UIA launches initiative to promote transformation of traders of imported products into local manufacturers

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The Uganda Investment Authority (UIA) has launched a groundbreaking initiative to encourage traders in Kampala’s commercial hub, popularly known as Kikuubo, to switch from trading in imported products to local production.

The “Helping Kikuubo Traders Transform into Manufacturing” initiative is based on the spirit of promoting import substitution, which aims to enable traders who have been engaged in trading imported products for many years to seize import substitution opportunities and the incentives that come with it, such as zero tax rating, free industrial park land and tax holidays.

The move was announced by the Director General of the Uganda Investment Authority (UIA), Robert Mukiza, during a meeting with traders from Kikubo and officials from the Global Competitiveness Initiative (GCI) and the Presidential Advisory Council on Export and Industrial Development (PACEID) at the UIA headquarters on Tuesday (July 30).

Mukiza said a special unit under the Domestic Investment Department has formulated various work plans, targets and timetables to ensure that businessmen move faster from the trading industry to the manufacturing industry.

Mukiza said traders, especially those from Kikubo, have a better understanding of the business environment and supply chain and have a healthy cash flow, which are key factors in the country’s shift from imported products to local production.

“Domestic investors are vital to Uganda’s industrialisation, hence the UIA’s special mission is to get more traders to transition to producing the products they have been importing,” Mukiza said, adding that once many traders successfully transitioned to manufacturing, more would follow suit, thereby expanding the domestic investment base.

Mukiza believes that manufacturing has a greater multiplier effect than trade. The former can promote local production, increase the value of local raw materials, create more jobs for young people, increase personal and government income, and contribute to the sustainable development of the economy.

Mukiza said Ugandans should look at the bigger picture when investing, focus on import substitution, look beyond the Ugandan market and look at East Africa.

Common Market for Eastern and Southern Africa (COMESA), the African continent and the global market.

Mukiza said foreign investors are flocking to Uganda because it not only has the best investment and business environment in East Africa, but is also the third most profitable country in the world after Egypt and Ethiopia.

He said that in order to accelerate the transformation from trade to manufacturing, UIA was acquiring more land in the Namanwe Industrial Park specifically to cater to Kikuubo traders interested in engaging in manufacturing, adding that land was also available in other industrial parks in Uganda.

“If you are targeting markets like the Democratic Republic of Congo or South Sudan, you don’t need to set up your factory in Greater Kampala, you can go to industrial parks in Nebbi, Arua or Kisoro,” he stressed.

Joshua Kassibo, a representative of the traders, said they had long believed that the UIA favoured foreign investors but through sustained engagement, they were now aware of investment opportunities and incentives they had been missing out on.

“We used to think that investors were only foreigners, but now we know we can transition to manufacturing and we are ready. The main issue is how to work with UIA so that we can transition to processing and manufacturing,” said Kasibo.

Global Competitiveness Initiative Chairman Dawudi Migreko urged Ugandans to look at how to produce, process, manufacture and export competitive products.

“If you have been in the business of producing a product for years, now is the time to start producing it locally. Let’s join the new wave of import substitution,” Migreco said.

Richard Nuwenyesiga, Director of Domestic Investment, assured traders that UIA will assist them throughout the transition process through its one-stop shop, which provides investment and business support services from more than 15 government agencies and private sector players.

Two prominent Kikuubo businessmen who have transitioned from trading to manufacturing are Gaster Lule Ntake and Badru Muwanga (Luuka Plastics).

Ntake, which started as a modest bakery in 1986, has grown into one of the largest edible oil refineries in Uganda and East Africa. The multi-billion shilling Ntake edible oil refinery, located in the Namanwe Industrial Park, is nearing completion. Upon completion, the refinery will employ 300 people directly and more than 1,000 people indirectly.

Ntake Group of Companies also has ventures into other products such as confectionery, flour, napkins, etc. and currently directly employs 1,426 people.

On the other hand, Luuka Plastics was established in 1996 and initially engaged in the trading of plastic products in Kikuubo. Later, the company shifted to the production of packaging materials for agricultural products, confectionery, cement, pharmaceuticals, etc. The packaging products include branded and non-branded products, as well as packaging for sturdy products such as nails.

The company’s first factory was located in Kawempe, where the factory and head office are still located. Today, Luuka Plastics has three factories, the largest of which is located in the Namanve Industrial Park, where the government, through the Uganda Investment Authority (UIA), provided the company with land and facilitated its establishment.

Import Substitution in Uganda

Uganda’s merchandise export revenue increased by 39.4% from $6398.6

1 million in April 2024 to $891.97 million in May 2024.

This was mainly driven by increased export revenues from coffee and gold during the month.

Imports increased by 31.2% from $948.88 million in April 2024 to

In May 2024, the number will be 1,244.66 million. The reason for the increase is

Animal and plant products, beverages, etc. imported by the private sector

This month, imports increased by 10% to 30,000 tons, of which import value increased by 15%. Imports increased by 60% to 30,000 tons. Machinery, motor vehicles, etc. also saw increases.