Gov’t Embarks on Export Promotion to Spur Growth in Manufacturing Sector

Government is focusing on promoting exportation and more of import substitution in order to support and spur growth in the Manufacturing sector.

According to the Minister of State for Trade, Industry and Cooperatives, David Bahati, government is encouraging import substitution and increase of exports.

He said the manufacturing sector is key to the development of Uganda’s economy.

Bahati revealed that the industrialization sector contributes 27.4% of the Growth Domestic Product (GDP), and manufacturing alone contributes 16.4%.

He noted that Africa alone imports over 547 US dollars, saying “we want to produce them here and who is to produce them, are the manufacturers.”

He said this can be achieved through good tax regimes, liberalization policy, reducing electricity tariffs, among others.

Bahati said after the support, government will also help look for markets of the produced goods.

The Minister made the remarks at a post budget breakfast symposium organized by the Uganda Manufacturers Association (UMA), under the theme “Positioning the Manufacturing sector to facilitate the implementation of the National Budget FY 2022/23”

Speaking at the symposium, UMA chairman, Deo Kayemba noted that Uganda has one of the smallest market share in East Africa despite being the most compliant to the EAC trade regime.

He noted that market access has remained critical for growth of the industry, however the unilateralism that exists with in the block, undermines Uganda’s export potential.

Kayemba said that there’s need to dialogue on the specific actions that need be taken to address the intermittent challenges.

He called on government to tag the tax policies to the extent possible on the NDP and fast track passing of business regulating laws.

“We have Companies who are ready to undertake heavy backward integration like in steel and cement by utilizing our Iron ore and Limestone saving the country in excess of US $1.0 Billion about 10% of the total import bill per year but because of dynamic Tax Policy regimes such heavy investment is not possible  those that attempt to do backward integration are incentivized by lack regulating laws like the “Competition law” and end up occupying the entire value chain pushing out the small ones,” he said.

Kayemba also asked for the Reduction in the Cost of Power to the President’s Target and pledge to all manufacturers of US Cents 5/KWH, adding that this remains crucial for Uganda’s competitiveness following the further integration of markets.