Uganda, EAC countries lose markets to Chinese, Indian businesses

The East African Community (EAC) Industrial Competitiveness Report 2017 launched in Dar es Salaam on Tuesday shows that EAC Partner States are losing their shares in the lucrative regional market to developed countries through imports of what could have been produced locally.

EAC members are Uganda, Kenya, Tanzania, Burundi, Rwanda and South Sudan.

Owora Richard Othieno head, of corporate communications and public affairs department at the EAC secretariat in Arusha, Tanzania said: "China and India take the lead in this area".

According to the report, manufacturing sector growth had slowed down in recent years from 5.3% between 2005 and 2010 to 4.6% between 2010 and 2015.

Othieno said the performance falls short of 10 to 15% annual growth rate mentioned in the EAC Industrialisation Policy and Strategy.

Uganda has dropped seven places to 122 in the rankings out of 190 economies this year 2017, compared to 115 out of 190 economies in the previous year 2016 according to a World Bank report ‘Doing Business report 2018: Reforming to Create Jobs'.

Government with the support of the United Nations Development Programme (UNDP) is designing a new national industrial policy for Uganda following the expiry of the existing policy.

Uganda's 10 year National Industrial Policy (NIP) was put in place in February 2008 and comes to a close in February 2018.

A review was commissioned in March 2017 by trade ministry under the auspices of the United National Industrial Development Organisation (UNIDO).

The review report entitled ‘Independent review of the national industrial policy 2008' states that overall that the policy faced difficulties in its implementation. "In the wake of other competing government priorities its core activities remained on a waiting list. The policy was not well funded"

Amelia Kyambadde, the trade minister said the policy and the five-year National Industrial Sector Strategic Plan put in place have come to a close.

The minister said manufacturing is minimal in Uganda and the region. 'Industrialisation in Uganda faces challenges such as inadequate physical infrastructure, high cost of finance, costly energy, low levels of skills, technology and innovation capabilities," Kyambadde said.

She asked for more incentives for domestic industries for their growth.  She called for a move away from dependence on foreign direct investment, because it has not transformed Uganda.

According to the trade ministry, Uganda has 3,200 factories concentrating on foods and beverages, leather and footwear, textiles and clothing and metal works. These factories are micro, small and medium scale.

Matia Kasaija, the finance minister said Uganda has become a supermarket of the world.

"Now we want as many things to be manufactured in Uganda. We are building industrial parks, economic free trade zones to support manufacturing," he said.

"In Uganda we have many excellent policy developers but implementation is a big problem," Kasaija added.

Oliver Lalani, executive director Roofings Group recently said there was a stigma of products made in Uganda. "People in Uganda think products made in Uganda are not of good quality. We need to address it through the media, educational institutions. Export promotion has to be done," Lalani said.