The domination of Kenya in East Africa’s economy is obvious. A survey carried out by Summit Business reveals that foreign CEOs, especially Kenyans, have completely taken over as CEOs in Uganda’s top sectors especially insurance, banking, and hospitality.
One of the top entrepreneurs reckons Kenya will be the manufacturing hub of East Africa by 2030 due to the said high work ethics and productivity in Kenya compared to other East African countries. Decisions by BATA and BAT to transfer their manufacturing operations to Kenya validate the prediction.
Other top supermarkets in the country import all and sundry (including mangoes and tomatoes) from Kenya for sale in Uganda, as the country, slowly but surely turns into a supermarket of sorts.
A close look at the stock market reveals a quarter of the players in the country’s growing stockbrokerage industry of funds management, investment advisory and other industry licensees are Kenyans who seem to have a better formula at succeeding in corporate Uganda. PineBridge Investments country manager Nicholas Malaki, UAP Financial Services general manager Patrick Ndonye, and CfC Stanbic Financial Service’s Consolata Mburu are some of the Kenyans in top positions at Ugandan financial service firms.
And that is not all. Leading insurance companies in Uganda are all headed by Kenyans.
Is it corporate mafia, voodoo or Ugandans are just too lazy to make exceptional chief executives and lead the companies to success?
Lion Assurance, Jubilee Insurance, AIG, ICEA, and several of them all – are headed by our brothers and sisters from across the border. It became so overwhelming that the sector’s regulator (Insurance Regulatory Authority) had to make a special policy requiring entrusting locals with top positions as a way of capacity building and knowledge transfer. How can industries, or the economy for that matter, develop if the nationals are not in the game? The new insurance policy restricts foreign experts to two leadership positions only. Other positions must be occupied by locals as a way of ensuring sector growth and addressing the growing concern.
Much as the economy is ‘liberalized’, IRA’s intervention is timely. You cannot do the same things over and over again and expect different results. Insurance in Uganda had almost stagnated. Thanks to the IRA CEO, great strides are being made. New insurance products and policies specific to the local market are coming out, claims turnaround time is reducing and the newly empowered insurance institute is churning out great local talent and the industry is taking new shape.
It had to wait for a law to compel insurance players to contribute to the training fund. Thanks to the lobbying of many local executives specifically Hajji Kaddunabbi Lubega, Geoffrey Kihuguru and Ronald Zake, some of the top local insurance CEOs this country has produced. This is not to say Kenyans have not done a lot to shape the market.
Enter banking and the picture is almost the same. Stanbic bank, the country’s market leader (with more than 20 per cent of the market), is headed by Phillip Odera. Under his able leadership, Stanbic has not only maintained the number one place, its assets and profits have consistency outperformed the market. Stanbic bank’s total assets hit Ugx 3.10 trillion last year reflecting 20.46 per cent market share. The bank has kept top on six of the seven key variables used to evaluate the strengths of commercial banks.
Fast growing Equity bank, NIC bank, KCB and several others are all headed by Kenyans. Banks from West Africa have for long been dominated by Nigerians but this trend is likely to change. Nigerians have failed flat to lead any bank in Uganda to noticeable success. They are said to be turning to Kenyans, as these are said to have a formula for succeeding in the local market. Across the borders, there is no Ugandan CEO in any bank operating in Kenya. In fact, there is no Ugandan CEO in any bank outside of Uganda.
The story does not end here. A visit to any hotel will confirm to you that Ugandans are slowly being pushed out of this fast-growing industry. Kenyans are said to be detail-oriented, experienced, aggressive, and generally better employees. This means any employer will prefer a Kenyan to their Ugandan counterpart. Whether it is prejudice or not, Ugandans are said to be lazy, reckless and laid back. There is even a rumour that an average Kenyan is so productive that he can do work which would require six Ugandans. Surely! What about the theory of synergy or Kiprotich?
Supermarkets, schools, consulting firms and public relations business have seen proliferation of Kenyan talent as top honchos or key employees. The trend will only continue. Without being anti-Kenyans, we explore the secrets for their success in corporate East Africa.
Kenya has been politically stable for a long time, save for the 2007/08 election violence that derailed the economy slightly. This made it attractive to foreign investment. As Uganda was busy fighting internal wars, Kenya was gaining on the economic front. This positioned it as a top destination for Asia and Africa at large. Many Kenyans of Indian origin run the manufacturing and retail sectors in Kenya.
Political stability meant low ‘political risk’ compared to Uganda. International businesses preferred making long-term investment in Kenya and an occasional short-term stint in
Uganda – ensuring to retire their investment just before the ‘next’ election. And that has been the story since independence.
