Designing success in Africa - Interview with

Geoffrey Rugazoora CEO at MOGAS

GROUP
Geoffrey Rugazoora, MOGAS Group Chief Executive Officer, has 24 years of experience in
the petroleum downstream segment ranging from sales and marketing, trading and
operations, strategy and business development, and projects management. Geoffrey has also
served on Corporate and Public Boards in East Africa but has deferred such responsibilities to
focus on his core responsibility of enhancing the growth of MOGAS business in East and
Central Africa. Under his leadership, MOGAS GROUP has grown rapidly and diversified
both markets and products to become a dynamic regional downstream oil company. Geoffrey
also sits on the committee for Uganda Fuel Supply Coordination under the Ministry of
Energy & Mineral Development.
MOGAS Oil has built a competitive brand in a tough market with many large
international actors. What has been the key to your success?
The key to our success is embedded in our commitment to employing global standards to
deliver local solutions. This means that first and foremost we have a good understanding of
the local business environment in Uganda and in other countries where we operate. We apply
sound judgment in all our investment decisions and align our business models to the
operating business environments in our chosen markets. We also understand the importance
of forging business partnerships with good partners like Design without Borders and other
world-class business partners. Last but not least, we endeavour to attract, retain, empower,
and motivate skilled staff. At MOGAS we believe that a business is as good as its people.
Therefore internal learning and growth is one of our stated human resource goals.
How can other businesses in Uganda and in Africa copy your success? What do you see
as the major obstacles for this to happen?
Marketable products and services; clear and market relevant business strategies; adequate
resources; professional management teams; good systems, processes, and procedures; and
good corporate governance are the essential elements to which MOGAS attributes its success.
We believe other businesses in Uganda and other African countries would also do well if they
employed these basic business elements. The main handicap of many local businesses is lack
of access to financial capital, and even when they access it, it comes very expensively.
Corruption tends to become a way of survival for poorly structured businesses that also lack
efficient systems and operating capital. Many local businesses in Africa dont focus on doing
what they are good at; either they tend to take on too much, or they dont have the capabilities
to follow through their plans. At MOGAS we are focused and consistently do what we are
good at and we strive to do it better than our competitors can. By diversifying our products
and markets, we spread our risks and exploit our intercompany synergies where they exist.
We develop unique competences in particular markets and business segments, which we
transfer and adapt to similar markets and business segments in which we operate. Also,
MOGAS operating companies dont have to do everything by themselves, so we always
outsource non-core services. Local businesses can therefore benefit through smart

partnerships and by employing the right people for their businesses. It is not unusual for local
businesses to be run by unprofessional staff. Its our wish and hope that other local
entrepreneurs will follow our example, because it does not cost more to be world-class. If
they want to succeed they must professionalise their business operations. Our business model
is very simple; I dont see that it should be difficult to copy.
Africa is looked upon as one of the most promising financial investment environments in
the world at the moment. What advantages do local companies like MOGAS have over
international companies operating in Uganda?
International companies often come with stereotypical views about African markets; they
think that what works well in one African country or another developing economy
automatically works well in another African country. This is often the case. Foreign
companies come with many advantages in terms of reputable brands, robust business
systems, superior skills, better bargaining power, and strong financial resources, but if they
lack a good understanding of the local environment, they become handicapped by operational
inefficiencies. Of course, some international companies operate just as well or even better
than good local companies, but many dont.
What role can businesses like MOGAS play in creating development in Africa?
I believe long-term development in Africa must happen through more trade rather than
traditional aid. Traditional foreign aid can provide short-term relief to a country, but the longterm solutions should be through changes within the country itself. Aid comes with
conditions and is not as valued and appreciated as hard earned revenues generated within the
country itself, or repayable loans. Aid is vulnerable to misappropriation and may not be
directed to where it is most required by the recipient. Aid availability is also dependent on the
prevailing economic conditions in the donor country, hence making it unreliable. I therefore
believe that favourable trading terms between developed countries and Africa, loan and
grants, and foreign direct investments in Africa are what will accelerate Africas economic
development. Western partners should trade more with African countries and African
countries should trade more within Africa. Its important to remember that not many
economies in the world have been developed by foreigners. I think external partners should
complement what is already being done well locally. Foreign partners should bring with them
skills and capital that are not readily available locally, while local partners bring local
knowledge and expertise.
At MOGAS we help develop intra Africa trade by investing and trading within Africa and
developing viable local businesses in several African countries. Also, MOGAS is among the
top hundred taxpayers in Uganda. We appreciate that paying tax is our corporate
responsibility. We employ all together about 400 people across the region. Every person has
in general an extended family of about ten people, which means that 4,000 people or more
benefit from the MOGAS employment. Indirectly, many more people benefit from our
business. For example, we contract local construction companies to build MOGAS fuel
terminals and stations, appoint local distributors to sell our products, and contract local
transporters for local and regional deliveries. We also run a unique business incubator
programme where we give young skilled employees with entrepreneurial skills the
opportunity to run MOGAS petrol stations. We start by offering them unsecured, interest-free
loans to run the stations. For two to three years they run the stations under our close
supervision until they pay off their loans and run the businesses on their own money. This has

