KAMPALA, UGANDA –Uganda Manufacturers Association (UMA) and Private Sector Foundation Uganda (PSFU) have unveiled groundbreaking studies on capacity utilization and cost drivers in the manufacturing sector. The studies, conducted in collaboration with the Uganda Small Scale Industries Association (USSIA), aim to drive economic growth and development in Uganda.
The manufacturing sector is a vital component of Uganda’s economy, contributing 27.6% to the GDP and employing over 1.8 million people. “We are proud to be a part of this growth story,” said Deo JB Kayemba, Chairman of UMA.
The two studies, aligned with UMA’s strategic plan 2020-2025, focus on member relevance, policy influence, and advocacy. They provide crucial evidence-based research to inform policy decisions and empower the private sector to prepare and execute business plans with precision.
“We believe that this partnership between the government, private sector, and academia is essential in driving economic growth and development,” emphasized Kayemba. UMA’s membership has grown significantly from 26 in 1988 to over 1800 today, making it a proud partner in the country’s growth story.
The studies sought to establish the actual capacity utilization and investigate its causes for manufacturing firms in Uganda, establish the main drivers of costs in the production process, identify and suggest key policy interventions to address these challenges.
The findings revealed that the capacity utilization of firms is at 54.4%, with lack of effective demand for manufactured products being the main reason.
“Ineffective local demand, cost of raw materials, high competition from imports and electricity are some of the significant cost drivers,” said Ms. Sarah Kagingo, Vice Chairperson of the PSFU Board of Directors.
Kagingo outlined PSFU’s proposals to address these challenges, including the establishment of a Competition Commission, fast-traciinh the issuance of Local Content regulations, and strengthening dispute resolution mechanisms within the East African Community.
She urged government and stakeholders to use the findings to inform policy formulation and the National Development Plan IV, highlighting the readiness of the private sector to engage further in implementing the recommendations.
PSFU has developed position papers with proposals to stimulate effective demand and reduce the cost of doing business.
The studies were supported by Mastercard Foundation which partnered with PSFU on the Young Africa Works – Enhancing Lead Firm Structure for Youth Employment Program, which aims to create 285,000 sustainable work opportunities for young people through, among others, strengthening the capacity of the private sector to efficiently produce and sell their products in expanded markets.
The dissemination of the reports will be conducted through various approaches, including high-level meetings, media interviews, and wider circulation of the reports to government and relevant stakeholders. The workshop presented an opportunity for proactive decision-making, a win-win scenario for the government and the manufacturing sector.
