Investors urge govt to support agro processing

A cross section of investors have urged government to support  the agro processing value chain , in order to increase exports, which are needed to correct the country's current account.

The current account tracks a country's trade with the rest of the world in goods, exports, imports, services, income and transfers.

The investors also want government to focus on vocational training to build a skilled manpower pool which is needed to boost production levels for the industrial sector.

According to businessman, Sudir Ruparelia, efforts should mainly be focused on agro processing, where the country has a comparative advantage and majority of the people earning a living

The industrial sector here is agro-based, accounting for at least 40 % of total manufacturing, and that is why we want government to focus on its development, "he said.

Agriculture contributes approximately 22.5% to the national gross domestic product (GDP), and provides employment to more than 80% of the population, according to records from the National Bureau of Statistics.

He said agro processing will inevitably accelerate the diversification of Uganda's economic base and provide new sources of employment for the country's rapidly growing population and increasingly urban labor force.

"Uganda's population is currently 37m and it is growing at a rate of 3% per annum. This makes our population one of the fastest growing in the world, yet we don't have enough jobs for our people. The only way is industrialisation and skills development to create the jobs," Sudir said.

This was on the sidelines of the launch of a new multi-purpose disinfectant solution, Germilon, by the Kwality Afro Asia limited at Kololo on Friday.

He said by accelerating the transformation to an industrial economy, jobs in the manufacturing and services sectors could reach 8 to 12 million by 2030. 

"However, the bulk of the workforce will likely remain employed in the agricultural sector, mainly because it is performing the role of residual employer. Therefore, all efforts must be integrated with agro production and processing," he said.

Statistics indicate that exports of goods and services have stagnated for the last two fiscal years, as we appear to have reached the limits of supply capacity in many of our main export industries.

According to the deputy governor, Louise Kasekende, trade deficit in goods and services has almost tripled since 2005/06, from $1 billion (sh 3,5trillion) in that year to nearly $3 billion (sh10, 69trillion) in 2014/15.

"Our economy is heavily dependent on imports and import demand has continued to expand, widening the balance of payments. Therefore, if we are to achieve sustainable growth and development and structural transformation in Uganda, we must strengthen our external performance," said the deputy governor, Louise Kasekende recently.

According to the Kwality Afro Asia limited managing director, Akshay Aggarwal, government should focus more on vocational training to curb the rampant unemployment levels, especially among the youth.

"Ugandans are very educated people but unfortunately, many do not have enough skills needed by employers at the workplace. It is therefore important to build relevant expertise, instead of blaming foreigners of taking over available jobs in the country," he said.

The latest statistics from UBoS indicate that the country's youth unemployment currently stands at 22.3%, with their numbers constituting 77% of the population.