[Interview] Maria Auma, CEO, Blue Luxury Investments, Uganda
Maria Auma is a Ugandan entrepreneur and investment specialist. Her company, Blue Luxury Investments, specializes in connecting investors with viable businesses.
Would you please introduce Blue Luxury Investments?
Blue Luxury Investments is an investment management firm that matches investors with feasible businesses. We started operations in 2014 with the goal of improving the overall macroeconomy of Africa and leaving a positive impact on the lives that our investment projects touch.
We currently operate in Uganda for the East African region, have a registered office in the UK and partners in the US.
What are your USPs?
Strong partnership base with a clear deal flow structure: Our partners are beneficial to us in the sense that we are able to share potential businesses with each other, and work across our capital allocation limits. This is a more efficient and effective way of sourcing businesses because our partners understand the nature of our business and the need to evaluate entrepreneurs before engaging them. We also have the privilege of participating in accelerator programmes within the region which is a cost-effective way of seeking out talent.
Diverse investor database. Because we operate not only in Africa, it affords us the opportunity to court investors across the different continents and understand their investment criteria. We engage with family offices, high net worth individuals, Africans in the diaspora and international financial advisors and institutions. This is a wealth of resource for our fundraising activities and gives us the necessary pool of funds for businesses seeking finance.
Are there any recent policy changes in Uganda that directly affect businesses, positively or otherwise?
Sure. There's the axle-load rules. The introduction of axle load rules by Uganda National Roads Authority (UNRA) has greatly affected the transportation sector where a lot of businesses have had to follow restriction with regards to loading limits, or face hefty fines.
There's also the Certificates of Origin. The Uganda Revenue Authority (URA) will now take over the responsibility of issuing Certificate of Origin instead of the Uganda National Chamber of Commerce and Industry in accordance with the East Africa Customs Management Act of 2004. This is meant to streamline and fasten the importation process.
And there's the Renewable Energy VAT imposition,, which stipulates that supply of solar-generated power will be subject to VAT at a standard rate of 18%. Traders and producers of solar power will be required to register for VAT and recover input tax paid which will in turn reduce their operating costs.
How would you assess Uganda’s economic performance in 2016 overall?
Uganda’s GDP increased from 5% in 2014 to an estimated 5.6% in 2015 driven by infrastructural development primarily being funded by the Chinese, according to data released by the Uganda National Bureau of Statistics (UNBS). The official outlook is that Uganda’s economy is projected to grow by 5.5% in this financial year with Bank of Uganda cutting central bank rate (CBR) from 17% to 16%. This will improve access to credit for the private sector and aid economic activity. Over the medium term, GDP growth is projected to average 6.3% per annum.
What can Uganda do differently this year to achieve better results?
The government and private sector need to consider placing more emphasis on financial inclusion. Applications like mobile money should be key areas of engagement within various sectors in the economy. Statistics show that mobile money subscribers make up 53% of the population, of which majority are in rural communities. Harnessing the power of the mobile platform can go a long way to improve access to finance and financial services like saving and insurance schemes in a way that traditional banking may find challenging.
To steer growth, proper infrastructure, reliable accessible energy, transport and communication services need to be improved concurrently. This requires a lot of investment and inter-sector collaborations. Some of this can be achieved through liaising with and lobbying for suitable Foreign Direct Investment and Foreign Aid that will have a trickle-down effect on the communities that require these services and necessities.
What can you say about the targets, plans and ambitions of Blue Luxury Investments for 2017?
This year we plan to set up two funds targeted towards Africa. We are just now in the process of setting up our first fund, and have also taken on a new partner who brings on board a wealth of international experience. This fund will be targeted at early stage and growth companies within East Africa. We are also renewing partnership with accelerator hubs in the region and continuing to not only court family offices but also Africans in the diaspora passionate about seeing Africa grow and institutional investors. We are learning and adapting and have made some very good partnership connections and collaborations in the process.
Which African countries do you predict will perform best in 2017?
Taking into account the consequences of Brexit and an increasingy inward-looking United States still unfolding, 2017 is likely to bring with it unexpected changes in foreign diplomacy and foreign trade. Still, some African countries are set to see sustainable growth beyond the usual narrative of “Africa Rising”.
In my opinion, the countries which will be successful beyond 2017 are those that strive constantly for economic diversification. More focus on renewable energy and making Africa the central hub of manufacturing will go a long way in boosting growth and finally having the term “made in Africa” thrive.
That said, Cote d’Ivoire has several renewable energy projects underway, several in the pilot phase, maintaining its promise to become the energy hub of the region. In diversifying its economy and encouraging a growing middle class, the country has also seen its retail sector grow.
Senegal’s GDP grew by 6.5% in 2015 after several years of growth below 5%, making it the second fastest growing economy in Africa acording to the World Bank. Along with political stability, the government’s economic plan will continue to attract investors. The Plan for an Emerging Senegal launched in 2014 covers projects ranging from infrastructure and transport, energy and water and sanitation developments. The country has also launched a high-speed trian link between the new Blaise Diagne International Airport and Central Dakar, a clear sign of a country determined to forge ahead.
Morocco is home to Africa’s largest wind farm and is set to build the world’s largest solar farm, a testament of King Mohammed VI’s ambitions for his country to be a global leader in green energy. Morocco sees itself as a gateway to Europe and has recently pursued increased economic cooperation with other African nations such as Nigeria, and made a leap forward when it signed a deal towards the end of 2016 to construct a gas pipeline to Europe.