Kampala, May 4, 2021 - The Government of Uganda with technical support from the United Nations Development Programme (UNDP) has launched a new industrial policy which is expected to spur industrial development and economic transformation.
The National Industrial Policy (NIP) 2020 is a review of the 2008 policy and places more emphasis onAgro-Industries, Extractive Industries and Knowledge-based Industries to provide a framework for Uganda’s industrialisation, employment and wealth creation.
Launching the policy and its implementation strategy, the Prime Minister of the Republic of Uganda, Rt. Hon. Dr. Ruhakana Rugunda emphasised that industrialisation is critical for Uganda’s structural and socio-economic transformation. “This is a key milestone in the promotion of industrialisation for our country (Uganda),” Prime Minister Rugunda said.
The launch was attended by the Minister of Trade Industry and Cooperatives, Hon. Amelia Kyambadde, the UNDP Resident Representative, Ms. Elsie G. Attafuah and the Turkish Ambassador to Uganda, H.E Fikret Kerem Alp as well as industrialists and policy makers.
The Rt. Hon. Dr. Rugunda explained that Uganda’s quest for industrialisation is highlighted in Vision 2040 and the third National Development Plan (NDP III), which are Uganda’s medium and longer-term plans that prioritise industrialization as a key driver for Uganda’s prosperity. The overriding theme of NDP III is, “Sustainable Industrialisation for Inclusive Growth, Employment and Sustainable Wealth Creation.”
In addition to its central role in national development planning, industrialisation as a driver for Uganda’s development is captured in the 2030 Agenda for Sustainable Development. UN Sustainable Development Goal (SDG) No. 9 calls for the building of resilient infrastructure, promotion of inclusive and sustainable industrialisation and the fostering of innovation.
According to Government, the National Industrial Policy will address challenges faced by the sector such as; lowering the cost of manufacturing, especially energy and transport, and increasing the range of value added competitive products to create more employment.
The Policy will also help address the trade imbalance by enhancing import substitution, lowering the cost of industrial finance, widen the industrial base and improve integration with agriculture, mineral exploitation, and other domestic natural resources.
Industrial workers and youth will be given the requisite skills through the policy, while technology used in the industries will be upgraded and efficiency of industrial operations will be improved with better resource utilisation.
The Rt. Hon. Dr. Rugunda acknowledged important milestones already realized by Government to promote industrialization such as the building a countrywide road network to connect the country, and construction of hydro dams to increase power generation and the commitment to reduce the cost of electric power from USD 8.7 cents to USD 5 cents.
The Prime Minister commended UNDP for the support to the Government of Uganda in the promotion of sustainable and inclusive industrialization as exemplified in the development of the National Industrial Policy and the commitment to popularize it across the country, and support its implementation process.
On her part, the Minister of Trade, Industry, and Cooperatives (MTIC), Hon. Amelia Kyambadde, noted that there was need to demystify industrialisation so that citizens do not view it as only a product of Foreign Direct Investments (FDIs). “Sometimes we think it is only foreign groups that have to come to our countries and industrialise. Stand up and industrialise your country,” Minister Kyambadde said.
Uganda’s industrial sector is comprised of manufacturing, construction, mining and utilities. The sector has grown with industry contribution to the Gross Domestic Product (GDP) rising from 11% in 1989/1990 to 27.1% in 2018/2019.
According to the Uganda Bureau of Statistics, manufacturing is currently the largest component of the industry sector, contributing 57.2% of the sector output in 2018/2019. The number of manufacturing enterprises has grown from about 83 in 1986 to 5200 in June 2020.
“That is growth, but it should have trebled. With the National Industrial Policy, it will change. This has been my dream and I am glad it has unfolded."
Speaking at the same event, the UNDP Resident Representative, Ms. Elsie G. Attafuah observed that, when handled successfully, industrialisation generates export revenue, jobs, new technologies that foster innovation, international competitiveness as well as rapid and sustained prosperity.
“Uganda has done well to swiftly finalise and launch this national industrialisation policy and implementation plan to seize the rising opportunities in manufacturing and industrialization across a variety of sectors,” Ms. Attafuah noted.
“Likewise, Uganda needs to move quickly to prepare a national implementation strategy for the African Continental Free Trade Area. I am pleased to commit UNDP’s support to the government in this regard.”
Ms. Attafuah urged Ugandan policy makers to consider important enablers for industrialisation such as, skilled labour, digital technology, and a strong science, technology and innovation ecosystem.
The UNDP Uganda Accelerator Lab, she said, is engaged with government, private sector and civil society to promote innovation and enterprise in response to complex development challenges.
UNDP’s new Digitalisation, Innovation and Smart Cities (DISC) Programme for 2021-2025 will also contribute to Uganda’s NDP III goals with a focus on strengthening the national innovation and start-up ecosystem and accelerating digital transformation.
Goal of NIP
The goal of the National Industrial Policy 2020 is to double the manufacturing value added as a percentage of GDP from the 8.3% in 2018.19 to 16% in 2029/30 and increase industry sector contribution to GDP from 27.1 2018/19 to 31.7% in the next ten years.
Objectives of the NIP:
- Increase public investment and nurturing of industrial development projects in strategic areas
- Increase and sustain the supply of quality raw materials for value addition
- Develop and strengthen skilled human resource to increase productivity and efficiency in the sector
- Accelerate development, use of research innovations and adoption of appropriate technologies in industry
- Promote resource efficient and environmentally sustainable industrialization
- Agro-Industries - Fruits, Coffee, Tea, Cassava, Cotton, Oil seeds, Bananas, Textile & Apparels, Grains, Sugar cane, Cassava, Dairy, Leather and Leather products.
- Extractive Industries- Iron and steel, Cement, Oil and gas (LPG, synthetics, plastics and petrochemicals), Salt and Fertilizers.
- Knowledge based industries- Automobiles, pharmaceuticals, electrical and electronic products.