No More Service Charges - Namanve Industrial Park
Manufacturers in the industrial and business park, Namanve have for a long time been subjected to payment of service charge by Uganda Investment Authority (UIA) for no services offered by the latter. Essentially UIA is obliged to provide services like street lighting, garbage collection and security which have not yet been put in place in the industrial park.
Faced with multiple licenses, this one fee was frustrating to the industrialists who incurred double costs to get services like security, garbage collection among others for their premises and still being charged by UIA which did not offer these services as required of them.
After a series of complaints from industrialists, Uganda Manufacturers Association (UMA) put the above issue to its advocacy agenda, and during the Uganda International Trade Fair (UGITF) 2017, UMA’s chairman Ms. Barbara Mulwana presented to H.E. Yoweri K. Museveni a number of issues affecting manufacturers and one of them was payment of service charge for no services offered in the industrial park, Namanve. In response, the president gave a directive to the state minister for investment to stop charging service fees for non-existent services in the Namanve industrial park.
To this background, the state Minister for investment and privatisation, Hon. Evelyn Anite has written a letter to immediately halt the collection of service charge as an implementation of the president’s directive until the required infrastructure is installed in the industrial park.
All industrialists in the Namanve industrial parks are therefore called upon to adhere to this communication and to stop paying for service charges until the necessary infrastructure has been put in place by Uganda Investment Authority (UIA) which will be a basis for the service charge collection thereafter.
Uganda negotiates the CFTA tariff liberalisation
The African Union Commission since its recent mandate from the AU heads of states decision of fast tracking of the Continental Free Trade Area (CFTA) in 2012 has held a series of meetings, workshops and seminars under its action plan for Boosting Intra Africa Trade (BIAT) by an indicative date on 2017.
Uganda under the guardianship of the ministry of Trade (MTIC) did a consultative meeting to discuss the options for tariff liberalisation modalities under the trade in goods and trade in services. It was agreed and a position for Uganda was to adopt the modified linear approach. The option initially provides for 100% tariff liberalisation over a period of 5 years, with a schedule of application on 20% in year 1, 40% in year 2, 60%, 80% and 100% in year 3, 4 and 5 respectively.
The good news however is that these trade liberalisation modalities give room for adoption of strategies that would be compatible to the particular RECs to which the partner state belongs as well as national interests. The modified linear approach with Special and Differential Treatment (SDT) in this case as adopted by Uganda seeks to provide enough room for the economy and particularly the manufacturers to prepare and be ready by the time of ratification for the CFTA. Secondly the approach encompasses the principle of variable geometry as was applied by the COMESA FTA which allows a state which may not be ready to move along to join later as but with reciprocity.
The AU Commission is convening an orientation workshop and 5th meeting of the CFTA Negotiating forum in Addis Ababa till 4th March to review the findings of the analysis of options for the negotiations modalities and other studies as well as to adopt the modalities for the CFTA Tariff liberalisation in trade in services. It is believed with the opening up of the continental market and with the right exports strategy and timing, opportunities exist for Ugandan manufacturers.
UMA fronts comments to the Anti-counterfeit bill
The Parliamentary committee on Trade and Industry that convened at parliament in February 2017, listened in to the comments from the manufacturers on the draft Anti-counterfeits bill. The Secretariat was ably represented by a contingent from the policy department of UMA who presented the comments as UMA’s consulted position with technical inputs from the Economics Sub-Committee. The key inputs such as the bill’s title itself, its scope, and provision for easy access to justice, criminal liability for corporate entities, culpability for omission or failure to act by the authorities, disposal of fines, and proposal for a tribunal were tabled.
We all note that counterfeiting is a clear syndicated activity which requires wider casting of measures to castigate the vice. If adopted the bill will solve issues to do with indifference in enforcement of laws and access to justice. The bill will also avail remedies in case of infringement on intellectual property rights, equitable sharing of the disposable funds under clause 17 of the bill which shall fundamentally propel manufacturing and innovation and establishment of a tribunal to ease access to justice in terms of time, cost and delivery of judgment. With cross referencing as already provided for therein, the bill shall also bring on board other laws for effectiveness.
