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The initiative, titled "Transitioning Kikuubo Traders to Manufacturing," seeks to encourage traders who have long dealt in imported goods to shift towards local manufacturing

Government unveils plans to transition Kikuubo traders into manufacturing | Pulse Uganda

Samson Waswa

This move is grounded in the principle of import substitution, providing traders with various incentives such as zero tax rates, free industrial park land, and tax holidays, among other benefits.

Robert Mukiza, the Director General of UIA, made the announcement on July 30 during a meeting held at UIA's head office. The gathering included traders from Kikuubo, officials from the Global Competitiveness Initiative (GCI), and members of the Presidential Advisory Committee on Exports and Industrial Development (PACEID).

Mukiza emphasised the importance of domestic investors in Uganda's industrialisation journey, highlighting that traders in Kikuubo possess extensive knowledge of the business environment and supply chains. He noted that these traders have a substantial cash flow, making them well-positioned to transition into local manufacturing.

Mukiza stated, "Domestic investors are crucial to Uganda’s industrialisation. That is why it is UIA’s special mission to see more traders transition to the manufacture of products they have been importing."

He further explained that manufacturing offers greater multiplier effects than trading, as it boosts local production, adds value to local raw materials, creates jobs, increases personal and government incomes, and contributes to sustainable economic development.

Check out: <a href="https://www.pulse.ug/business/museveni-insists-on-taxes-as-traders-agree-to-open-shops/psezlgh">Museveni insists on taxes as traders agree to open shops</a>

UIA Director General Robert Mukiza addressing Kikuubo traders in Kampala

The UIA has established a special desk within its Domestic Investment Division, complete with work plans, targets, and timelines, to facilitate a smooth transition for traders. This desk will provide the necessary support and guidance, ensuring that the shift from trading to manufacturing is as efficient and effective as possible.

To support this transition, UIA is also acquiring additional land in Namanve Industrial Park, specifically for Kikuubo traders interested in manufacturing. Mukiza pointed out that industrial park land is also available in other regions across Uganda, such as Nebbi, Arua, and Kisoro, offering strategic locations for accessing markets in neighbouring countries like the Democratic Republic of Congo and South Sudan.

During the meeting, Joshua Kassibo, a representative of the Kikuubo traders, acknowledged the shift in perception among traders towards UIA.

He stated, "We previously thought 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 to enable our transition to processing and manufacturing."

This sentiment was echoed by Daudi Migereko, the chairperson of the Global Competitiveness Initiative, who urged Ugandans to consider producing, processing, manufacturing, and exporting competitively. He encouraged traders to embrace the new wave of import substitution, stating,

"If you have been trading in a product for many years, it is time to start manufacturing it locally."

Richard Nuwenyesiga, the Director for Domestic Investment at UIA, assured traders of the Authority's commitment to supporting them through the transition process.

He highlighted the services offered by UIA's one-stop-shop, which provides investment and business support from over 15 government agencies and private sector players. This comprehensive support system aims to streamline the transition and address any challenges that may arise.

The success stories of two prominent Kikuubo traders who have already transitioned to manufacturing serve as a testament to the potential of this initiative.

Gaster Lule Ntake, who began with a basic bakery in 1986, is now on the verge of completing a multi-billion-shilling edible oil refinery in Namanve Industrial Park.

Upon completion, the refinery is expected to employ 300 workers directly and over 1,000 indirectly. Ntake Group of Companies, which also produces confectioneries, flour, and serviettes, currently employs 1,426 people directly.

Similarly, Luuka Plastics, founded by Badru Muwanga in 1996, transitioned from trading in plastic products to manufacturing packaging materials for various industries.

The company now operates three plants, including a significant facility in Namanve Industrial Park, facilitated by UIA. This transition has not only expanded the company's operations but also contributed to the local economy.

The "Transitioning Kikuubo Traders to Manufacturing" initiative comes at a time when Uganda's import substitution efforts are becoming increasingly critical.

Recent economic data indicates a substantial increase in merchandise export earnings, rising by 39.4% from USD 639.86 million in April 2024 to USD 891.97 million in May 2024.

However, the import bill also grew by 31.2% during the same period, leading to a widened trade deficit. This underscores the importance of reducing reliance on imports and boosting local production.

UIA Director General Robert Mukiza (4R) and Daudi Migereko (4L) with Kikuubo traders at UIA Head Office in Kampala

Government unveils plans to transition Kikuubo traders into manufacturing

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