Players in the Private Sector and Government have committed to join hands in the fight against illicit trade in Uganda.
Stephen Asiimwe, the Chief Executive Officer of Private Sector Foundation Uganda (PSFU), noted that illicit trade has led to losses to both government and the private sector.
In Uganda, illicit trade is mainly common in alcohol, water, cigarettes, steel products, detergent products, ballpoint pens, electrical appliances, cosmetics, pharmaceuticals, agrochemicals, and computer software and hardware spare parts.
The Uganda Revenue Authority (URA) reported a loss of over Ugx 91 billion shillings in 2022, according to the latest industry surveys, illicit trade constitutes 29.4% of the tobacco market and 64.7% of the alcohol market resulting in a loss of over Ugx. 30 billion and Ugx. 1.6 trillion respectively in tax revenue annually from tax evaded products, the PSFU has revealed.
An estimated 30% of seeds and over 40% counterfeit crop protection products and fertilizers in Uganda are counterfeits.
Asiimwe says this can lead to economic ruin for farmers, health issues to the operator and damage to the environment.
He further revealed that illicit trade costs the country’s future in terms of job creation because genuine manufacturers fail to expand.
“It chokes off market growth, sabotages global supply chains, squanders natural resources and endangers market security,” he said.
He called for more combined efforts between government and the private sector to fight the trade.
Asiimwe made the remarks at a dialogue on Illicit Trade organized by the Private Sector Foundation Uganda (PSFU) in conjunction with players in the industries most affected by the illegal business.
Other organizers of the meeting included; Uganda Breweries, BAT, Unilever, Movit Limited, and Uganda Alcohol Industry Association.
The Minister of State for Industry, David Bahati, expressed his frustration over the lack of action taken amid the burgeoning number of illicit goods on the Ugandan market.
Speaking at the event in Kampala, Juliana Kagwa, the Corporate Relations Director Uganda Breweries Ltd, said as the Uganda Alcohol Industry Association (UAIA), they are deeply concerned about the rapid proliferation of illicit brands in the market.
She says illicit alcohol has been growing at an annual rate of 9% over the past 5 years and currently accounts for over 65% of all alcohol on the market.
She warned of far reaching effects that illicit goods, especially alcohol pose to the country.
“Illicit trade is most dangerous in the alcohol sector. The misconception is that when you are drinking alcohol and you pay less than a legitimate product, people think they are drinking a watered down version of the legitimate product. But it’s not. The two are nowhere near each other.”
“When you hear that a product is being distilled to methylated spirit, that’s paraffin. If you are lucky, you are drinking watered down paraffin. You might not die, but you might go blind” she said.