Ugandan Shilling Hits Greatest Low in 18 Years
The shilling is the worst-performing currency against the dollar in the world so far this year, depreciating to 2,780 per dollar around 4 p.m. today. Oil importers and telecommunication companies have played a strong role in the demand for U.S. currency, Bloomberg reported.
The shilling is the weakest against the dollar that it has been since July 1993. The U.S. dollar has been strengthening significantly on the international markets as well, despite the S & P downgrade of the United States, due to international financial turmoil, particularly in the Eurozone.
In June, the shilling traded at sh2735/2750, but a Central Bank intervention strengthened it to sh2400, New Vision reported.
President Museveni spent one-third of the state budget—or 1.3 billion USD—in just the month of January 2011, shortly before the national elections. $720 million was also spent on buying six Russian fighter jets, the Council on Foreign Relations reported.
Ugandan opposition leaders vowed yesterday to begin protests over the rising cost of living, particularly fuel and food, AFP reported. Inflation last month reached 18.7 percent.
Kizza Besigye and other opposition politicians pledged to restart the walk-to-work protests at a candlelight vigil in Masaka for a toddler shot by a security officer in April. Besigye was recently cleared of all charges against him connected to the demonstrations early this year.
As opposition supporters went to lay a wreath at the home where the child was shot, the army and police fired teargas into the crowd. The Ugandan police spokeswoman Judith Nabakooba said any protest would be stopped for security reasons.
The Minister of Security, Wilson Muruli Mukasa, said that the opposition is using Twitter, Facebook, and Youtube as part of a “grand plan” to topple the government, BBC News reported. Social media was being used, he said, to “psychologically prepare the people, especially young people, for armed insurrection”.
The government has voiced concerns that Besigye will organise an Egypt-style uprising gain power through the streets after losing elections in February, according to BBC News.
Read MoreThe State of the Ugandan Shilling
New York (Ugandans Abroad) — Uganda has seen an unprecedented rise in protests triggered by the cost of living back home, and the dire condition of the shilling. Traders and others in the business community recently closed shop to protest the high fuel prices and a weak shilling, which yesterday was valued at sh2605 to one dollar, and has dropped as low as sh2700.
Despite recent Central Bank interventions, the shilling has been at some of its lowest levels against the dollar. There has been a 15.8 percent inflationary spike in Uganda, and regionally, Kenya has seen inflation at 14.5 percent. Tanzania is facing 10 percent inflation, while only Rwanda has kept inflation in single digits at 6 percent.
Regionally, consumers are hurting back home as their savings and salaries shrink in purchasing power. Bloomberg, a financial news agency, recently named the Ugandan shilling as one of the worst performing currencies in the world, as it has slid a sharp 12 percent since January.
The Kampala City Traders’ Association held a two-day strike and called on the government to fix the exchange rate at sh2000. The government said this would violate the country’s open market dynamics, and require the government to subsidize traders by about sh500 per dollar, still harming consumers.
Maria Kiwanuka, the minister of finance and economic development, told Parliament that there are only mid to long-term solutions to the structural imbalance. Much of this, she said, depends on the recovery of global export markets, as well as the rate of recovery by advanced economies to current financial crises.
Despite this, the Bank of Uganda launched a program called Inflation Targeting on July 5th, which will use a Central Bank Rate (CBR) or interest rate, to guide seven-day interbank interest rates. The rate will be set once a month and publicly announced to clearly announce the government’s stance on monetary policy during the month, according to Dr. Louis Kasekende, the deputy governor of Bank of Uganda.
The CBR will be set at a level which is consistent with moving core inflation towards the Bank of Uganda’s policy target of 5 percent over the medium term, down from its 17-year high of 16 percent in May. It is similar to the London Interbank Offered Rate(LIBOR), adopted in the mid 1980’s by the world banking system as a much needed benchmark for short term interbank loans, which are fixed every business day in the UK.
