The Uganda Manufacturers Association (UMA) held its first ever Post Budget Breakfast Symposium themed, ‘Positioning the Manufacturing Sector to Facilitate the Objectives of the National Budget FY2022/22.’ The event saw high profile members of the sector in attendance among whom was Hon. David Bahati, Minister of State for Trade, Industry and Cooperatives.

Hon. Bahati emphasized that 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, government is encouraging import substitution and increase of exports, pointing that the manufacturing sector is key to the development of Uganda’s economy.

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

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

The minister added that 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.

Also 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 the market access has remained critical for growth of the industry, however, the unilateralism that exists within the block, undermines Uganda’s export potential.

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

The Chairman then called on government to tag the tax policies to the extent possible on the NDP and fast track passing of business regulating law.

“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 $1bn, about 10% of the total import bill per year. However, because of dynamic Tax Policy regimes, such heavy investment is not possible. Those that attempt to do backward integration are incentivized by lack of 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 cent 5/KWH, adding that this remains crucial for Uganda’s competitiveness following the further integration of markets.