From exile to economic powerhouse: Indians now contribute to 65% of Uganda's tax revenue despite being just 1%

Walk through the lanes of Uganda's capital, Kampala and chances are that you'll find an Indian there. From running banks to farms and owning supermarket chains and shopping malls, Ugandan Indians have regained their role and contribution in the country's economy.

It was about four decades ago that 50,000 Asians were forced to leave the country in 1972. Under the orders of former military ruler Idi Amin, they were accused of "milking Uganda's money." Back then, Indians owned 90% of the country's businesses and accounted for 90% of the tax revenues.

After being exiled, many of them spread across the globe. While some went back home, others turned to the US and the UK. In the years that followed, the country's economy slumped by around 20-25%. Soon, in 1986, President Yoweri Museveni, who recently won a fifth term in office seized power and encouraged the exiles to return.

Back to base

Currently, despite being less than 1% of the population, Indians are estimated to contribute up to 65% of Uganda's tax revenues. One of those who came back is today the country's richest man, Sudhir Ruparelia, worth an estimated $800M. He spent some time in Britain, worked a series of menial jobs and saved money to return to Uganda. "I started my business from scratch with $25,000 (£17,000) and since then we have grown into seven different sectors of the business. We employ more than 8,000 people in this country," he told the BBC. Today, he owns a company in every sector of the country, banking, insurance, hospitality, real estate, education, broadcasting and horticulture.

Ali Shah Jivraj, a 28-year-old founder and CEO of Royal Electronics, told the outlet that while his ancestors were in farming, his business is in consumer goods, manufacturing of electronics and real estate.

As per the Indian Association of Uganda, Indians contributed to 905 of the tax revenue in 1972, 30% in 1985 and 65% in 2016. Today, the Asian business ownership in the country is more diverse than it was in the 1970s.

All is well?

Racial tensions have always been linked to Asian dominance in the Ugandan economy. While they still exist, very rarely have they fallen over into violence. Everyone has welcomed the Indians back to Uganda.

As per the BBC, the natives do complain about the special incentives offered to foreigners to do business in Uganda, which they believe disadvantages the locals. There is also a real concern over labour exploitation, given that there is no official minimum wage in Uganda.

Uganda's economy is expected to grow up to 6% the next year. But youth unemployment and wealth disparity are some challenges that the Ugandan-Asian community needs to tackle with the natives.