Ugandans spent Shs335b on importing cosmetics

Tuesday May 12 2020
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Growing imports: Whereas there has been growth in local cosmetics manufacturing, imports continue to grow taking away a large chunk of Uganda’s foreign exchange. FILE PHOTO

Ugandans spent at least Shs335b ($88m) on importation of cosmetics, make-up and perfumes, according to a Finance Ministry report .
According to the report, which covers the period between January and December 2019, Uganda spent hugely on beauty products categoriesed as essential oils, resinoids, perfumery and cosmetics or toiletries.

Under this category, according to the report seen by Daily Monitor, mixtures of odoriferous substances used as raw materials, took up the biggest share of the import bill with products worth Shs57b ($15m) imported into the country in the period.
This was followed by oral dental hygiene (denture fixative) products, which cost Shs53b ($14m).

During the period, the report indicates, Shs45.6b ($12m) was spent on importation of beauty products, make-up, and skin-care and manicure preparation products.
Other notable, imports under this category, the report notes, included shaving preparations and personal deodorants, which cost Ugandans a total of Shs11.4b ($3m).
Preparation products used on hair and essential oils were also notable imports, taking up about Shs11.4b ($3m) of the import bill.
The report, which analyses about 1,500 imports, indicates that Uganda imported goods worth Shs28.5 trillion during the period from January to December 2019.
Manufacturing of cosmetics and related products has been growing locally but consumers continue to use imported products due to quality issues and inadequate production.

Uganda is a net importer with much of the country’s imports sourced from Asia and the Middle East, especially China, United Arab Emirates and lately Vietnam.
Government has been putting in place measures such as Buy Uganda Build Uganda, among others as channels that seek to shift to import substitution.
However, this has not been successful over the years as the country continues to record growth in imports.
However, the emergency of Covid-19 has created an urgent desire to improve local capacity in order to drive import substitution.
Dr Maggie Kigozi, a director at Crown Beverages and an investment expert, said that while Uganda was still importing a number of goods in the cosmetics category, the narrative has been changing.

“When we were growing up, importing these products was the only solution because local capacity was low. But this narrative is changing as more companies get into producing good organic and natural products,” she said. However, she said, local companies such as Movit, among others must be supported to produce massively if the country is to cut back on imports.
She also challenged local manufacturers to start producing products such as lipstick and deodorants that have been dominating the import bill for a long time.
“If these products are made locally, the country will save the import bill, factories will create jobs and then revenues will increase,” Dr Kigozi said.

Import substitution impacted by cost of doing business
According to Mr Shaban Sserunkuuma, a consumer protection activist working with Consumer Education Trust, whereas the cosmetics and related products imported into the country are global brands, they can be manufactured here.
“This is abnormal and requires meticulous planning,” he said. However, he notes it has been difficult for genuine investors and business people to set up import substitution industries in Uganda because of the high cost of doing business across the value chain.

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For instance, he says, imported products such as lipstick would cost much less than the ones manufactured locally.
“A Chinese firm making two million units of perfume, lipstick, lotion or cologne could afford to sell its products cheaply than one that produces about 200,000 units locally,” he said.

dnakaeesi@ug.nationmedia.com

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