Denis Jjuuko

Pulse Contributor

In March 2023, I wrote about<a href="https://www.pulse.ug/business/domestic/what-we-could-learn-from-kenyas-china-square-chinatown-uganda/rzqnqg4"> China Square in Nairobi</a> which was giving Kenyan traders sleepless nights while making consumers happy. We may not have paid attention as a country until a company with a similar name showed up. I have heard that they are similar to China something everywhere on the continent, selling stuff at laughable prices.

At 1.4 billion people, Africa has a huge population that needs goods and services and even though it is the poorest continent, the volumes businesses can push cannot be entirely ignored. That is why <a href="https://www.pulse.ug/news/local/police-shut-downschina-town-over-terror-threat/vgwqw0e">retailers like China Town</a>, China Square, China Mall and a plethora of others are here. Their model is the same; lower prices than elsewhere. I hope that they are selling high-quality goods that have passed the tests of Uganda National Bureau of Standards (UNBS).

Many traders are worried that their business models are being disrupted and their enterprises will collapse. They claim that they can’t compete anymore. That could be true. The Chinese are probably enjoying incentives from their home governments. The more products sold in consumer markets; the more days factories remain open in the producer markets. The more days factories remain open, the more people remain employed. The more taxes governments in producer markets earn. And the entire value chain is huge.

Read: <a href="https://www.pulse.ug/business/domestic/products-and-prices-inside-china-town-lugogo-store/npf7qd0">Products and prices: Inside China Town Lugogo store [Videos]</a>

Of course, these shops may not always sell imported products. Some may be locally made. The owners of such shops may approach manufacturers and sign contracts that give them lots of stuff in bulk at low rates. If a manufacturer is guaranteed a market at a certain price, they can be able to supply and remain in business.

With better experiences, technologies, capital, systems and structures, these retailers may become very hard for local businesses to compete. So what countries usually do is that they decide to protect their businesses.

The Americans have imposed high taxes on electric vehicles not made in the US because they know that Chinese automakers would make the likes of Tesla collapse or see a significant chunk of their revenue shrink.

Read: <a href="https://www.pulse.ug/business/domestic/a-look-at-prices-of-products-at-china-town-kampala-store/f9t97nm">A look at prices of products at China Town Kampala store</a>

They have also imposed bans on some Chinese smartphones like Huawei. They have been toying with the idea of banning TikTok, the popular addictive video streaming app. The Chinese also banned American apps, which enabled their messaging apps like WeChat and Weibo become so big in China.

The Europeans do the same. They have provided huge subsidies for their agricultural sector. In France, if you own a cow, you get an annual subsidy of EUR280 (Shs1.16m) annually. If you add in subsidies on land and other incentives, the farmer is in business. That also means that a farmer elsewhere can’t easily penetrate that market. There are also restrictions on importing beef and dairy products.

In Africa, South Africa has some of the continent’s biggest assembling plants for cars. To protect them, South Africa doesn’t allow the importation of vehicles at their end of life from Japan or elsewhere. In fact, they don’t allow you to import any used vehicles. You can only import a brand new car which is not made in South Africa. Basically, you can only import Ferraris, Lamborghinis, Rolls Royces and such other luxury brands. They impose hefty import duties on them as well. They know that if they allow anyone to import any car they want, the auto industry will die.

Uganda needs to put in place some protection policies and implement them. If Kiira Motors is making buses in Jinja, then they should not allow the importation of buses from anywhere else. You either buy the bus made in Uganda or forget about it.

If there are people making household electronics in Kampala’s industrial area or Kapeeka, then others should not be imported. That way the guy who set up his plant can keep their factory open. Of course, UNBS would have to double down on its quality inspection protocols so that they ensure that only products of highest standards are made and supplied. The government would have to nip corruption in the bud for this to take place.

However, in a globalised world, foreign investment cannot be fully eliminated especially in poor and transitioning economies. Global retailers and businesses would have to set up shop. Ensure that these global businesses are in partnership with local entrepreneurs that way they can learn a thing or two and will remain even if the foreigner decides to go. There will also be some capital that won’t be evacuated.

The writer is a communication and visibility consultant.

China Town Store at Lugogo Shopping Mall in Kampala, Uganda

China Town, a retail shop, in Lugogo without placing a single advert became the talk of town providing invaluable lessons for advertising and marketing executives.

China Town: Protectionism and partnerships critical for African economies

One Kenyan distributor had even petitioned the country’s standards bureau to complain about the quality of some of the products on China Square’s shelves. The standards bureau found the product to be genuine and from the same manufacturer. The Kenyan distributor was selling them at a much higher price compared to China Square.

Buoyed by the revelations of the standards authority, many Kenyans, as they usually do, turned to Twitter to argue that Kenyan traders were charging too much for the same product and that they had no problem buying from China Square.

Back home in Uganda, many foreign traders, particularly from Asia, have set up shop in every little building known as an arcade or mall. Ugandan traders also complain about the Indians and the Chinese undercutting them with cheaper prices, though being Uganda, these complaints haven’t received the attention of a minister or permanent secretary.

But what makes products of Ugandan traders from the same manufacturers expensive? There is the issue of high interest rates on bank loans. It is inconceivable how a trader borrowing money at highs of 25% can be able to trade and survive. Some even go to informal money lenders who charge as much as 10% per month or 120% annually. Unless you are selling contraband, it is not possible to do business where the loan interest rate is 5-10% per month. It is a license to fail.

The foreigners are usually coming in with loans at under 3% annually. Many actually don’t even have loans; they are using supplier’s credit, where suppliers and manufacturers give them goods on credit to pay back in a particular period long after the goods have been sold off. Many Ugandans also have access to supplier’s credit, though we are good at abusing it.

