VAT on computers is crippling us – Uganda Reseller

Mr. Semu Nsibirwa, managing Director, one of the long surviving IT gurus in Kampala, Uganda, talks about the his IT reseller business – Mobile Computers Ltd, and its struggle against several challenges.mobilecomputersLogoBriefly tell us about you company Mobile Computers – what it does, the volume of business it handles, the total number of staff and board, how long it has been in existence etc…
Mobile Computers was established in 1998 in Agra, India. It specialized in training, hardware, software, internet installation. It worked in partnership with Jai-Jawala Computer Centre for two years. While in India, it trained mostly the Ugandan community in the use of internet and other related services.
Mission: By eliminating middle men, retailers and other costly intermediary steps and using the industry’s most efficient purchasing, manufacturing and distribution process, Mobile Computers is able to offer more powerful and richly configured systems for less money than our competitors.
Vision: Our vision is to become the largest recognized leader of quality computer equipment and services to the whole of Uganda; reaching every area of Uganda with the necessary computer equipment to improve technology across all spheres of the economy. To be able to open branches in all major towns in the country and provide the same quality of Computer Equipment and services we have been providing on a daily basis.

How has business been in the last 12 months?
Ever since the VAT taxes were introduced the prices of products hit the roof, a low cost PC that cost UGX1,000,000 now cost UGX1,450,000 in the local market thus pushing away the buyers, then with the increasing in the dollar rate to the local currency is also a disadvantage, it further pushed prices higher.

What was the most challenging issue about your business in the past year and how did the company overcome it?
Again the challenging part is VAT & high dollar exchange rates. We have tag along with the slow growth of the economy

Where do you source majority of the IT products you resell in Uganda?
UAE, China, United Kingdom and the others are Australia, Austria, Germany, Malaysia, Singapore, Ukraine, US and India.

What are some of the challenges you are facing when you are sourcing products from hardware and software vendors?
They demand payment upfront. Credit terms limited.

What vendor brands do you have in your product portfolio?
Dell, HP, Lenovo, Dlink, Epro

Do you have any vendor certifications from the brands you represent?

What will drive your business growth in 2015? Are you expecting better business this year than last year? If yes why?
YES, it’s the year before the election in our country, we expect investment in IT for the election.

What do you view as biggest inhibitor of growth for most IT reselling companies in Uganda?
At the moment its hard to tell, stores are closing because they have been affected by the VAT taxes & dollar increase. How does this affect us, we pay our suppliers in US dollars so at the end of the day the profit margin remains small.

How long has your company been in business and what do you say is the secret to your staying business?
Mobile Computers was registered in Uganda in the year 2000 and started its operations in the Ugandan market in 2001. We market and maintain all computers and their accessories, networking computers and PABX installations and Court recording equipment and ICT security monitoring web sites. From 2001 to date Mobile Computers is proud to have competed in the Ugandan market in this industry and are optimistic of the future. The company takes pride in its ability to provide customers with turnkey solutions – from concept and design to installation and maintenance – with deep experience in surveying, construction site prep, installation, training and interfacing with third party systems. Secret is to keep our focus, give the clients gained over the years the best services. We give each day our very best.

In your view, what needs to change if IT is to be part of every organisation, business and individual in Uganda?
First and foremost the govt has got to give some support to the local suppliers which doesn’t happened, If a local supplier bids with a foreign company is put on the same footing with the local, charged same fees, and this isn’t fair at all. This at the end day affects local suppliers, that’s explains why local suppliers hardly take part in tenders, if they do, they will have a relation in the organization or govt body that will help them get the tender.

What does the future hold for IT resellers in Uganda?
Future is bright, one has to adopt the methods that the Asians are using, NO CREDIT SALES, that way you can make sales. Its again with one keeping the focus.