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Support Uganda's industrialisation process

By Admin

Added 28th August 2018 03:01 PM

As peace returns to South Sudan, Uganda’s exports will further grow, presenting a big opportunity.

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As peace returns to South Sudan, Uganda’s exports will further grow, presenting a big opportunity.

Dicksons C. Kateshumbwa

KAMPALA - Over the past years, several industries have been established across Uganda.

This trend will ultimately reduce our reliance on imported products to local substitutes.

Already, items such as steel, cooking oil and others are made locally. This has created employment and income from exports, which grow annually.   

There has been a surge in exports of agricultural produce over the past couple of years. In the 2017/18 financial year, Uganda’s exports to the East African Community (EAC) grew by about 32%. From these, Uganda earned sh4.1 trillion compared to imports from EAC, which grew by about 8% amounting to sh2.2 trillion.

These statistics are a blow to skeptics, who have questioned the continued regional integration effort. As peace returns to South Sudan, Uganda’s exports will further grow, presenting a big opportunity. 

Therefore, we must consolidate and support effort to promote industrialisation because it is the easier route to provide mass employment. Further, industries present an opportunity of skills transfer.

To facilitate industrialisation, the Government has introduced numerous tax policy incentives such as the Build Uganda Buy Uganda policy. However, for all these efforts to succeed, we must be patriotic and avoid undermining locally made items. 

Locally manufactured products will get better with increased demand and competition.

For instance, we have a new manufacturer of high quality tiles in Kapeeka producing about 30,000 square meters of tiles per day. All these are produced using locally sourced raw materials.

As industries like the one in Kapeeka thrive, the country will save foreign exchange. Ultimately, this benefits the entire supply chain-from suppliers of the raw materials, the transporters, employees, distributers and the Government.

A sustained growth in industrialisation will not only save on the huge import bill, but create mass employment opportunities and benefit from the trickle-down effect in the production supply chain.

For example, in the last financial year, we imported tiles worth about $24m, which could have been saved.

Uganda Revenue Authority (URA) Customs have emphasised the need to fast track facilitation of manufacturers and exporters to ensure unnecessary delays are eliminated.

We expect the same from other Government agencies involved in regulation of international trade supply chain such as the Uganda National Bureau of Standards and National Drug Authority. 

As we facilitate them, we urge the manufacturers and new investors to utilise services of professional and recognised/licensed service providers such as clearing agents, transporters and tax advisors.

In the past, we witnessed a disturbing trend- - investors are misled or misadvised and by the time management is informed, a lot of frustration has been encountered.

For instance, in the recent Dongsong case, 15 containers of the company were cleared at the Port of Mombasa by Customs to the agent and transporter.

However, instead of driving them to Uganda, the transporter took the trucks in the garage for service and repair.

Eventually, some took 13 days and others 21 days to reach Malaba, a journey that would ordinarily take a maximum of three days with the recent innovations in clearance.

Because of the dishonesty of some insensitive service providers, they often claim Customs “is holding” the containers and, therefore, mislead the owners of goods to believe so.

As Customs, we shall not tolerate such unethical behaviour and action will be taken on such transporters and agents.

Imports (and some exports) are currently cleared under the Single Customs Territory (SCT).

To ensure efficiency, we have over 20 officers in Mombasa, Nairobi, Kisumu, Eldoret and Dar es Salaam for purposes of facilitating quick clearance of imports and exports.

Customs will not tolerate any unnecessary delays caused by agents or transporters because this frustrates our economic transformation journey.

Every year, we set key performance indicators (KPIs) for clearing firms among which is maximum clearance target of two days just like we do for Customs staff. We have in total 13 KPIs for clearing agents and 72 KPIs for Customs staff, who are periodically assessed.

Since the introduction of these performance measures in 2015, we have seen average clearance time reduce from 3.79 days to 1.6 days.

Our desire is to further reduce clearance time to hours. But this is affected by some unscrupulous importers, who submit falsified invoices and incomplete documentation, hence resulting in queries and delays.

Going forward, we shall introduce the same for transporters before they are given transit goods licenses (TGL).

Anyone performing below our expectations and frustrating importers will have their licenses revoked.

All these measures will result in reduced cost of doing business and attract more investments into the country.

In the next 15 years, I am very optimistic that if this trend of industrialisation we are seeing continues, we shall see a different country.

URA published a tax incentives guide to enable everyone appreciate and make a right decision in regards to the sectors to invest in.

We shall progressively update this guide and offer more trade information in relation to international preferential market opportunities available. We all must play a role to support this trend.

The writer is the Commissioner Customs, URA.

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