Many Ugandans, once they get goods on credit once or twice, change numbers and location. Eventually, they become endlessly broke and blame everyone but themselves. If you think this isn’t the case, how many people have borrowed money from you and paid it back? Or even paid it on time?

If people complain when you send them money on their mobile phone without asking them which number to send to (because they don’t want to pay back), what about a supplier in the Far East? So we end up all the time looking for money to pay new suppliers instead of cementing lasting relationships with the one who has been extending goods on credit.

Then there’s the cost of doing business. In downtown Kampala, you will find four traders or more renting one shop, but each is suspicious of the others. So, each of these four traders flies to China, Dubai, or Turkey to bring the same product. That is four air tickets, four hotel rooms (or some shanty digs in Deira), instead of one. The foreigners would send one person to do the shopping. In fact, they wouldn’t even send anyone—they would simply send an email, and goods are shipped in.

A foreigner who saves four air tickets and accommodation for a week will certainly sell their merchandise at a cheaper rate. Ugandan traders must create lasting collaborations with suppliers and also embrace technology.

And then, of course, our other weaknesses, such as diverting money for self-actualization projects: a house in the village in which we spend less than 10 nights a year, a wedding worthy of a top member of the royal family, a residential house in the city the size (and even shape) of a midsize shopping mall, a fancy but old SUV, a mistress in each corner of Kampala (for men), and a long line of children.

As many Kenyan traders are building and buying fancy apartments, the China Square people are most likely renting one within walking distance to their shop and only have a few children.

The writer is a communication and visibility consultant. <a href="null">djjuuko@gmail.com</a>. This article was originally written on March 23, 2023.

Newly opened China Town supermarket in Uganda

If you are an ardent follower of regional news, you have most likely come across China Square, a popular retailer located inside Kenyatta University’s Unicity Shopping Mall in Nairobi.

What we could learn from Kenya’s China Square

Although missionaries introduced some of their customs to Buganda and some were adopted, the custom of the firstborn son of the Kabaka succeeding his father never caught on. The Bazungu tried it, and it backfired.

Kabaka Mwanga II’s brother, Kiweewa, proclaimed himself Kabaka during the time Mwanga had been exiled in the latter years of the 19th century. The Bazungu were behind this because Mwanga was not cooperative with them.

Read: <a href="https://www.pulse.ug/news/local/how-does-a-prince-become-kabaka-of-buganda-kingdom/y3q224p">How does a prince become Kabaka of Buganda Kingdom</a>

The religious battles of 1884-1897 led to armed conflicts that saw Mwanga’s brothers Kiweewa and Kalema each trying to dethrone Mwanga. They allied themselves with whichever religion they thought was strong.

Mwanga was overthrown and exiled with Kabalega in the Seychelles 🇸🇨. That led to Kiweewa and Kalema becoming Kabakas for short periods each until 1897, when the one-year-old Daudi Chwa, Mwanga’s son, was proclaimed Kabaka. The Baganda opposed Kiweewa and Kalema’s reigns.

See: <a href="https://www.pulse.ug/entertainment/celebrities/prince-richard-ssemakookiros-cake-refusal-at-coronation-sparks-curiosity/wh0s2fb">Prince Richard Ssemakookiro's cake 'refusal' at coronation sparks curiosity</a>

So why doesn’t Kiweewa, the firstborn son of the Kabaka, become Kabaka? There is no crown prince system in Buganda like with the British or Saudis. This is because the Baganda thought that automatic succession could destabilize the kingdom.

If a Kabaka lived a long life, the Baganda thought, the crown prince could kill him so that he could take over. So they opened up succession to any other son apart from the Kiweewa.

However, the reigning Kabaka can make changes to any norms as he may wish depending on prevailing circumstances. So it is possible that a Kiweewa can become Kabaka in the future.

In fact, some people had expected Prince George Mawanda, a Kiweewa, to become Kabaka instead of Muteesa II because their father Daudi Chwa II had accorded him special treatment. However, Chwa II told all his children that he preferred Muteesa to inherit him.

Related: <a href="https://www.pulse.ug/news/local/kabaka-is-not-the-father-of-the-twins-buganda-kingdom/dhk5mdq">Kabaka is not the father of the twins - Buganda Kingdom [STATEMENT]</a>

The reasons Chwa II gave were based on religion, arguing that since Mawanda’s mother was not the church-wedded one, the Bazungu would fight him and further create more conflicts in the kingdom. Mawanda ended up as his brother’s ADC since he was a lieutenant in the Uganda army.

<div class="embed"><blockquote class="twitter-tweet">Kiweewa is a title given to the first born son of the Kabaka. But why isn’t Kiweewa eligible to succeed his father? A 🧵&mdash; Denis Jjuuko (@Denis_Jjuuko) <a href="https://twitter.com/Denis_Jjuuko/status/1820804188395184328?ref_src=twsrc%5Etfw">August 6, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

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When Muteesa II was exiled in Britain in 1953-1955, the British tried to install Mawanda as the Kabaka, and even Obote toyed with the same idea after the 1966 crisis. But the Baganda were not open to that idea, after all, Muteesa II was still alive.

Kiweewa is a title given to the firstborn son of the Kabaka. But why isn’t Kiweewa eligible to succeed his father?

Why the Kabaka's firstborn, Kiweewa, can't succeed him

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Denis Jjuuko

Articles written by the author

China Town: Protectionism and partnerships critical for African economies

What we could learn from Kenya’s China Square

Why the Kabaka's firstborn, Kiweewa, can't succeed him