Government urged to nurture local firms

Jan 20, 2014

The Government has been urged to nurture local companies to create a competitive and vibrant private sector.The chairman of the Uganda Investment Authority (UIA), Patrick Bitature, noted that the desire for foreign manufactured goods under the guise that they are of better quality is a myth.

By Joel Ogwang

The Government has been urged to nurture local companies to create a competitive and vibrant private sector.


The chairman, Uganda Investment Authority (UIA), Patrick Bitature, noted that the desire for foreign manufactured goods under the guise that they are of better quality is a myth.

“I had trouble building Simba Telecom because in Uganda, local businesses are not given a chance to grow. If we can support local companies to grow, they can be the answer to our domestic needs,” Bitature said.

He was speaking at the sidelines of a meeting between Malaysian and Ugandan oil suppliers on the launch of the Habib Oil partnership at Kampala Serena Hotel.

Bitature noted that with the discovery of oil in western Uganda, more opportunities abound for the local private sector.

“We are going to be producing our oil in a few years. This presents more opportunities for the private sector, but their capacity to harness the opportunities is still limited,” he said.

In a move geared at building the capacity of local suppliers and manufacturers, the Private Sector Foundation Uganda (PSFU) and the Uganda Manufacturers Association have urged the Government to enact a law granting 15% preference exclusivity for any public procurement to indigenous manufacturers.

PSFU has also asked the Government to implement the trade and industrial policies enacted in 2008 following the launch of the ‘Buy Ugandan, Build Uganda’ campaign launched in 2007 to promote locally produced commodities.

Kenya and Tanzania have a 15% preference for local suppliers over international suppliers in any public procurement.

Due to the continued preference of foreign manufactured products over local ones, Uganda is experiencing a balance of trade deficit, partly justifying the appreciating dollar value over the Uganda currency.

According to Bank of Uganda (BOU) estimates for the year ending 2012, Uganda spent $4.7b on imports and only realised $2.6b from exports.

The failure to empower local producers, PSFU asserts, is the reason Uganda has failed to optimally exploit the vast international markets under the quarter-free Everything But Arms and the African Growth Opportunities Act that were precursors for accessing Europe and US markets.

Bukenya Matovu, the energy and mineral development ministry head of communications, said the Government is prioritising local content development in the oil and gas sector to build the capacity of Ugandans.

 

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