The CBR is seen as a welcome sign for an economy facing inflationary pressures, a volatile exchange rate, rising interest rates and increased friction between the private sector and the government.
Peter Muzoora is an accounting student at Baruch College and a contributing writer based in New York. He can be contacted at petermuzoora@gmail.com.
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Where to Eat in Kampala
Many aspects of Kampala can be overwhelming to visitors, and the dining experience is no exception. With food from just about every continent around City Square alone, it can be hard to choose just one.
1000 Cups, located on Buganda Road, offers a quick and delicious caffeine boost of Uganda’s finest coffee. Ruarri Serpa.
All the options means that it’s easy to avoid the fall-back choices – American, Chinese, and Indian, and opt for more exotic tastes, like Greek, Turkish, Korean, or Cuban.
The prices vary as much as the styles – Antonio’s Grille, by City Square on Kampala Road, has quick meals for under USH6,000.
Upscale Fang Fang, however, will send you back to the ATM.
I arrived in Kampala with one clear goal that relieved me of all those choices – coffee. 1,000 Cups was
the place for my fix, and that gave me a place to sit and think (Plot 18, Buganda Road, if you’re in the
need).
Each visit is like a trip to America – switching between my iced mocha latte and the day’s New York Times, I noticed they were playing “ Born in the U.S.A.” over the radio.
My coffee cost USH5,000, so I chose to pass on the carrot and coconut cakes for USH3,000. Located a
little too close to the craft shops, 1,000 Cups might not be the best option for those who want to avoid
looking like a tourist, but it’s a quiet and relaxing place to work, nevertheless.
As dinnertime approached, I weighed my options. Joanna, a waitress at 1,000 Cups, recommended Chong Qing, in nearby Nakasero for dinner. “ The fish brings me there every time,” she said. “ I’m a rice and fish girl.”
You might enjoy eating pork sticks at Faze 2, an oasis of calm in bustling Kampala. Ruarri Serpa.
But if she’d been away from Uganda for months and was just returning, she would choose Faze 2 (10 Nakasero Road, Nakasero). Faze 2 captures the diverse food choices within Kampala, with a full menu of Western, Asian, and African entrees.
Plates at Faze 2 start at USH12,000, but I learned the hard way that drinks cost almost twice what they would at other places.
Beneath a canopy of trees, the largely outdoor restaurant was another quiet retreat from Kampala’s busy downtown. The dining area was less than half full by late evening, and it was mostly a local business
crowd.
I was surprised to see “ Roasted Pork Fridays” was in full swing, and two or three people could eat for USH30,000. “ The pork was good, but a little skinny,” said a man who had just finished a corporate
dinner there.
Despite how skimpy the pork sticks actually werea, it was a popular choice, especially for the mixed local/foreigner parties. Ugandan, American, and Chinese were all options on the menu, but
roasted pork won the night.
1000 Cups’ convenient location makes it an easy place to get work done. Ruarri Serpa.
The atmosphere was relaxing, but the prices of the drinks means I’d be quick to choose another bar if I was to stay and lounge. The service was quick and attentive, and I was on a boda-boda headed for the Taxi Park by sundown.
Attempting to navigate the evening Kampala traffic was a good reminder at how surprisingly easy my restaurant cruise had been – especially in a city with hundreds of choices.
Foris launches 4G internet platform
Foris telecom, a subsidiary of the Israel based Foris Group, has launched its 4G internet platform setting the stage for yet another round of competition wars.
In a press briefing in Kampala on Wednesday, Mr Moshe Mitz, the Foris telecom Uganda chief executive officer said: “We have identified price and slow internet speed as the biggest barriers for users in Uganda, therefore our launch is indeed timely.”
He said: “Our commitment is to offer value for money services to Ugandans, including the underserved.” The launch comes at a time when users themselves are still familiarising with the Third Generation (3G) internet platform launched recently by MTN and Orange telecom.
According to Mr Mitz, Foris telecom, a global wireless internet provider, offers quality and high speed internet at affordable prices. The introduction of the 4G wireless mobile WiMax broadband technology that will offer instant and high quality connectivity is the first of its kind in the local market.