Now you have all international businesses operating in Uganda with headquarters in Kenya. From Citi bank to AIG, PwC, to marketing firms, Unilever to Microsoft or Google, Kenya is the headquarters of them all.
The key secret for the success of Kenyans is that they are shareholders in most international companies that register to operate business in Kenya. As shareholders, they have significant influence over how the affairs of the business are run like senior leadership appointments, strategy, capacity building and sustainability. For example, if Google is in Kenya, the CEO or the position below will be held by a Kenyan. That is not the case in Uganda.
Majority, if not all, of international companies in Uganda are owned by Kenyans and Indians. If Microsoft or any of the big four audit firms like KPMG or Deloitte is in Uganda, chances are that Kenyans, not Ugandans, are registered shareholders in the local operations.
Uganda has over liberalized everything so much that there are no limitations on foreign ownership of critical businesses and industries. Many countries make it difficult, if not impossible, for foreign investors to own 100% the business. To operate, a foreign investor must find a local business partner. This empowers locals to participate in decision-making.
And now you will hear someone say Kenyans are exposed and well-trained. It has been deliberate. As owners, they have participated in the budgeting process and influenced companies to provide for capacity building of Kenyan employees. In one of the contract this magazine saw, it was explicit in the MoU: “Xx to train 20 employees in California at Xx headquarters in technical and leadership skills.” That is the level of detail and focus that has empowered corporate Kenyans.
As peace returned to Uganda, it was too late to obtain direct connections to international companies. Today, 90% of all international businesses in Uganda report to Kenya headquarters. As such, Kenya dictates on the people to recruit as CEOs. Every businessperson will work with people they already know and trust, whether these people are great or not. So, a new international company opening an office in Kampala will have a CEO posted from Kenya who will come along with their colleagues in the top ranks. That is how Kenyans have managed to lead the pack. They take decisions that matter. It is not that Ugandans are lazy, they just don’t own many things, if at all anything!
As we wrote in the May 2013 issue of SBR, “unlike Uganda, Kenya does not have so many people in villages. Uganda often talks about 80% of her population living in the village which is not the case in Kenya. People who stay on ancestral lands like the Red Indians and Aboriginals never develop as they don’t get exposed and pressured to think aloud.”
People living in their ancestral homes have a laid-back attitude. They can easily grab a pawpaw or mangoes from a neighbour in case of no income. That is not the case for people who have been displaced. You must work hard for a living. No free lunch. No neighbours for a free fruit. Ugandans in the diaspora are said to be some of the best executives and employees. They are hardworking, focused and very thorough. They know that only through sweat can food come onto the table and there is no shortcut.
If you have been a former Nkuba Kyeyo, you know what we are talking about. You must keep both a day and night job to eke a living whether in London or New York. That is what unsettling people does to productivity. Most Kenyans, whether in Kenya or Uganda, are unsettled.
Most Kenyans see a job as the only thing for their survival. They will do anything to hold on a job because it means everything. They will not take it for granted, which is not the case with most Ugandans who will say things like “Akugoba y’akuwa ekkubo’’, meaning whoever terminates you gives you the way [to success].
A story is told of a Kenyan hotel manager, who was dismissed on the account of poor performance and repeated complaints from customers. As he exited the disciplinary hearing, he committed suicide by jumping off the 10th floor of the hotel complex. He saw no future and livelihood without a job. That is how valuable Kenyans respect their jobs and will do anything to retain them.
Ugandans will find so many reasons to apply for leave – to bury a relative or attend to a sick relative and a plethora of so many reasons for not coming to work that productivity is hit. The excuses increase as someone is given more senior responsibilities. And they will avoid being held accountable. Unlike Uganda, in Kenya burials are done only on weekends. A Kenyan will not miss going to work because a neighbour died. In Uganda, when an employee loses a relative, an old friend, or neighbour, he will not work for days. And when he returns next day, s/he falls sick. Then another day for attending last funeral rites. These acts have a direct impact on productivity.
Most Ugandans are said to be backward and jealous of the success of their colleagues. A Ugandan will not attempt to help a fellow Ugandan close a deal that will make them richer. They will try to fail the deal in the background at any cost. And if someone happens to know your background or family, they will even try to fail you the more. Don’t confuse this with the nepotism of ‘know-who’ as many Ugandans will give opportunities to their blood relatives and close friends.
Kenyans in Uganda, on the other hand, are not jealous of their friends’ success. They are said to keep a database of all Kenyans in Uganda. That team work ensures that they share and give business leads to one another within their network before it gets to anyone else. They know all accountants, entrepreneurs and what they do and dealers. They have a forum once in a while where they meet and share experiences and any upcoming opportunities in their own companies. Before a Ugandan gets to know of the deal, they have already ‘won’ it. That is what business success is all about.
This article first appeared in the Summit Business September, 2013.