How did you become Africa’s 18th richest person?
Our group has invested steadily and has been very consistent, which has had a compound effect on our investments and the kind of assets we have. And also by the sheer nature that FORBES showed interest in Uganda, or has done more research in Africa and has taken more interest.
Tell us your story.
One of the first businesses we started dealing in was salt and the other was in beer—a rare and very fast-moving commodity—followed by other commodities… very soon we became one of the largest beer dealers in the country and this went on until about 1989. That is when the breweries refurbished themselves and started the production of beer. When they started production, they lobbied to the government to stop importation to protect the local industry and jobs. The government obliged… we had built up a huge clientele… all the hotels in town would buy beer from us; we would have expatriates buying beer from us. At the time, foreign exchange was not allowed for luxury items like beer. So what would happen is that people would rent their houses in foreign currency. When they received their rent they would come and change it with us. In the meantime, the expatriate community needed to buy local provisions for their daily requirement. They would buy beer and other things from our store, they would also come and exchange foreign currency. We needed this foreign currency to pay for the importation of beer…
Sudhir
After the closure of the beer business there were lots of people who wanted to change money with us. We started buying this currency and would actually deal with a trader who would need foreign currency to buy certain types of goods, we would swap this with local currency. Come 1990, Uganda liberalized the formal market, it was the second country in Africa to do so—Ghana was the first. We opened the first foreign exchange bureau called Crane Forex Bureau. Within six months we were doing more business than the banks’ foreign exchange departments. What transpired in the next two or three years was that the banks worked together and formed a cartel that would hit the forex bureaus by levying high charges and restraints. I realized that in order to sustain us we needed to go into the banking business so we eventually opened the first branch of Crane Bank on August 21, 1995. We had accumulated a lot of funds, so we were buying a lot of real estate. We bought our first property in 1991… The government nationalized all real estate, then the NRM [National Resistance Movement] government decided to return the Asian properties to its former owners but a lot of these people had settled in the West. They were doing well and had their families there, not all of them had intentions to come back. At that time there was an excess supply of real estate. The Asians who had property here never dreamed that this property would be returned to them so they came and cashed their money in. In the beginning, a lot of people were very skeptical about buying into the property: they were not sure about what would happen in the future. Now, we have a surplus of real estate in the country and people did not want the risk. I was one of the very few people at that time, who had faith in myself and I started investing at that time. Ever since then, we [Ruparelia Group] never looked back.
What is your view on the current state of the economy?
At the moment we are going through a restructuring. I guess this is always a good thing to do—a time to relook at all your businesses, trim them and flush out any inefficiencies. The problem here at the moment is that the politics are delaying the passing of a law, which will regulate the oil industry. Uganda desperately needs to pass these oil laws so when the oil comes, it is regulated and there is a transparent process it goes through. They don’t realize that every day they delay it, it costs the country a lot in lost revenue. So the government needs to clear that up.
What is the biggest weakness of the Ugandan economy now?
The left doesn’t know what the right is doing, unfortunately. The decision-making process of this country has gone very bad. Although there are a lot of processes, unfortunately these checks and balances have been misused, thereby the people have been scared into making decisions. The only way people feel they will survive in the job is by not making decisions and that’s very bad.
Recently donors have cut back on aid. Will this hurt the economy?
We don’t have only the issue of donors cutting aid; we have the issue of interest rates and of exchange controls – the foreign exchange rates. Now, Uganda cannot afford to have low interest rates at the moment because there will be capital flight out of the country. At the same time, it will have an effect on the foreign exchange rate. The currency depreciated by 8% at the end of last year. When you have further bad news by donor countries holding onto aid, it will have a negative effect on the country. I think Uganda gets about $800 million in aid and that is quite substantial as far as the budget support is concerned.
What should the Ugandan government do to promote entrepreneurs like yourself?
I think it’s always nice to have a government which has departments that make decisions. I think the decision-making process has deteriorated, that’s number one. Number two: the government needs to seriously finish all the regulatory bodies that are needed for the oil to take off. That’s the savior of this country. And if they can’t make decisions on how to solve oil regulation within the ministry then we are not going to go anywhere.
And the entrepreneurs? What can government do to promote businessmen such as yourself?
The only way any country can come out of unemployment is to support private industries, private entrepreneurs, who will then create jobs. They can’t solve all the problems of the nation but it will reduce unemployment and the other issues that go with it. Government went through one phase in 1990 when they first came in to support the industries and private enterprises. They brought in a lot of incentives, which has helped this country to get to where it is now. All it needs now are proper policies and if its oil is sorted out then industries will come here. Government does not need to do much more, just clean up its oil industry. If the oil is controlled and regulated and being produced you will see people queuing up to invest in this country.
What are your plans for 2013?
We have a lot of investments in real estate and we will continue [to invest]. We have projects of more than $150 million in the pipeline and we will fulfill those within the next 18 to 20 months. And hopefully, target a lot of service industries, which will service the oil industry; accommodation, education.
Do you think you will grow in the ranks in 2013?
Definitely. We have a lot of oil in this country and you can imagine that we have not even had one drop of oil come out, and the kind of resources that we have mobilized within the group.
Do you think you’ll be in the top 10 next year?
I am not sure but I am very happy to be at number 18 this year. The next few years will definitely have some kind of an impact. Crane Bank is expanding rapidly, it has 27 branches. By the end of this year, it will have 40 branches and then the year after, another 10, and it will continue to grow by at least 10 branches a year.