Imported oranges in supermarkets, where are local producers?

Tuesday April 21 2015

Oranges imported from South Africa at a

Oranges imported from South Africa at a supermarket outlet in downtown Kampala. Ministry of Trade wants supermarkets to dedicate 40 per cent shelf space to locally made products. File photo 

By Paul Tajuba & stephen Kafeero

It is 10 in the morning and I have already sampled four supermarkets in uptown Kampala out of a targeted 12. My assignment on this particularly chilly morning is to make sense of why Uganda-made products have had a low traction in Kampala’s supermarkets and grocery stores. My target is not narrowed to any particular supermarket or grocery store but it is limited to large stores that are synonymous with big visitor numbers. First forward, it is now at the tail end of the day and I am almost done with my research, albeit with intriguing results.

One question that has been a constant since morning is why supermarkets import petty items including oranges, vegetables and toothpicks, given the abundant resources and good climate here. For instance, at a Shoprite outlet in Lugogo, I am shocked to learn the store imports oranges from South Africa. More intriguing though, is how the oranges (from across) are sold at almost the same price with those sourced from either Kenya or within (Uganda). A pack from South Africa goes for Shs75,000 compared to one from here which sells at Shs64,000.Such imports are not alien to Shoprite, but it’s a relayed routine in almost all supermarkets and grocery stores – not considering ownership
(foreign or local). It is estimated that more than 50 per cent of Uganda’s supermarket stocks are composed of imported items from neighbouring Kenya, South Africa or China. This is not good for the country’s growth pattern, given that Uganda’s import bill far outweighs the export potential with the latter growing annually.

For instance, according to Bank of Uganda, the country in 2014, imported goods worth Shs2.2 trillion compared to Shs1.3 trillion worthof exports.

The context However, one might wonder how we have arrived here given that government has been heavily spending in terms of building local capacity as well as promoting industrialisation. Whereas to some it appears to be a lack of interest by government to promote local capacity, Gideon Badagawa, the Private Sector Foundation Uganda (PSFU) executive director, thinks otherwise. “The private sector has not offered quality,” Badagawa says, adding “customers prefer imported goods as opposed to local ones.” Nevertheless Badagawa is quick to add that government has not fully supported entrepreneurship, especially in terms of creating policies that can support local entrepreneurs. “Otherwise how would you explain the fact that foreign investors are given free land and tax waivers but the same cannot happen for local ones?” he wonders. But ultimately Badagawa squarely blames the private sector for failing even where they ought to have excelled. “A number of private entrepreneurs have either failed to meet required standards or to a large extent cannot be relied on when it comes to sustained supply demands,” he says.

But what do supermarkets say about the claims? Badagawa’s claims are not in isolation but are echoed by supermarket owners who say many local suppliers havefailed the quality test or do not have capacity to supply products year in, year out.

According to Vincent Kimuya, the Nakumatt Oasis branch manager, customer demands inform “what kind of products we buy both on the local and import market, not forgetting quality of the products also matters.” However, when asked why they import simple items such as fruits and vegetables, Kimuya says Kampala is a cosmopolitan city with a lot of different people “so to satisfy the market, we stock a variety of products”.

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But how true are claims that government has not protected local entrepreneurs? Although he blames local entrepreneurs for failing to cease the opportunity, Badagawa reasons that government’s investment policies have not protected local producers due to poor implementation or poor policy formulation.

Government, through different departments, has since 2007 been building a number of policies with a view of promoting local entrepreneurship. For instance in 2007, government formulated the National Trade Policy that sought to encourage the use of local technologies and raw materials.

The policy seeks to develop national technological capabilities through encouraging local industries and new investment opportunities. In 2008, government formulated another policy - National Industrial Policy with the view of developing domestic resources and boosting local potential. Similarly, the National Textile Policy, which sets policy interventions to connect the use of local resources for industrialisation and employment creation, was created in 2009. The policy sought to improve sector linkages that would be exploited so that Ugandans can benefit from textile imports. Policies seem to have failed However, most of these policies including National Sugar Policy (NSP), National Standards and Quality Policy, Development Strategic and Investment Policy and the Buy Uganda Build Uganda policy seem not to have assisted local producers since they have not been well implemented or supported. For instance, the Buy Uganda Build Uganda policy driven through PSFU, is more of an advocacy policy since little or no contribution has been offered towards its implementation.

Analysts also blame government for having wholesomely privatised the textile sector, which affected industries such as Nytil Textile Industries.

Nytil Textile Industries was in March 1996 sold to Picfare Industries. However, since its divestiture the company has not had much impact in terms of improving Uganda’s textile industry.

What consumers say

Jimmy Biraro, a resident of Zzana, Kampala, who regularly shops in supermarkets, is limited when it comes to choice of what he buys. “Most of the items I use, I buy them from supermarkets and you hardly find good Ugandan products there,” he says. Similarly, Prossy Nalwada, a Makerere University student associates imports with quality and local products with low substandard. However, unlike Biraro, Nalwada shops from downtown Kampala including Owino Market where she buys most of her clothes. Owino Market (St Balikudembe) mostly sells second-hand clothes and is Kampala’s largest used clothes market. Asked why she buys used clothes instead of new ones manufactured here, Nalwada says: “They are second hand but they look nice and unique.” Just like Nalwada, much of Uganda associates imports with quality but are equally concerned of the increasing rate of dumping, especially from China.

Numbers
2.2 trillion
The total worth of goods in shillings that Ugandans imported into
the country in 2014.

1.3 trillion
The total worth of goods in shillings that Ugandans exported in 2014.

editorial@ug.nationmedia.com

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