Twelve Uganda-based firms in LSE’s ‘Companies to Inspire Africa’ report

A report by the London Stock Exchange Group on Africa’s most “inspirational and dynamic” small and medium-sized enterprises names 12 Ugandan companies among the 343 nominated companies.

The companies were nominated by PricewaterhouseCoopers, CDC Group, African Development Bank Group, which partnered with LSEG to produce the report. Other development finance institutions, venture capitalists, private equity firms and impact investors also nominated firms.

Of the twelve firms primarily operating in Uganda that made the list, only one – DFCU – is listed on the Uganda Securities Exchange. Four – Biyinzika Poultry International Ltd, Geossy Ltd, Sunshine Agro Products, and Vital-Tomosi’s Dairy -are in the agriculture sector.

Kiboko Holdings Ltd, which the report notes started operating in Uganda in 2002, has since expanded to Kenya, Tanzania, Rwanda, Burundi and South Sudan.

Kiboko started as a roofings sheets distributor but is now the leading distributor of pharmaceuticals and fast-moving consumer goods in Uganda through its Abacus Pharma division and Kiboko Enterprises arms. Another division, Kiboko Financial Services, offers insurance brokerage.

Two of the Ugandan enterprises, SafeBoda in the technology and telecoms sector, and Tugende, a financial services firm, work with boda boda cyclists.

SafeBoda is a startup company that operates a Uber-like “commercially viable network of safe” boda boda cyclists. Tugende leases motorcycles to recommended drivers, who then have 19 months to make weekly payments and own the bike.

The other Ugandan firms on the list are Absolute Energy, a renewable energy firm, Solar Now, and Fenix International Inc, both of which offer solar energy solutions. Kyogo Mazinga, a stone cutter that supplies stone veneering for indoor and outdoor use in construction, rounds up the Ugandan firms.

“The companies we list and profile boast an impressive average compound annual growth rate of 16%,” Xavier Rolet, the chief executive of the London Stock Exchange Group says in the report’s foreword.

To be included in the report, the companies must have “demonstrated growth over the past three years.” Growth was evaluated by looking at revenues, number of employees, operational output, and geographical expansion.

Annual revenues of a company or its consolidated group should also not exceed $1 billion.

In addition, all the companies had to have audited financials to be included. The accounts must have been audited and accredited by one of the ‘Big Four’ firms – Deloitte, PwC, Ernst & Young, and KPMG – or a local affiliate.

The report aims to “educate and introduce investors to the opportunities that these companies and countries may offer.”

Mr Rolet says many of the companies in the report are “instinctively attracted to equity finance,” which has proven to be better at helping dynamic startups and high-growth companies to expand than traditional sources of debt finance.

“Debt is a short-term fix that does not encourage long-term growth,” he says. “It may be a suitable funding tool for established blue-chip multinationals, but is not designed to help innovative companies that need capital to grow and invest.”

Small companies with bank loans spend a lot of time and effort managing the debt, rather than focussing their resources on investing, innovating, and growing, Mr Rolet says.

The report was produced in partnership with the African Development Bank Group, CDC Group and PwC, and sponsored by FTI Consulting, Citigroup and Diamond Bank.

The 12 Uganda firms and their nominators

Company Sector Nominating Firm
Absolute Energy Renewable Energy Shell Foundation
Biyinzika Poultry International Ltd Agriculture 8 Miles LLP
DFCU Financial Services Actis/CDC Group
Fenix International inc Renewable Energy AECF
Geossy Ltd Agriculture Iungo Capital
Kiboko Holdings Ltd Consumer Services AfricInvest
Kyogo Mazinga Industry Iungo Capital
SafeBoda Techonology & Telecoms Shell Foundation
Solar Now Renewable Energy USAID/CDC Group/AECF
Sunshine Agro Products Agriculture AECF
Tugende Financial Services Shell Foundation
Vital-Tomosi’s Dairy Agriculture Vital Capital Fund