Uganda’s industrial manufacturing sector is relatively small. The sector is dominated by subsidiaries of multinational corporations
Industrialists have urged government to increase the budget allocations to the sector to finance the fabrication of equipment as well as research and design activity.
Industrial development is a key pillar in the Vision 2040 master plan.
The seven agencies under the ministry of trade, industry and cooperatives were allocated sh76b in the current financial year.
This amount is set to increase to sh149b next financial year 2016/17; however, Prof. Charles Kwesiga, the Executive Director of Uganda Industrial Research Institute (UIRI) says this amount is still insufficient.
Speaking during a tour of UIRI headquarters and incubation center in Nakawa by the armed forces, Prof. Kwesiga said that only a fraction of the funds allocated to the trade ministry actually trickle down to UIRI.
He added that chronic underfunding of the sector hampers their ability to carry out research and design, and incubation of industrial start-up’s to catalyse the socio-economic transformation of Uganda.
“It seems the people in the budgetary process do not understand how industrialization is achieved, and yet, they keep insisting that we should industrialize. How can you achieve that with meagre funds?” he asked rhetorically.
“We have made efforts to develop a vibrant cottage industry but we need funds to expand around the country. Parliamentarians seem to think this is not important to they deny us funds,
“As a country we are limited by lack of internationally complaint standards for most of our products. This limits the market for our products and government must expedite the standards process,” he added.
Uganda’s industrial manufacturing sector is relatively small. The sector is dominated by subsidiaries of multinational corporations.
The presence of subsidiaries of multi-national corporations is largely attributed to the Government of Uganda’s privatization programme which commenced in the mid 1990’s.
According a report by PricewaterHouseCoopers (Pwc), the industrial sector is faced with intermittent power supply, increased cost of electricity required for production, strong competition from imported products and relatively high poverty levels.
Despite these challenges, the industrial sector registered the second highest growth by sector in the 2014/15 financial year at 5.5% according to 2015/16 budget speech read by Matia Kasaija, the finance minister.