KAMPALA, UGANDA – In the wake of the recently unveiled FY 2025/26 National Budget, a crucial insight from the Uganda Manufacturers Association (UMA) is framing the conversation for the industrial sector: “Strategic policies drive growth, not just ideology.” This perspective, shared by Deo Ssenyondwa, UMA’s Director of Policy, Research, and Advocacy, underscores the sector’s need for practical, data-driven interventions over broad, aspirational statements to unlock genuine prosperity.

As stakeholders dissect the UGX 72.1 trillion budget, which is themed around the “Full Monetisation of Uganda’s Economy,” manufacturers are analyzing its provisions through this strategic lens. The distinction is critical: an ideological goal aims for a desirable outcome, like “Buy Uganda, Build Uganda,” while a strategic policy creates a specific, measurable mechanism to achieve it, such as mandating enforceable local content quotas in public projects.

For manufacturers, who operate on thin margins and rely on predictability, targeted interventions are the true engine of growth.

Analyzing the Budget: Strategic Wins and Broad Strokes

The FY 2025/26 budget contains several measures that can be classified as the kind of targeted interventions the manufacturing sector champions:

• Targeted Tax Reforms: The budget introduces a three-year income tax holiday for new, citizen-owned startups with capital under UGX 500 million. This is a direct intervention aimed at nurturing nascent businesses, though UMA has advocated for a five-year period, arguing it more realistically reflects the time taken to achieve profitability.
• Specific Export Levies: An export levy of $10 per metric ton has been introduced on wheat bran, cotton cake, and maize bran. This is a strategic policy designed to ensure the availability of affordable raw materials for the local animal feed industry, thereby supporting the entire agro-processing value chain.
• Reduced Compliance Burden: The penalty for non-issuance of an EFRIS receipt has been revised from a prohibitive flat UGX 6 million to twice the value of the tax owed. This change acknowledges a specific operational challenge and makes compliance less punitive for businesses.

However, the sector remains cautious about broad allocations without clear, accessible mechanisms. While significant funds are directed towards programs like the Parish Development Model (PDM) and general wealth creation, manufacturers stress the need for these to translate into increased aggregate demand for locally made goods. Similarly, large allocations to “industrialization” must be channeled through transparent and efficient conduits, like the Uganda Development Bank (UDB), with specific credit lines tailored to the unique needs of different manufacturing sub-sectors.

The Call for More Targeted Interventions

Building on the budget’s foundation, UMA continues to advocate for more strategic policies that address core bottlenecks. The conversation among manufacturers highlights the need for:

• Tiered Energy Tariffs: Moving beyond just increasing overall power generation to implementing a tiered tariff system that provides lower, more competitive electricity rates for large-scale industrial consumers, directly reducing production costs.
• Affordable Capital for Equipment: Instead of general financing, creating specific credit facilities targeted at capital expenditure for new machinery and technology upgrades, which are essential for boosting efficiency and innovation.
• Enforceable Local Content: Strengthening the BUBU policy with clear, enforced quotas for local sourcing in government-funded infrastructure and other projects, guaranteeing a market for local producers.

As Uganda charts its economic future, the insight shared by UMA’s policy director serves as a vital reminder for policymakers. The success of the FY 2025/26 budget in fostering industrial growth will not be measured by its ideological ambitions, but by its portfolio of strategic, targeted interventions that solve real-world problems for the businesses tasked with creating jobs, adding value, and driving the economy forward. The ongoing dialogue between industry and government, through platforms like the #Budget2Business series, remains essential to identify and refine these critical policies.