Private sector slams budget
Jun 12, 2011
CEMENT manufacturers have slammed regional governments for letting cheap imports off-the-hook. The East Africa Cement Producers Association is unhappy that the budget proposals read across the region last week, disregarded the call to increase the common external tariff to discourage cheap imports.
By Vision team
CEMENT manufacturers have slammed regional governments for letting cheap imports off-the-hook. The East Africa Cement Producers Association is unhappy that the budget proposals read across the region last week, disregarded the call to increase the common external tariff to discourage cheap imports.
The tariff was reduced to 25% in 2008 as a temporary measure to increase cement imports into the region to curb the perceived short supply.
However, manufacturers wanted the tariff revised back to 35% or to the $50 per tonne levy since the region had boosted its output.
“This is the time the East African governments should consider to spur the growth of local industrialisation by hiking taxes for cheap imported cement.
“We are discontented that budgets were read in total disregard of this,†David Njoroge, the association’s chief, noted.
He said Hima Cement had commissioned a new factory in Kasese, which had more than doubled its output from 350,000 tonnes to 850,000.
Njoroge observed at the post-budget meeting at the Kampala Serena Hotel that total cement production in the East African region is 11 million tonnes compared to a demand of eight million after the players invested over $0.5b in the last three years.
Harpreet Duggal, the association secretary, disclosed that the region’s cement industry was under threat from cheap imports from the Middle East and Asia where production costs were lower.
“We cannot favourably compete with producers in China and Pakistan or even the Middle East.
“Governments in these regions give heavy subsidies to their producers mainly in power and transport, which are the biggest components of cement costs,†he pointed out.
Manufacturers were hopeful that the budgets would also consider reducing tariffs on energy. Up to 50% of production costs in East Africa are energy-related.
Gerald Ssendaula, the Private Sector Foundation Uganda (PSFU) chairman, challenged the Government to ensure rational utilisation of funds allocated towards boosting power availability.
The 2011/2012 budget allocated sh828.6b for the construction of the 600MW Karuma and the completion of the 250MW Bujagali hydro power projects.
“The idea of constructing another dam is welcome and should make electricity ever available to the industrial sector,†Ssendaula said during a post-budget analysis luncheon at the Uganda Manufacturers Association Showground in Lugogo, Kampala.
Ssendaula lamented that though standards were key in product competitiveness, the budget did not consider more funding to the Uganda National Bureau of Standards (UNBS).
UNBS lacks the funds to carry out standards development and effectively enforce its operations. Gideon Badagawa, the PSFU executive director, asked the Government to put emphasis on roads linking farmers to the markets.
He called for a quick implementation of railway transport network that seeks to rehabilitate the Kampala- Malaba-Tororo-Pakwach and Kampala Mombasa lines.
“We can hardly transport our coffee exports to Mombasa for auctioning because they are bulky. It will be hard for us to compete. The budget speech sounds good, but it will be better if implementation is the order of the day,†he added.
But Maria Kiwanuka, the finance minister, told the Institute of Certified Public Accountants of Uganda post-budget breakfast meeting at the Imperial Royale in Kampala that her proposals were broad-based and catered interests across the board.
“We hope that this budget is a win-win situation between the Government and the private sector because it addresses major constraints like inadequate physical infrastructure, limited supply of critical production in puts, inadequate skills, negative attitude towards agriculture among others,†she said.
She said the budget was sensitive to development in that it focused on improving priority areas like infrastructure development in roads and energy, enhancing agriculture productions and productivity, private sector development, improving public service delivery and revenue mobilization to improve tax collection.
CEMENT manufacturers have slammed regional governments for letting cheap imports off-the-hook. The East Africa Cement Producers Association is unhappy that the budget proposals read across the region last week, disregarded the call to increase the common external tariff to discourage cheap imports.
The tariff was reduced to 25% in 2008 as a temporary measure to increase cement imports into the region to curb the perceived short supply.
However, manufacturers wanted the tariff revised back to 35% or to the $50 per tonne levy since the region had boosted its output.
“This is the time the East African governments should consider to spur the growth of local industrialisation by hiking taxes for cheap imported cement.
“We are discontented that budgets were read in total disregard of this,†David Njoroge, the association’s chief, noted.
He said Hima Cement had commissioned a new factory in Kasese, which had more than doubled its output from 350,000 tonnes to 850,000.
Njoroge observed at the post-budget meeting at the Kampala Serena Hotel that total cement production in the East African region is 11 million tonnes compared to a demand of eight million after the players invested over $0.5b in the last three years.
Harpreet Duggal, the association secretary, disclosed that the region’s cement industry was under threat from cheap imports from the Middle East and Asia where production costs were lower.
“We cannot favourably compete with producers in China and Pakistan or even the Middle East.
“Governments in these regions give heavy subsidies to their producers mainly in power and transport, which are the biggest components of cement costs,†he pointed out.
Manufacturers were hopeful that the budgets would also consider reducing tariffs on energy. Up to 50% of production costs in East Africa are energy-related.
Gerald Ssendaula, the Private Sector Foundation Uganda (PSFU) chairman, challenged the Government to ensure rational utilisation of funds allocated towards boosting power availability.
The 2011/2012 budget allocated sh828.6b for the construction of the 600MW Karuma and the completion of the 250MW Bujagali hydro power projects.
“The idea of constructing another dam is welcome and should make electricity ever available to the industrial sector,†Ssendaula said during a post-budget analysis luncheon at the Uganda Manufacturers Association Showground in Lugogo, Kampala.
Ssendaula lamented that though standards were key in product competitiveness, the budget did not consider more funding to the Uganda National Bureau of Standards (UNBS).
UNBS lacks the funds to carry out standards development and effectively enforce its operations. Gideon Badagawa, the PSFU executive director, asked the Government to put emphasis on roads linking farmers to the markets.
He called for a quick implementation of railway transport network that seeks to rehabilitate the Kampala- Malaba-Tororo-Pakwach and Kampala Mombasa lines.
“We can hardly transport our coffee exports to Mombasa for auctioning because they are bulky. It will be hard for us to compete. The budget speech sounds good, but it will be better if implementation is the order of the day,†he added.
But Maria Kiwanuka, the finance minister, told the Institute of Certified Public Accountants of Uganda post-budget breakfast meeting at the Imperial Royale in Kampala that her proposals were broad-based and catered interests across the board.
“We hope that this budget is a win-win situation between the Government and the private sector because it addresses major constraints like inadequate physical infrastructure, limited supply of critical production in puts, inadequate skills, negative attitude towards agriculture among others,†she said.
She said the budget was sensitive to development in that it focused on improving priority areas like infrastructure development in roads and energy, enhancing agriculture productions and productivity, private sector development, improving public service delivery and revenue mobilization to improve tax collection.