Buy Uganda could be hard sell to consumers

June 15, 2017 in Business, Opinion, Policy by Editor

June 15—Thirty years ago, businessman, James Mulwana, started a crusade to get Bic biro pens out of government offices and replace them with his Nice brand. Truth be told, the first versions of his pens did not look that nice.

Under these circumstances, taking on the French manufacturer was deemed rather foolhardy. Bic was and remains the byword for writing implements around the world, but this did not deter James Mulwana.

Mulwana was passionate about his cause. He was probably the first truly ‘Made in Uganda’ proponent and not shy about it.  No journalist could interview him unless they wielded a Nice pen and he was generous to a fault in dishing out whole boxes whenever the opportunity arose.

Mulwana was also an avid observer. He quickly caught on to the fact that pricing could tip matters in his favour. It also helped that the quality and styling of his biros has improved over the years and by the time of his passing in January 2013, Bic was no longer the sure deal in Uganda as it used to be. Many of us are truly Nice people now.

In 2014, the Ministry of Trade, Industry and Cooperatives published the Buy Uganda Build Uganda (BUBU) policy. It essentially wants to mirror the Mulwana experience on a wider scale, but with the full backing of the government.

In March of this year, Prime Minister Dr. Ruhakana Rugunda officially launched BUBU with much fanfare. He rehashed the favourite argument that buying local will create more employment and help deepen and widen the tax base.

This is all true. But BUBU can also encourage inefficiency through complacency on the part of local companies due to guaranteed sales. In addition it can distort prices because competition will suffer. Nor do we want a setting where 70% or 80% of the basic inputs to make a locally manufactured good have to be imported from abroad.

High production costs continue to punish local manufacturing and industry preventing them from being competitive. Appeals over the issue to the government and especially electricity bills, are unlikely to end for the foreseeable future. The government continues to reassure industrialists all efforts are being made to complete new power projects, but lowering taxes is tricky. Uganda’s tax base remains thin and narrow leaving business as an easy target.

On the bright side, the trade ministry anticipates the policy will improve the local business environment. BUBU would mean interventions being made in areas such as public procurement preference schemes; promoting the use and conformity to standards; enhancing the capacity of SMEs in meeting supermarket supply-chain requirements; and assisting private sector in the development of the ‘Proudly Uganda’ brand.

The Uganda Manufacturers Association (UMA), of which Mulwana was once a longtime chairman, has embraced BUBU. Anything that will help generate sales is welcome. In financial year 2016/17, the economy slowed to below 4%. UMA is of the view rising private consumption through BUBU and local content policies will drive growth.

At the risk of spoiling the party, what few people are talking about, is consumer choice unless that is going to be done away with more legislation? Uganda is a liberalized economy and there are things you just cannot guarantee.

The government can influence public procurement by simply issuing directives. You cannot do the same for the ordinary consumer. The days of the command economy have gone. That used to mean buying what the government made available and choice was an unheard of luxury.

These days, as long as you can afford too, you can buy what you wish which is where BUBU might falter due to a host of personal prejudices. The Chinese have made a huge impression on consumerism in Uganda, particularly in making available many useful and relatively cheap items. Can local manufacturers match up?

There is a bit of an egg and chicken situation here. Local manufacturers need a surge in demand to gain the scale that could help bring prices down. But the surge cannot come unless consumers are comfortable with both quality and price. The only institution that can trigger an impact is the government. It has to come up with big symbolic orders, say like printing several hundred thousand copies of the budget speech for free distribution across the country. Nasser Road would be thrilled.

But even if the government remains the biggest single buyer, it cannot sustain this, bearing in mind its own dodgy record for paying suppliers on time. It is ordinary people who need convincing by domestic companies.

Local manufacturing and industry has been repeatedly reminded of the power of advertising. Of selling your brand to create a public awareness that eventually leads to brand loyalty. Internationally, Coca Cola have never forgotten it. Some local firms have taken up the advice and seen success, notably in the cosmetic industry, while others insist it’s not worth the money.

Clearly without a full-blown marketing campaign, BUBU will fail to pick up momentum. Such well-meaning campaigns have a way drifting off into clouds of self-interest and the message disappears altogether. Unfortunately, the trade ministry is strapped for cash once again in the next financial year.  That means UMA must chip in. Mulwana did his own marketing before turning to other media like television and print.

Admittedly, the chemicals that go into making the Nice biros are still shipped in from abroad. But Mulwana’s conviction was making sure putting everything together was done here in Uganda rather than import a finished item. Too a large extent, it was Mulwana’s quiet dignity and obvious passion for his brand that helped sell his ballpoints. That’s what BUBU needs to help influence consumer choice– more passion please.