It’s raining oil dollars in Hoima

By Haggai Matsiko

Foreign big-money investment frenzy in Tullow’s backyard

It’s Sunday, but this town’s Main Street is beehive of activity. Nothing unusual; this is Hoima, Uganda’s oil boom town.

Builders, masons, and painters can be seen everywhere hanging on wobbly wooden scaffoldings in a frenzy of construction activity.

The street looks like a multi-colouredmess of numerous construction sites with ugly corrugated iron-sheets hoarding off towering semi-finished storied buildings.

The old town, with its one-storied-lackluster clay-brick walls and rusty tin-roofs and their poor inhabitants are being purged to be replaced by foreign tycoons and “rich people from Kampala”, as people call them.

At one site, porters are mixing  cement and sandmortar while others hammer away six inch nails to tighten the wooden scaffolding they stand on to plaster and smoothen the surfaces and edges of the building that will house Hoima’s latest banking sector entrant—Crane Bank.

One of the workers is preparing to hang the Crane Bank sign on the storied building. It will be Kampala city tycoon SudhirRuparelia’s twenty second bank branch and Hoima’s ten-something.

Just two years ago, there were just four tiny banks. Today the list goes on—Stanbic, Bank of Africa, Standard Chartered, Post Bank, KCB, Crane and more.

Stylish it may be, but Crane bank building, is just another along this street. A few metreson the left, past Tropical Medical Centre, is themagnificent six-storied glass complex—KitaraCourts—that has just been completed.On the right hand side of the Crane building, just a few buildings away; another storied building is under construction, its frame hoarded away behind corrugated iron-sheets.

Across the road, the building that houses a Bata store is almost getting its fifth floor and, locals say, another is planned for the hoarded off plot across it. The plot is just half an acre and would not cost more than 100m two years ago. An area real estate dealer, Grace Baguma the director of B&K Estates Agency, says it now costs Shs 2.5 billion (Approx. US$1,000,000). Not bad.

Real estate dealers also told The Independent that an Indian businessman has just acquired two buildings at Shs 800 million—previously, they would have cost less than Shs 100 million each.

“Property prices here have increased,” says Baguma, “if you look at Main Street, it is only the rich that can afford, the poor locals are being kicked out; they won’t even be able to afford the monthly rent for shops there.”

Baguma is not just looking on. He is leaning against his recently acquired car and quickly encourages land buyers.

“Buy land here,” he says, “people are coming from Kampala and buying land all around.”  His own acquisitions include a few pieces of land and a house that now earns him about Shs 2.5 million a month.

Baguma says that thelocals who used to be landlords and tenants here, increasingly, have to find somewhere else because it is too expensive. He is quick to add that even the three storied market under construction a few metres away will also be too expensive for locals—the mega market is estimated to accommodate about 600 vendors, banks, clinics and others.

Baguma says that apart from rent, everything else food and other services in Hoima are already too expensive for the local person. Although he is a relatively successful real estate dealer, he is initially hesitant to meet this reporter at one of the hotels in Hoima saying that it is very expensive there.

The price of food ranges from Shs 6000 to Shs 15,000 a plate and locals who have been to Kampala say that most of items and services, including lodging, are more expensive in Hoima than in Uganda’s capital city.

On this street alone, it is a game of tycoons—Sudhir, Indians who have relocated here, the other two locals are one Kaija, who works in President Yoweri Museveni’s office and Godfrey Banana, a renowned real estate businessman.

The other magnets are Hajji Sewari, whose Nsamo Hotel is located just a few metres away. He also owns petrol stations and a fleet of Hoima Coaches. People here also talk about Martin Owol, the interdicted Commissioner for Disaster in the Office of Prime Minister (Owol is in court over the corruption charges that have shredded the office). His Hoima Resort Hotel is estimated to have cost billions of shillings and is heavily guarded.

A US$2 billion mini-oil refinery to be constructed just outside the town has attracted unprecedented real estate boom to this rural town in the oil rich western Uganda region.

The list of big-winners would not be complete withoutEnergy Ministry, permanent secretary, Kabagambe Kallisa, who signs off the oil contracts with the main players involved in the oil sector; Irish oil exploration firm, Tullow Oil, the French oil giant, Total, and China’s CNOOC.

Kabagambe-Kallisa is a son-of-the- soil, and his acquisition of EcoGardens Hotel shows why the investment boom in Hoima is a game of the super-rich. The idea and preliminary construction of the Hotel was by one Jackson Wabyoona who freely admits, he sold because he could not raise the required capital to complete it.

Yet by any standards Wabyona, who heads the pressure group, Bunyoro Oil and Gas Advocacy group (BLOGA), is a rich man. He owns a school, runs a few other businesses, and owns a few other properties.

