For the purpose of supporting and fostering growth in the manufacturing sector, the government is concentrating on boosting exports and increased import substitution.
David Bahati, the minister of state for trade, industry, and cooperatives, claims that the government is promoting more exports and import substitution.
He asserted that the manufacturing industry is essential to the growth of Uganda’s economy.
According to Bahati, manufacturing alone accounts for 16.4% of the GDP growth, while the industrialization sector provides 27.4%.
He stated, “We want to create them here and who is to produce them, are the manufacturers,” noting that Africa alone imports more than 547 US dollars.
He claimed that effective tax policies, liberalization initiatives, and lower electricity prices are only a few ways to accomplish this.
After providing support, the government, according to Bahati, will assist in locating markets for the created goods.
The Minister spoke at a post-budget breakfast symposium with the theme “Positioning the Manufacturing sector to enable the implementation of the National Budget FY 2022/23,” which was put on by the Uganda Manufacturers Association (UMA).
Speaking at the symposium, UMA Chairman Deo Kayemba remarked that despite having the highest level of compliance with the EAC trade rules, Uganda has one of the smallest market shares in East Africa.
He pointed out that while market access has remained essential for the industry’s development, Uganda’s export potential is undermined by the unilateralism that prevails inside the block.
According to Kayemba, a discussion on the precise measures that must be implemented to address the sporadic difficulties is necessary.
He urged the government to swiftly pass corporate regulation measures and to as closely as possible tie tax policies to the NDP.
We have companies that are prepared to engage in heavy backward integration, such as in the production of steel and cement using domestic iron ore and limestone. However, due to dynamic tax policy regimes, such heavy investment is not feasible. Instead, those who attempt to engage in backward integration are encouraged by a lack of regulating laws, such as the “Competition law,” and end up occupying the entire value chain.
In addition, Kayemba requested the President’s target of $5/KWH for all manufacturers, stressing that this was still necessary for Uganda to remain competitive in the wake of increased market integration.