marketing their country for over 50 years, including here in Uganda. Each year, the Kenyan tourism agency takes dozens of Ugandan journalists to Kenya to report favourably on the country’s tourism attractions. So, Uganda needs to do the same. For us we are crawling in a state in which we should be sprinting, and yet the problems are also sprinting towards us because of mainly population growth.
Message to Ugandans
I have two thoughts. One is that the political class must know our current political challenges are economic in nature. The political problems won’t end if we do not address the economic challenges. Then we have close to one million people who are graduating from universities and other tertiary institutions every single year, across the country, chasing less than 50,000 jobs. Promoting investments will help in alleviating the challenges.
Young people should know that population growth also comes with opportunities and anyone who sits and waits for a politician is actually in trouble. If in 1996 I came to Kampala and waited for my village politician to sort out my problems I would not be where I am today. So, we need young people to understand that hard work pays and that being patient pays. It starts by taking personal responsibility.
The other thing that young people need to know is that there is a criteria you have to follow if you want to develop. First, it is very important for you to hone out a skill or sets of skills that others may need. After you have gotten a good skill, then make sure that you engage in networking, after which comes money.
A task for UIA
In the last one month I have had great chats with UIA officials about how we can integrate tourism with investment. I have given UIA the example of a country like Ghana which used to go out looking for investors. Then they realized that if they marketed Ghana as a tourism destination and brought tourists to the country, remember tourists are not poor people, they would benefit a lot. There is no poor person who will board a plane to come to Uganda, spend money on lodging, food and travel, and pay 600 dollars to go and see gorillas for an hour. That is someone who is exposed to knowledge, wealth and capital. So, it is important that we tap into that. Just like when Ghana did that, they started by providing free lunches to tourists during which they tell them about investment opportunities. Then they started the “Year of Return” campaign. Last year (2019), Ghana attracted investments worth between 1.5 and two billion dollars, from African Americans alone! We can do the same. The best person to invest in your country is the one who came as a tourist and fell in love with the country. Uganda is a loved country so tourism and investments should play a twin role.
I think God has blessed us Uganda, we are a great country. If we united, thought right, engaged well and run the country as a business, we would succeed. Uganda must be run as a business and not like a non-governmental organisation which gets free money from somewhere and distributes to people. No, we must think as a business – as a country, political class, business class, civil service, and citizens. That way we shall develop.
David Rupiny is UIA’s Media Relations Executive