National Policy to Boost Industrialisation and Jobs

Unemployed young persons and the private sector have cast a doubt on whether the National Industrial Policy 2020 that has just been approved by cabinet can address the job scarcity in the country.

The new policy that takes effect January 2021, comes after the number of industries have more than doubled since 2008 to 5,200, while contribution of the industrial sector to the economy, has grown three times to 27 per cent as of 2019. It picks up from the National Industrial Policy 2008 and gives new direction to the industrial sector for the next 10 years.

The New Policy targets increased value addition on local raw materials for both the local and export market for manufactured products. This should also lead to an increase in job opportunities. By the end of 2019, Uganda was on average processing its raw materials to just 8.3 per cent, buy the policy aims to increase this to at least 16 per cent by 2030.

The policy provides for increased adoption of environmentally sustainable technologies by manufacturing sub sectors, a response to the increasing cost of gas emissions on the environment. While most of the country is not yet greatly affected by high gas emissions, Kampala was recently found to have undesirable air quality especially in industrial parks, but the main problem was with poor industrial waste disposal, which affects water bodies.

Trade Minister Amelia Kyambadde says that the policy also aims at increasing public investment and nurturing of industrial development Projects in strategic areas, including some traditional and non-tradition cash crops, as well as the extractives industry mainly mining and oil and gas related industries.

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It also notes that need to develop and strengthen skilled human resource in order to increase productivity and efficiency in the industrial sector, as well as accelerating development and use of research innovations.

It is hoped that by the end of the policy in 2030, the industrial sector will be contributing 31.7 per cent to the economy, up from the current 27 per cent. The policy also aims at Increasing the number of jobs in the industrial sector from 1.3 million to over 2 million jobs in 2030.

Kyambadde advises Ugandans especially the youth to invest in small projects or even take up short vocational courses because laying off of workers can no longer be avoided.

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But a number of young persons talked to think that manufacturing will not be the solution to job scarcity because digitization is affecting the growth in job opportunities. Some of them think the job market will never be the same again and that the future is in online employment as industries continue to lay off workers.    

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The government will hope to achieve this by expanding the Rural Industrial Development Program to enhance value addition activities based in communities. It also plans to enhance the capacity of Uganda Development Corporation to invest in strategic industries that will create jobs and opportunities for subcontracting by micro, small and medium enterprises.

Increase in investment in industries is also expected to create many opportunities for raw material supply for Ugandans. On whether there is a requisite infrastructure enough to support this policy, the government says currently there is excess capacity for electricity generation and that it is steadily increasing.   

Currently Uganda has an installed capacity of 1,252 megawatts, but is expected to go to more than 2000 early next year, while the current demand is just about 800 megawatts. Current road construction and improvement projects will be vital to support access to markets and to sources of raw materials.

The local private sector has always accused the government of promoting foreign investors instead of developing the local entrepreneurs, who have largely remained in trade and small-scale informal processing.

But Kampala City Traders Association Chairman Everest Kayondo says it is time for prosperous traders to venture into manufacturing the things they have been importing, instead of focusing on real estate, which has few linkages.

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The government, together with development partners is developing Border Export Zones intended to facilitate cross border trade between Uganda and the neighbouring countries. The zones include Katuna, Busia, Lwakhakwa, Oraba, Mpondwe, Bunagana and Elegu, where construction works are ongoing.

This is on top of the already functioning One Stop Border Posts aimed at facilitating movement of goods and persons through Malaba, Elegu, Busia, Mutukula, Mirama Hills and Katuna.