Uganda spends Shs3 trillion on textile imports annually

Wednesday June 01 2016
fin001 pix

Southern Range Nyanza (NYTIL) employees at work in the factory. Local industry players have welcomed the President’s directive for government institutions to buy Ugandan-made products. PHOTO BY STEPHEN WANDERA

PARLIAMENT. Ugandans are spending $888 million (Shs2.991 trillion) on annual textile imports, President Museveni has said.
This is money Uganda could have saved since there are textile factories operating in the country.
Ugandans also spend Shs568.7 million on second hand vehicles, Mr Museveni said during the State-of-the-Nation address on Tuesday in Kampala.

The amount Ugandans spend annually on just these two items could meet 86.19 per cent of the costs of constructing the 600Megawatt Karuma Hydro Power Plant.
Besides textiles, Uganda also spends a lot of money on fruit imports - $20.2 million (Shs68 billion) – and leather goods ($0.22 million – Shs741.180 million).
Mr Museveni, however, said many of the imports can be manufactured in Uganda.
“All these can be made here; fortunately, the investors are here,” he said, adding, “They just need a good atmosphere for investment.”

That atmosphere, Mr Museveni said, means cheap electricity, which should not be more than $0.05 (Shs168.45) per unit.
The President directed government institutions, without exception, to buy Ugandan-made products “provided they are of good quality and comparable prices”.
“That, however, should not be an excuse for continuing to import what can be made here. If the quality is not yet perfect, discuss with the manufacturers how that can be improved.
“All the uniforms for the army, the police, the prisons service, the Uganda Wildlife Authority and medical services must be bought locally,” Mr Museveni said.

Industry reaction
Experts in the industry say the President’s directive on buying local-produced products will give a competitive advantage to local factories.
Southern Range Nyanza (NYTIL) director corporate affairs Richard Mubiru expressed gratitude that government is showing commitment to revive the textile sector in Uganda.
He said: “As a company, NYTIL has overtime grown her capacity to produce a range of uniforms, garments and other fabrics that can support local clothes manufacturing.”

He however, called on government to address the need to reduce cost of capital-through Uganda Development capitalisation.
At the moment, most garment factories produce largely school uniforms. They include: School Outfitters, Lakai Uniforms, Phenix Logistics, Kwera Garments, Christex Designs, Chrisma Designs, and Unique Garments, among others.
A 2007 dissertation by graduate student Rebecca Tusubira noted that Uganda’s textile industry got attention out of the African Growth Opportunities Act (Agoa) through which developing countries like Uganda export select items to export to the United States duty free.

Background
A 2009 World Bank paper states that during the 1960s, Uganda was sub -Saharan Africa’s largest cotton producer.
The paper adds that political instability and poor policy choices of the 1970s led the sector to its demise. Attempts to revive the sector with lending operations during the 1980s failed, but policy reforms combined with a lending operation and the high cotton prices of the 1990s revitalised the sector.
According to the 2013/2014 ministry of Agriculture sector performance report Uganda earned $24.7m (Shs83.2 billion) from cotton in FY 2013/14 – the most recent year for which such data is readily available.
This was a drop from $27.7m (Shs93.3 billion) in FY2012/13.
Officials blamed a long dry spell and low soil fertility for the drop.

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