The return of the diasporans

By Alan Ssempebwa

Jakana made the tough choice between sending money home and returning to invest

Down a cul-de-sac in Kawempe about 8kms from Kampala’s central business district is the home, factory and office of Dan Jakana, CEO of Jakana Foods. The road is fittingly called Jakana Place Drive. Jakana works at a neatly arranged wood table in his office nestled between bookshelf packed with books on business management, agricultural business manuals and business strategy and behind him, to the right, are two flags; one for the USA and another for Uganda. Jakana is a returnee; the technical name for people who emigrate, leave somewhere else for some time, and return. In Jakana’s case, it was the U.S.

I’m the Juice man,” Jakana, 57, says proudly, “I capitalize on one of the many things Uganda has in abundance, fruit.”

Then he launches into how he dreamt up his fruit business while studying Business Administration at the University of Texas at El Paso and working in the U.S.

Jakana built his business from scratch starting in 1994. He would visit Uganda regularly to see what the market was determining. Regular trips to villages and the market place allowed him to know whether his product was marketable or not.

He started Jakana Juice in his mother’s kitchen. When he contemplated building a factory elsewhere as the operation got too big, his mum offered him the space for the factory.  The Jakana Foods Company complex has since eaten up the large grounds that Jakana played on as a kid. It includes the house he grew up in, the factory plant that also houses his office, and quarters for his workers.

He is a methodical man and recommends this approach to anyone in the diaspora who is considering trying to start anything in Uganda. “Do your homework before,” he says, “Get involved in value addition.”

More are returning

The advice is timely as anecdotal evidence shows that although the exodus remains, more people are returning from the diaspora either temporarily or, like Jakana, permanently.

The perception that there are more opportunities for work in the developed world has changed since the financial crash in 2008. Many countries in Europe and the United States have been experiencing economic woes. Unemployment has been particularly difficult to curb, and growth particularly difficult to generate.

A 2010 Migration Household Survey by the World Bank and Makerere University shows a consistent rise in number of returnees mainly from Sudan, Kenya, UK, USA, South Africa and Iraq. The data shows that most of the returnees (53.8%) left Uganda to either take up a job or search for one but are now returning in droves because either they had no intention of staying (19.2%) or the temporary work they got ended (11.5%).

The highest numbers of returnees were in 2009, unsurprisingly when the global financial crisis was at its peak. The return rate eased off in 2010 but remained high compared to earlier years.

The increasing number of returnees is both an opportunity and a threat to the economy.   Among the major political issues in the western world is how to monitor borders and keep unwanted aliens out. In Africa, the problem has for a long time been how to keep people like Jakana from leaving or to get them to return once they have left.

However, as the trend of Ugandans from the diaspora returning to live and invest here grows, experts are reflecting on the challenges this poses.

Senior Investment Executive at Uganda Investment Authority (UIA) Sheila Mugyenzi told the Independent some of the benefits of diasporans coming back; “For the country – transfer of knowledge and technology, employment creation, widening of the tax base causing economic development, creation of business linkages between Uganda and the hosting Diaspora countries. For them – opportunity to develop home and family back home sustainably.”

Mugyenzi adds: “Ugandans in the Diaspora have enormously supported the transfer of technology, knowledge and expertise to both public institutions and private sector enterprises in the economy thereby helping in the technological transformation process.”

Kyeyo money

None the less, Uganda has benefitted greatly from emigration primarily because of remittance money colloquially referred to as kyeyo cash. As in other African countries, remittance money has brought some prosperity to Uganda, in some years even exceeding Foreign Direct Investment (FDI), export earnings, and foreign aid.

Jakana says, “The diaspora needs to keep on sending money because it’s highly effective. But they need to be efficient with the way it is spent here.”

Christine Alupo, Assistant Director of Communications, Bank of Uganda told the Independent “The most recent results available put the remittance receipts to Uganda for the calendar year 2011 at US$813 million, a 5.8% increase from the 2010 estimate of US$768 million (BoU figures).

However, there are indications of a decline in remittances in 2012 with major contributor to the low remittance receipts being the Eurozone crisis, a situation which has seen these economies – where most of Ugandans are based – experience economic stagnation and a resultant liquidity squeeze.”

Returning to Uganda is becoming more attractive because of the optimism around the discovery of oil and the sustained 25-year long high levels of growth of the economy. Many returnees see the opportunity to capitalise on an education system that produces around 400,000 graduates a year but only 80,000 jobs created. More Ugandans, here and abroad, are seeing opportunities in using the resources available in the same way Jakana is exploiting fruit.

Jakana offers advice to returnees trying to invest in Uganda.

He says if Uganda is to industrialise then it needs to stop exporting raw materials without adding value.

“If the British want sliced pineapples, slice them here and package it here,” he says, “The countries we export to give us back our products having processed and packaged them so we make a huge loss.”

Eye on the prize

At 57 Jakana is greatly accomplished but has no intension of slowing down. He has two young children that keep him on his feet as well as a son in university abroad. He is also in the process of building some luxury apartments called Jakana Heights by Lake Victoria. He wants to be done by 2015 and is in the process of finding tenants.

The time that he has spent in America has been invaluable in shaping his ambition and success. “I have benefitted greatly from the exposure to different environments and particularly my time at University. I have seen the possibilities that my product can achieve. A product like this, which is organic and well packaged, is considered top quality and can be sold at a premium abroad. I have worked in food processing and got to see various elements of the trade that I would later use for my own business”

Having lived in Houston, Texas Jakana tells me that he is a huge fan of NASA and in another life would have liked to be an astronaut. However he has managed to live his dream through his products, because in 2011 a Jakana drink was flown into space as part of a programme NASA was offering to all business abroad. As result Jakana was invited to the American embassy to pick up his certificate and have dinner with the ambassador.

Jakana Foods employs 32 workers at the factory and supports an additional 550 out growers who provide Jakana with the fresh fruit. This makes a massive difference to the families that rely on agriculture and to potential out growers.