Uganda Investment Authority (UIA) has unveiled an initiative to encourage traders in Kampala’s business hub, popularly known as Kikuubo, to transition from trading in imported products to manufacturing them locally.
The “Transitioning Kikuubo Traders to Manufacturing” initiative” is hinged on the spirit of promoting import substitution, the initiative is to enable traders who have been trading in imported products for many years to seize import substitution opportunities and incentives that come with them like zero tax rates, free industrial park land and tax holidays, amongst others.
The Director General of the Uganda Investment Authority (UIA), Robert Mukiza, announced the initiative during a meeting at UIA head office with traders from Kikuubo and officials from the Global Competitiveness Initiative (GCI) and the Presidential Advisory Committee on Exports and Industrial Development (PACEID).
Mukiza said a special desk has been created under the Domestic Investment Division, full of work plans, targets, and timelines to ensure a faster transition of business people from trading to manufacturing.
He said traders, especially those in Kikuubo, have deeper knowledge of the business environment, and supply chains and have sizeable cash flow, key ingredients in the transition to local manufacturing of products the country imports.
“Domestic investors are crucial to Uganda’s industrialization that is why it is UIA’s special mission to see more traders transition to manufacture of products they have been importing,” said Mukiza.
According to Mukiza, manufacturing has greater multiplier effects than trading, citing that the former boosts local production, value addition to local raw materials, creates more jobs for especially young people, boosts personal and government incomes, and contributes to sustainable economic development.
Mukiza said Ugandans, when investing, should look at the bigger picture, by focusing on import substitution and beyond the Ugandan market and to the East African, Common Market for Eastern and Southern Africa (COMESA), the African continent, and the global market.
Mukiza said foreign investors are flocking to Uganda because it not only has the best environment for investment and business in East Africa but is also the third most profitable country after Egypt and Ethiopia.
“If you are targeting markets like the Democratic Republic of Congo or South Sudan, you don’t need to set up your factory in Greater Kampala but could go to industrial parks in Nebbi, Arua, or Kisoro,” he emphasized.
The representative of the traders, Joshua Kassibo, said for a long time they had perceived UIA as favouring foreign investors but through sustained engagements, they are now enlightened about investment opportunities and incentives they have been missing.
“We previously thought investors were only foreigners, but now we know we can transition to manufacturing, and we are ready. The main issue is how to work with UIA to enable our transition to processing and manufacturing,” said Kassibo.
The chairperson of the Global Competitiveness Initiative, Daudi Migereko, urged Ugandans to look at what to produce, process, manufacture, and export competitively.
“If you have been trading in a product for many years, it is time to start manufacturing it locally. Let us go with the new wave of import substitution,” said Migereko.