Other platforms
Internet service providers in the country have been providing 2G, 3G and of recent 3G+ platforms. It is also the first internet service provider to offer pre-paid solutions in the market with scratch cards ranging from 1 upto 3 Giga Bytes.
The telecom operates under its Foris flagship brand. Mr Mitz said the solution will focus on meeting the needs of the underserved broadband market in Uganda, including residential areas and students. The packages cater for all market segments, including students and business.
Read MoreMake delighting customers your norm
LOSERS
Are some of the people you hire costing you lost sales? A few days after the World Cup Final, my friend William a devoted and loyal Nakumatt customer happened to be walking past Nakumatt and decided it would be a good place for him to purchase airtime. At the supermarket entrance, the plain-clothed security officer responsible for scanning everyone as they enter stopped William to let him know that he could not enter the supermarket with his computer bag.
When William innocently asked where he could leave his computer bag, the security officer informed him that he simply would not be allowed to get past that particular point, and that was the end of the story.
Interestingly enough, a uniformed guard who happened to overhear the exchange came to William’s rescue. The guard showed William where he could leave his bag before entering the supermarket and as they headed to that location, William let slip that as a loyal Nakumatt customer, he was completely disappointed by the rude treatment he had received especially since all he wanted was airtime!
The helpful guard then showed William a jewellery shop where he could purchase airtime, without having to leave his bag behind! I shudder to think of the number of customers that have suffered a negative experience at the hands of Nakumatt’s unhelpful security officer, and the resulting amount of lost sales.
What makes that security officer a loser? Ignoring William’s question, having the audacity to rudely turn him away with no solution and more likely than not, treating other Nakumatt customers similarly!
Offer solutions
WINNERS
What impression do you have of NSSF and its ability to quickly deliver on promises? My friend Sally recently emigrated from Uganda to the United States. With no plans of ever returning to Uganda, prior to her departure, Sally decided to claim her full NSSF entitlement, including interest. Contrary to the lengthy amount of processing time that both Sally and I imagined such a request would take, the entire exercise from document submission to receipt of funds took just under one month!
The Customer Service Officer (CSO) handling Sally’s request not only sent her weekly e-mail updates, but also took the trouble to follow up with NSSF internal audit personnel (who responded in a timely manner) when Sally sent an e-mail asking if she could submit alternative proof documents supporting her claim. In Sally’s own words, “I received very attentive and quick service – I was amazed!”
What makes NSSF a winner? The two different officers who offered Sally helpful and quick service point to the value NSSF places on delighting its customers.
Read MoreIs your company doing enough to promote its brand?
A brand is a “name, term, sign, symbol or design, or a combination of all intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers.
Branding is not about getting the target market to choose you over the competition, but it is about getting the prospects to see you as the only one that provides a solution to their problem.
“To succeed in branding, one must understand the needs and wants of his/her customers and prospects. This can be done by integrating brand strategies through the company at every point of public contact,” Mr Jawad Jafer, Superbrands East Africa project director says.
According to him, a brand resides within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which can be influenced while others cannot be influenced.
“Great brands have something beyond primacy of product or service, high levels of awareness, satisfaction and ubiquitous distribution. They stand for something in the minds of consumers but above all these, they have established a bond primarily emotional between themselves and consumers,” Mr Jafer says.
For example in Uganda, some of the big brands include: MTN, Nokia, Coca-Cola, Business Power and Colgate among others; this is according to a survey carried out by Superbrands recently.
Mr Jafer advises that a strong brand is invaluable as the battle for customers intensifies day by day. He says that it’s important for a company to spend time investing in researching, defining, and building a brand. After all the brand is the source of promise to the consumer and it’s also a foundational piece in marketing.
When creating a brand strategy for a product or service, it is important to perform a careful analysis to determine principal barriers that you may come in contact with. These barriers are also known as market conditions that can keep your product or service from achieving success.
