Prime
New plan to support traders transition to manufacturing
The initiative will largely target Kikuubo traders, many of whom, have over time built solid investment capital. Photo / File
What you need to know:
- Uganda Investment Authority says the Transitioning Kikuubo Traders to Manufacturing initiative is part of a plan to support government’s industrialisation agenda
Uganda Investment Authority (UIA) has launched a new initiative in which it will support traders with a sizeable capital base to transition into manufacturers.
The initiative, codenamed: “Transitioning Kikuubo Traders to Manufacturing” is part of government’s agenda to promote import substitution through working out a plan in which traders can, through a supported process, start manufacturing the goods they import.
Such traders, UIA says, will benefit from several incentives, among which include tax holidays, free industrial park land, and capital guarantees.
UIA Director General Robert Mukiza, said at a meeting between UIA, traders from Kikuubo, officials from Global Competitiveness Initiative, and the Presidential Advisory Committee on Exports and Industrial Development that they have already created a special desk under the Domestic Investment Division to guide on work plans, targets and timelines to ensure a faster transition of business people from trading to manufacturing.
“Domestic investors are crucial to Uganda’s industrialisation that is why we have a special mission to see more traders transition into manufacturing products that they import,” he said, noting that because of its greater multiplier effect, the plan will boost local production, value addition and create jobs for young people.
A research by Friedrich-Ebert-Stiftung in 2020 noted that government had set out to turn the misfortunes of Covid-19 into an opportunity by converting the country’s huge import bill into a boost for domestic manufacturing capacity through import replacement that would be pursued between 2020 and 2025.
The research also noted that a critical review had established that whereas import substitution was necessary to restrain the growth of other imports and thus release foreign exchange for capital equipment, it required avoidance of past mistakes that had failed it in the past.
It was not immediately clear why UIA was launching its initiative four years after government launched the import substation strategy in 2020.
However, Mr Mukiza said to fasten the trading-to-manufacturing transition, UIA had acquired more land in the Namanve Industrial Park to be specifically allocated to traders interested in the initiative but noted that those targeting markets in DR Congo or South Sudan would be allocated land in other industrial parks across the country.
Kikuubo remains one of the largest gateways to Uganda’s retail and wholesale trade, boosting some of the country’s most capitalised businesses.
By 2016, the hub, in the centre of downtown Kampala, according to Kampala Capital City Authority trading licences, was number one among the revenue sources, hosting between 35,000 and 40,000 traders.
Handhold traders
Mr Richard Nuwenyesiga, the UIA director of domestic investment, said they will handhold traders throughout the transition process through the one-stop-shop that offers investment and business support services from over 15 government agencies and private sector players.
