Kampala 28 February, 2024 – The Uganda Manufacturers Association (UMA) has cautioned the Parliament of Uganda that enacting the proposed Alcoholic Drinks Control Bill, 2023 in its current form will likely crash Uganda’s economy. UMA contends that the Bill disproportionately targets the formal sector, overlooking the crucial informal sector, which constitutes nearly half (49%) of Uganda’s economy.

The proposed Alcoholic Drinks Control Bill suggests that all persons found liable of selling alcohol beyond 10:00 pm and midnight on weekdays and weekends respectively either be fined Shs20 million ‘or imprisonment for a period of 10 years or both.’

“A licensee shall not sell an alcoholic drink or native liquor before (a) 17:00 hours and after 22:00 hours on working days; (b) 12:00 hours and after 00:00 hours on public holidays and weekends,” according to clause 14 of the Bill.

While appearing before Parliament of Uganda’s joint Committee of Trade, Tourism & Industry and that of Health to present UMA’s views, Dr. Ezra Rubanda, the UMA Executive Director voiced concerns about the Bill, noting that it is likely to jeopardise businesses which will be forced to close. As an effect, he emphasized the potential acceleration of alcohol imports, despite the ability to support locally produced beverages.

During his submissions, Mr. Allan Ssenyondwa, the Director Policy, Research & Advocacy -UMA, highlighted that about 33% of funds allocated in Parliament come from the industrial sector. The alcohol industry plays a significant role in this sector, acting as a vital component in the ecosystem and contributing significantly to tourism, particularly the night economy. These include the entire value chain i.e. manufacturers, grain farmers, distributors, bars and clubs.

Important to note, the manufacturing sector’s contribution towards the national coffers has been growing, posting a tax contribution of UGX 3.5 trillion in FY 2019/22 or 20.4%. In FY 2020/2021 it grew to 4.5 trillion which was 22.68%, and 5 trillion in FY2021/2022, representing 22.62% of the total revenue collected. The top two alcohol players along with their value chains solely contribute significantly to this amount. Any negative impact on this contribution due to the passage of the bill could result in a decline in government revenue.

According to Mr. Ssenyondwa, “Illicit trade is recorded to be at a high of 62%, 25% and 45% for beer, cigarettes and Fast-Moving Goods (FMGs) respectively. This worsens the motive of formalization of the economy, instilling more pressure on our tax-to-GDP ratio while distressing the compliant taxpayers who are the easy targets for any desire to grow tax revenue.”

The challenges in enforcing compliance across the private sector, especially in agriculture and manufacturing, exacerbates the issue. Numerous backyard and garage factories operate informally, with no compelling regulations to ensure their membership in organized and recognized associations, further complicating the drive towards a more regulated economy.

On the issue of whether alcohol consumption is leading Ugandans to be unemployed, UMA argued that this may actually be the reverse in which case arguing that unemployment may be pushing Ugandans towards alcohol consumption.

See UMA’s proposals here: Download Here