Manufacturers want more help

The Ugandan manufacturing sector has achieved much since the dismal days of 30 and 40 years ago when no factory was producing anything at all. However manufacturers today still believe they face many problems that the government is slow to attend too.  In this interview, Ssebagala Kigozi, the Executive Director of the Uganda Manufacturers Association spells out their concerns to Baz Waiswa. Below are excerpts.

Question: Are you satisfied with the way government implemented the 2012/2013 budget?

Answer: Government has responded to some of the things we wanted though performance has not met our expectations.
Some of the things government has worked on include reducing the 25% import duty on vacuum packaging materials to 10% hence giving us a competitive position and improvement in infrastructure.
A number of roads are under construction. This will improve our movement of raw materials and finished products countrywide.
The country had a power deficit of 300MW in 2010, but Bujagali came on board and reduced the deficit, we have not decreased the deficit by 100%  but Bujagali reduced load shedding.
Also there has been increased involvement of the private sector as far as public private partnership is concerned; we have been involved in making policies and on issues affecting the common man.
There has been great emphasis on reduction of bureaucracy which delays decision making in the end affecting our work.
Nonetheless there are things government has failed to deliver. For example, government promised a standard railway gauge in 2005 when the East African Community initiated the Customs Union.
Partially infrastructure is still a problem, the roads, water transport, making use of Lake Victoria linking Dar es Salaam to Kampala to reduce road wear and tear.
On the power issue, we want Karuma, Isimba and other projects to come on board.
We requested for incentives to be given to people who use the southern route also known as the Central Corridor between Dar es Salaam and Kampala to reduce congestion at Mombasa and provide an alternative. Because it’s a longer route, we thought an incentive like reduced taxes and rebates would be a good thing. We wanted good roads to South Sudan, Busia and Malaba and we agreed with the government that they should work on a dual carriageway to the border with Kenya; all these are not yet in place.
We also asked government to provide us with cheap credit financing to avoid high interest rates charged by commercial banks. We think we should have a relatively cheaper and affordable financing so we can remain competitive.
Government in 2010 started an annual credit facility worth Ush30 billion ($11.3 million) as provision for the industrialist in the agriculture sector with a bias to value addition. But due to bureaucracy at Bank of Uganda and other conditions it is hard to access it.

What do you want captured in the next budget?

We want what has not been done to be done, projects like Karuma, Isimba, roads, incentives, railway, dual carriage roads, affordable credit should be worked on.
We also want the removal of excise duty on cement, cosmetics, personal care products, drugs, removal of VAT on soda, paper, juices, and tea.
We also want government to move the threshold for Pay As You Earn (PAYE) from Ush235, 000 ($89) to Ush250, 000 ($94).

Is government being responsive to your challenges as key stakeholders in this economy?

Government responds well, the current Minister of Trade (Amelia Kyambadde) is on our side. The Minister of Finance (Maria Kiwanuka) is an industrialist so she understands our challenges. This is what we wanted, people who understand our problems.

What is your take on the proposal by power distribution companies to charge electricity in dollars?

The Electricity Regulatory Authority (ERA) wanted us to pay power bills through the Automatic Tariffs Adjustment Scheme (ATAS) which we refused.
In Uganda we rarely see the dollar coming down which means we would be paying higher tariffs every time the dollar goes up.
In principal we agreed with ERA that we don’t use ATAS to determine the tariff plan, but rather they make an increase which doesn’t exceed 10% of the current price. If they want to increase power prices it should not go beyond 10%  and it shouldn’t be in dollars.

How do you think the counterfeit problem can be best addressed?

We got tired of talking about the need for the counterfeit Bill, for the last 10  years we have talked and the act is not in place.  Up to now counterfeits continue coming into the country putting the lives of our people in danger.

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