Chinese help President’s push for more production

March 13, 2018 in Business, Companies, Investment by Editor

March 13—President Yoweri Museveni has said setting up industrial parks across the country is aimed at shifting Uganda away from mainly a consumption economy to one of producing manufactured goods.

“It is a mistake for Uganda to remain in retail business in places like Mbale, Soroti to sell imported merchandise. These industrial parks are big towns for the manufacturing sector that will boost job opportunities,” he said.

The President was speaking recently at the ground-breaking ceremony for the construction of the $600 million (about UGX2.1 trillion) Sino–Uganda Mbale Industrial Park in Mbale Municipality along the Tirinyi -Mbale highway in eastern Uganda.

China is showing no signs of giving up its top spot as Uganda’s leading source of foreign direct investment (FDI). According to a 2017 policy note by David Dollar, Akura Mugyenyi and Nicole Ntungire, it is imperative that commodity-based exporters like Uganda do more to deepen their involvement in Global Value Chains (GVCs) and develop higher-value-added activities in manufacturing and services.

The facility is being built as a government enabling infrastructure project with support of about 50 Chinese business interests. These include Lan Xin Glass Company Limited with an annual output of 50,000 tons of glass products; Great Wall Juice Group Limited; China Electronics Corporation Limited that has an annual output of 120,000 intelligent multi media electronics; Pau Way Energy Technical Company Limited with annual output of 15,000 diesel generator sets; Uganda Plastic Products Limited and North Auto Mobile Group Limited that is capable of making  30,000 pickup trucks.

Museveni reminded people who had yet to vacate the land for construction to begin, to move away because they had been duly compensated. “Allow this project to take off soon. Investors come to Uganda ,because they know how Uganda is endowed with natural resources that are still under-exploited,” he said.

The 2.5 square kilometre facility is expected to be completed in five years and will have capacity to create 15,000 new jobs. Many of the products are destined for the regional market of East Africa, nearly 200 million people.

The President assured other investors that they should not worry about taxes, saying that they will be granted 10 year tax holidays. He said the NRM government’s plan  to develop industrial parks will enable Uganda to compete more favourably in the exports of goods.

Finance minister, Matia Kasaija, highlighted Museveni’s consistent thoughts on more industrialisation as a positive trend for Uganda while Paul Zhang, the Chairman of the Sino-Uganda industrial Park and Tian-Tang Group, disclosed that in the future, schools and hospitals will be built in industrial cities in Uganda.