The Government has set aside a significant budget of sh207.3 billion for the manufacturing sector in the upcoming 2024/2025 national budget, scheduled for announcement on Thursday.
This allocation, as outlined in budget documents, comprises sh51.8 billion from the Ugandan government and an additional sh155.6 billion from external sources, reflecting a concerted effort to propel industrial growth and development within the country.
Uganda’s manufacturing sector has undergone remarkable expansion, evolving from a modest count of 80 factories in 1986 to a thriving network of over 5,000 establishments spread across various regions of the nation.
President Yoweri Museveni has consistently emphasized the pivotal role of value addition, particularly through manufacturing, in driving Uganda’s economic transformation. This ambitious vision aims to elevate the country’s economy from its current $50 billion mark to exceed $500 billion within the next decade or so.
Trade, Industry, and Cooperatives Minister Francis Mwebesa underscores the strategic significance of the government’s initiative to establish 25 industrial parks nationwide. These parks are envisioned to serve as catalysts for industrial production, providing essential infrastructure such as roads, water, electricity, and ICT facilities to foster manufacturing activities and generate employment opportunities for Ugandans.
Despite the notable growth of the manufacturing sector, its contribution to the GDP remains relatively modest. This is largely attributed to the dominance of small and medium enterprises (SMEs), comprising 93.5% of operating firms. Limited economies of scale in production hinder their ability to significantly impact GDP growth.
Efforts to enhance the sector’s capacity for value addition and diversification are imperative to unleash its full potential as a driver of economic growth. Industrial hubs like Mbale, Nakaseke, and Namanve exemplify the need for concerted strategies to transition towards higher value-added manufacturing activities.
The establishment of industrial parks, notably the Namanve Industrial Park, symbolizes Uganda’s commitment to fostering industrialization. This investment, amounting to sh735 billion, exemplifies a comprehensive approach to creating an enabling environment for industrial growth, technological innovation, and job creation.
Expanding the horizon of industrial innovation, the Government plans to establish science, technology, and innovation parks in various districts. These initiatives aim to nurture creativity and technological advancement, laying the foundation for sustainable industrial growth across diverse sectors.
Uganda’s industrial vision for 2040 sets ambitious targets, including a significant increase in the sector’s contribution to GDP, expansion of the labor force engaged in industry, and a boost in manufactured exports. These objectives underscore the country’s steadfast commitment to advancing its industrial agenda and fostering economic prosperity.
Furthermore, Uganda’s industrial progress extends beyond domestic borders, as the country increasingly penetrates regional markets such as Kenya, South Sudan, DR Congo, Rwanda, and Burundi. Enhanced domestic production has reduced reliance on imports for key products and positioned Uganda as a self-sufficient player in the region.
With a growing contribution to GDP and increasing tax revenues, the industrial sector plays a pivotal role in Uganda’s economic landscape. Efforts to address environmental concerns and promote sustainable industrial practices are integral to ensuring long-term growth and resilience.
The Ministry of Trade, Industry, and Cooperatives spearheads initiatives to accelerate industrialization, aiming to double the manufacturing value-added percentage of GDP by 2030. A collaborative approach involving various stakeholders is essential to realizing Uganda’s industrial potential and fostering inclusive economic development.
