Pam 7

Keynote Address by Executive Chair, National Planning Authority, Prof Pamela Mbabazi, at Economic ‘Mkutano’ 2021 on Industrialization

[Slightly edited; #MUKUTANO21 held under the theme “Building a Sustainable and Competitive Industrial Sector in Uganda”]

“Permit me, first and foremost, to thank our hosts “The Mkutano Company” for organizing this exciting and at the same time important “Mkutano” or meeting to discuss industrialization.

Industrialization has been instrumental in the economic development of many countries in the world. For countries that have been able to industrialize, there has been significant improvements in labour productivity which made mass production possible, eventually translating into increased standards of living.

Industrialization increases the productivity of the different factors of production and strengthens the forward and backward linkages among the different sectors of the economy.

With a huge agricultural and mineral potential, good weather, a young and expanding population and a strategic location at the heart of regional trading blocs, development of a robust manufacturing sector is expected to accelerate Uganda’s attainment of its socio-economic transformation agenda.

And manufacturing forms the core of the industrial sector. IV. Manufacturing provides an opportunity to the economy for increasing production for export expansion of high value products and import replacement ultimately contributing to job creation, increased incomes and improvement in quality of life

In recognition of the challenges, we as a country, have faced to date in our industrialization journey, the National Development Plan 3 (NDP3) has dedicated three of the 20 NDP3 programmes to Industrialization and Private Sector Development, namely: Manufacturing; Innovation, Technology transfer and Development; and Private Sector Development.

Through these three NDP3 programmes, but also through other programmes, Government plans to support the private sector (where possible), and where not possible participate directly in the development of our manufacturing industry for export expansion of high value products and import replacement ultimately contributing to job creation, increased incomes and improvement in quality of life.

Some of the targets that government, the private sector, and our development partners will be working towards over the next five years include:

a. Increase the share of manufactured exports to total exports from 12.3 % to 19.8 %;

b. Increase the industrial sector contribution to GDP from 27.1 % to 28.6 %;

c. Increase share of labour force employed in the industrial sector from 7.4 % to 10 %;

d. Increase manufacturing value added from as a percentage of GDP from 8.3 % to 10 %.

e. Increase spending by both government and the private sector in research and innovation.

To support achievement of these NDP3 program targets, government will consider:

a. Levying higher import tariffs on selected commodities that are either being produced domestically or could competitively be produced here;

b. Fast-track the construction of Industrial Parks to efficiently increase access of potential manufacturers to strategic infrastructure;

c, Review tax policy to promote local investments in industrialization;

d. Prioritize infrastructure development supportive of our regional and global trade aspirations roads, rail, cold storage facilities and electricity;

e. Prioritize the development of industrial value chains that have a low import content (signaling availability of domestic raw materials), and strong backward and forward linkages;

Already, the Science, Technology Development and Innovation Program Working Group has prioritized the development of eight industrial value chains, namely:

a. Iron and Steel

b. Engineering

c. Mobility

d. Agro-industry

e. Beauty and apparel

f. Pathogens

g. Digitalization, and

h. Oil and Gas and the associated petrochemical industry.”