Free zones authority issues first developer licence

Jan 31, 2017

A free Zone is a designated area where goods are regarded as being outside the customs territory

Free zones authority issues first licence to developer

The Uganda Free Zones Authority (UFZA) has issued its first developer's license to a group of Ugandan investors to develop and operate the Arua Special Economic Zone (SEZ) for entrepreneurs. 

The group of investors whose identities UFZA declined to reveal will develop the infrastructure on the 12.75 hectare area for utilisation by entrepreneurs. 

The licence comes two years since UFZA was created, to boost government's efforts at creating avenues to improve the country's current account. 

UFZA officials said the $12.7m (sh45.491b) Arua free zone is expected to create at least 450 direct jobs in the first three years, with more than 2,500 indirect jobs for the people in the region. 

The officials said 45,000 square meters of productive ware house space will be created at the facility, which is expected to attract additional investments worth $30.6m (sh109.6 b) from operators who will undertake new investments. 

"The authority will participate in marketing the free zone to ensure that it produces desired results,"  UFZA executive director Richard Jabo said during the handover of the license, at his  offices in Kampala on Tuesday.

A free Zone is a designated area where goods are regarded as being outside the customs territory, as far as import duty is concerned. 

It usually takes the form of manufacturing or processing facilities, science and technology parks or even a tourism development zone. 

Jabo said UFZA aims at creating 8 private and 2 public free economic zones, with the hope of increasing export earnings by at least $100m (sh358b) per year, and creating more than 2,500 direct jobs. 

"We also intend to attract investments worth $1b (sh3.58trillion) by 2020, by offering both tax and non-tax incentives to investors interested in value addition, from various sectors of the economy, especially agro-processing. 

The parks will help us to attract more investors in the industrial sector, boost production especially for the export market, and also create more jobs needed for our economy," he said. 

In his remarks, the ARUA SEZ chief executive, Abubaker Mayanja, said the free zone will have an SME incubator for smaller businesses, to introduce them to the export value chain. 

Since Arua is a strategic area bordering DRC and central Africa Republic which are sources of high value raw materials, Mayanja said the free zone will also have space for processing high value minerals. 

"The idea is to encourage productivity and value addition in order to boost exports and reduce our trade deficit as a country, "Mayanja said. 

The free zone parks will help government in promoting export of goods and services, promote investment from local and foreign sources, and also accelerate export led industrialisation. 

The project will be anchored on warehouses to facilitate labelling, packaging and repacking, sorting, grading, cleaning and mixing of agro produce and breaking of bulk. 

According to the SEZ board chairman, Eric Adriko, the company is looking at processing timber into finished goods for export in the future, and dealing in aquaculture along the river Nile. 

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