But hotels are big business in Hoima with the foreign clientele demanding the highest standards in everything; meals, accommodation and leisure. Guests often include executives from Total E&P, CNOOC and Tullow Oil Uganda and a host of their service providers Ojec, Shlumberger, Harriburton and many others have camps and employees in this region. As you snake in towards Buseruka, where the oil refinery is to be built, one also comes across three vast construction sites—they are all meant for warehouses for oil companies and other service providers. Their workers will also need hotel services.

Gone are the days when Collin Hotel used to be the darling of Hoima—today it hardly gets 30 percent full—because new and more serious hotels have come up.

As you enter Hoima, there is HotelKontiki, which is arguably still a darling to many because of its traditional touch and the green all around it. With already about ten cottages, the owner of Kontiki is also still constructing.

But competition is bulging as more hotels come up. RevieraHotel is just a few kilometers away and if you turn off on your left, there is Hoima Resort Hotel.

In Kiganda zone just a few metres from town, Makerere University economist Lawrence Bategeka is also erecting a six-storied hotel, he says it will be named Glory Summit Hotel.

Protea Hospitality Group, the proprietor of 47 Hotels in 21 countries has announced that as part of its US$130 million African expansion drive, it will construct a hotel in Hoima in the third quarter of this year.

With a heavy foreigner presence and many that earn in dollars, Hoimahas just got its first Forex bureau—Red Concepts—located on Plot 12 Tooro Rd.

In two years since, 2010, numerous buildings have sprung-up and andover 10 huge storied buildings are nearing completion in the town centre.

So why is Shem Byakagaba, who heads the Kitara Heritage Development Agency (KHEDA), an organization that aims at mobilizing Banyoro to develop their region not pleased with all this buzz of investment?Although he has already tapped into the offshoots of the oil discoveries himself—he owns a few cottages and Endiro restaurant—he is certain his other fellow locals have not been as lucky.

“Yes there is an investment drive but where is its plan? How many buildings belong to the local people? What are the priorities? For instance can you hold a conference in Hoima?” he asks.

He faults the leadership for allegedly failing to protect local people’s rights and not training local entrepreneurs to survive and mobilise finance and legal services.

“Land is artificially expensive, the local person cannot afford it,” he laments.

Byakagaba’s KHEDA carried out a study to assess the problems affecting local businesses and thinks he has a solution for some of his kinsmen.   “You know what they say that a herd of sheep led by a lion can overwhelm a den of lions led by sheep,” he says, “our problem is that we are led by sheep; leaders who have no vision for their people.”

He has a stark image that keeps playing in his head about how these experienced foreign businessmen are undercutting his fellow locals.

He recalls a day he was in one of the banks in Hoima and an Indian who operates a hardware shop came in and banked about Shs 60 million. He was shocked to learn that the Indian was banking that much, and sometimes more, on a daily basis.

The hardware business is booming because of all the construction. “You see several trucks of construction materials passing every day,” Wabyona says.

In less than a year, the number of hardware shops has tripled. Joytika, one of the biggest is owned by Indians. They own the biggest pharmacies like Sona, the biggest supermarkets like New Age along Hoima Kampala road and others.

“That is the cost of development everywhere, locals do not survive the onslaught of the rich and external people who have lots of money and are looking for opportunities,” Bategeka who is also a local says, “first the locals lack financial literacy and the temptation of the money they have never seen before is too much, they end up selling to leave a certain life.”

However, some locals on the outskirts of the town are also turning their homes into lodges. In the compounds of houses that long lost their paint exposing the mud they were built with, and rusted iron sheets; one cannot miss the heaps of bricks or sand.

Some people have sold off their properties to the rich and are building brick houses while others like the self-nicknamed “omugaigawakololo” literally translated into the rich man of Kololo are erecting new houses out of compensation arising from infrastructural developments like road construction here.

Compensation, however, is very controversial here. Some locals have made up to Shs 80 million because government projects have encroached on their land. But others cannot even buy a pair of shoes after losing big plots of land and houses roofed with iron sheets. They have been paid as low as a paltry Shs 8000.

Hoima’spoor and those who are being kicked out town by the ever skyrocketing cost of livingto settle on the fringes of the boom could be a harbinger for crime.

Already BLOGAS’s Wabyona, says prostitutes are popping up everywhere, some of them local children that have dropped out of school.

Sax Pub, which operates under the same name as asex workers haven in Kampala sometime back, is doing brisk business in Hoima. In one of the clubs, The New Tunes or TNT, groupies of ladies of the night gyrate to music as local men and some Asians and Chinese ogle, offer them drinks, and routinely leave hand in hand. As late as 2am, one gets a feeling that Hoima no longer goes to sleep – at least for the guests and a few locals.