COURT STOPS NEMA FROM CLOSING KAVEERA FACTORIES
The High Court in Kampala yesterday (25th Feb 2016) extended an order stopping the national Environmental Management Authority (NEMA) from closing down factories that manufacturer and recycle plastic products. The injunction issued by the Deputy Registrar, Mr. Alex Mackay Ajiji, will stay in place until March 2 when the main suit will be heard and its merits determined. “I order that the respondent which has already closed some factories and has threatened to close more should be restrained from further closure of the factories,” Mr. Alex Mackay Ajiji, High Court Deputy Registrar.
We have continued to emphasize “local content” in both large infrastructural projects as well as others so as to utilize the idle capacity present with industrialists and to create employment. To utilize idle capacity means more employment and resources used and there is a net contribution to the GDP. Today, many industries are operating below capacity and some are even laying off some workers. Those are some things that are motivating UMA to seek local content. We have had constant engagements with Government and the prospects are good. Today guidelines for preferential treatment of Ugandan manufacturers are being prepared and we are giving our input in their development. The preferential treatment sought is that a local company must have preference over a foreign company so long as it meets the EAC rules of origin then it must be given that preference. PPDA doesn’t determine where to buy from, it only gives the guidelines for procurement and the respective company has to follow those guidelines so Ministries, Companies and Agencies follow the same guidelines to award contracts. We are currently compiling a report on local capacity to put our position very clear to MDAs.
GOVT MOVES TO IMPLEMENT ONE-STOP LICENSING OF BUSINESSES
In a move to make it easy for entrepreneurs to start businesses and acquire trading licences from a single point, government has tasked Uganda Registration Services Bureau (URSB) to coordinate all licensing regulatory agencies in the country in the implementation of business licensing reforms through the e-licensing portal.
The step reflects the government’s commitment to improve the country’s performance in the global Doing Business (DB) Report and the World Economic Forum’s Global Competitiveness Index. This means that both current and potential investors may rely on the global competitiveness and DB reports as an indication of a country’s receptivity to business and such reports can influence investment decisions.
In a recent email to Daily Monitor, Mr Bemanya Twebaze Registrar General URSB said: “Government of Uganda has proposed to undertake a number of initiatives to create an enabling business environment and minimise the cost of doing business in order to attract more domestic and international investments.”
The licencing regulatory agencies are tasked with designating a focal person to work with URSB and make sure that online licensing information is up-to-date; assist URSB to respond to inquiries from users concerning their licences; participate in working group planning; and jointly plan for integrated services and future reforms.
The e-licensing portal, which can be accessed at www.businesslicenses.go.ug, and housed at URSB, is a central repository for all business licences in the country which makes it possible for potential investors anywhere around the globe to easily get information on any licence they would need to operate in any sector in Uganda.
Mr Twebaze outlined the benefits of the e-registration process including improved government transparency through one-stop access to all relevant information, and accountability and reduced opportunities for corruption through the use of online transactions.
He further said: “The process will also manage information better for regulatory agencies and will reduce time, cost and procedures to start business in the country.” The e-registry would serve as the definitive repository of information on licensing requirements and delineate legally required licences in all sectors of the economy thus increasing transparency/ease of access to licensing information and the likelihood of compliance by the private sector.
The electronic licensing portal has also registered a steady growth in numbers of people viewing the licences across the globe. These numbers have been growing since Google analytics was installed on the portal on July 1, 2014.
Currently, the number stands at 15,451 sessions from 131 economies across the globe, with Uganda leading at 10,714 followed by the USA on 637 UK at 542, among others.
Last year at the launch of the World Bank Doing Business Report, Uganda was lauded for the registered improvements which have enabled the doing business environment ranking shift from position 156 to 122.The focus of the report was on Business Licensing and Tax Reforms. Key among the areas to tackle, were the excessive regulatory burdens and the multiplicity and overlap of business licences, levies, fees and permits at national and sub-national government levels.