been very successful, and many of our outlets are today run by our former employees.
Because they are well trained and capitalised, MOGAS boasts of loyal and efficient operators
of its petrol stations. We also invest in at least 20 fresh graduates every year that we recruit as
management trainees. The majority of them are retained by MOGAS after finishing their
internship.
What do you see as the most important challenges for economic development in
Uganda?
This is a big question, but generally speaking the authorities should revisit our educational
system. At MOGAS we believe appropriate education is the means of developing resourceful
people for the country. African countries, Uganda inclusive, should develop appropriate
education systems relevant to their needs and also allocate more money towards government
funded research. The other major challenge Uganda is facing is the infrastructure. Uganda is
a landlocked country with an inefficient railway system, and as a result there is high
dependency on road transport which makes our products expensive compared to those who
are not as disadvantaged as Uganda in terms of access to the sea. Uganda already has an
attractive investment climate. This can and should be made more attractive by the
government. For example, most investment is concentrated in Kampala. Incentives can be
given to spread out investment to areas which are not as attractive to investors. We should
also selectively open up for more immigration because we currently dont have adequate
skills needed to do world-class business. At the moment immigration is difficult even for
Africans. One big reason why development in Africa is slow is poor political governance.
Corruption is not genetic; its a result of political mismanagement. Our governments should
make sure that their public servants are accountable.
What has been the impact of the collaboration with Design without Borders?
We were working on making new oilcans when we went into a partnership with Design
without Borders. Through the collaboration, the design process speeded up and the outcome
was probably better than we could have realised with our own means. Usually Ugandan
companies copy existing products, but with design expertise we were able to tailor-make the
cans to meet our customers needs. Together with Design without Borders we conducted a
survey to find out what the customers thought about the existing lubricant packs in the
market. Design without Borders went through the design process and made sure the new
oilcan met the expectations of our customers. Working with Design without Borders was
MOGAS first experience working with designers. We were not familiar with the design
process and the number of skills that goes into designing an industrial part. Industrial design
becomes important because it helps to tailor a product to its customers needs and enables
product differentiation. Today we follow the same design procedure when making new
products. The impact from the project is therefore still evident in the company.
How can design contribute to development in Africa?
First and foremost the presentation of African products can and should be improved through
industrial design. Africa has a range of unique products, but because their presentation and
packaging is not attractive to the customers, they are not broadly popular and do not fetch
premium prices in the marketplace be this local or foreign. African businesses can
differentiate themselves by using design. The product approach in most African countries is
more about functionality with little regard for the aesthetic appeal of the product; if the

content is good, the product is considered market-ready. With increasing competition both
from national and international companies, Africa needs to start differentiating its products to
stay on the shelf. Also, design is a skill, which if developed, can be another source of
occupation and employment in Africa.