Mr Alex Wanjohi, the managing director of Chartis Uganda, says branding is also a form of lifestyle, because the consumers identify with your organisation for the reason that your services also happen to be their way of life.
He says that in most cases, it’s not about the name but the relationship between the organisation and its customers. “We recently rebranded from AIG insurance to Chartis but this has not affected our business instead it has had a positive impact because of the hype it generated. Besides our customers have continued to identify with our services which have become a way of life for them,” Mr Wanjohi explains.
Mr Daniel Ekisa, the operations manager of Basic Investments Limited, a marketing consultancy firm on Kampala Road says: “By branding, we add value to our clients by providing real clarity of thinking around their target and what their go-to-market proposition needs to look like to successfully compete,” he explains.
How to come up with a branding name, Mr Ekesa says that since a brand sells a product, it’s always advisable to sit on a round table with a client and exchange ideas.
Read MoreTurkish Airlines to Launch in June
Turkish Airlines, Europe’s fourth largest passenger carrier is expanding its global presence as it focuses on launching a new route to Entebbe next month.
The over 77-year old air transport carrier, will operate both passenger and cargo business from Entebbe to Istanbul, New York, Chicago and the rest of Europe.
In an interview with Daily Monitor, lsat week Mr Orhan Subay, the Uganda Turkish Airline director said the move aims to improve working relations between the two countries which will eventually spur business, education and cultural growth.
He said: “We are looking at a wider perspective where we shall both benefit. The Ugandan community will trade with Turkey because of quality products and the Turkish will tour Uganda’s beautiful sceneries and boost tourism.
The Airline will officially launch on the Uganda route in June at Entebbe international airport.
The route will fly the 8030s planes, which have a capacity of between 260 and 270 passengers and RCG cargo planes.
The launch of the Turkish airline Entebbe route will bring the number of Airlines in Uganda to over 15 including Air Uganda, British Airways, Brussels Airlines, Dairo Air Services, Eagle Air, Egypt Air, Emirates, Ethiopian Airlines, Fly 540, Kenya Airways, KLM Royal Dutch Airlines, Precision Air, Rwanda Air and South African Airways among others.
Mr Subay, however, said the low flight charges will give Turkish Airlines a competitive edge in the growing Uganda airline industry.
Launch charges that will run from June 14 to August 14, are about Shs0.55m for a return ticket from Entebbe to Istanbul inclusive of taxes and about Shs0.54m for a return ticket from Istanbul to Entebbe.
Financial Goal Setting In 2010
Whether you read this article in the beginning of the year or later in 2010 a great question to ask yourself is “What are my financial goals this year”?
There are so many products and strategies out there from annuities and life insurance to mutual funds and fee based planning. One could argue that one investment option is better than the next one but any solid financial advisor will quickly tell you that it depends on the situation. We are coached by our compliance departments to learn about our clients’ risk tolerance and time horizon before making investment advice. However, one of the main reasons I win clients is because of my ability to help my clients indentify and set their financial goals. This is based on the responses I get from my clients who interviewed other advisors before they chose to do business with me.
Stephen Covey says in The Seven Habits of Highly Effective People to “Begin with the end in mind”. I use this strategy in my financial planning practice. Together with my client, we drill down to paint the picture of how they want their retirement to look. Once they begin to feel excited about some of the things they will enjoy during retirement they can prepare to stay disciplined along the way. When you walk past the refrigerator on your way out the door to work and see those pictures of what your retirement future holds it is easier to work harder with greater hope and conviction that you will succeed.
I love working with clients who have a passion for where they are headed. People with a dream and a goal are easier to advise and respond with more enthusiasm to appointments and phone calls.
I encourage you to sit and think about what kind of retirement you want. Talk to your spouse and set realistic goals. Goals should be out of reach but not out of sight. Don’t be afraid to stretch yourself. We tell our kids that they can have and be anything they want in life. In most cases, this is still true of each of us as adults.
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