Local producers of furniture will get a boost following the government’s decision to ban importation of furniture for government offices and institutions. This financial year alone, several government agencies are expected to spend at least Shs30b on buying furniture, with additional billions put aside for repairs and other related needs.
Some of the big spenders on furniture include Parliament, with a furniture budget of Shs2.5b, used for buying assorted office furniture for MPs currently occupying Queens Chamber, a wing on the Parliament Building.
Others set to spend big on furniture this year are Education ministry (Shs1.8b); Uganda National Roads Authority (Shs1.8b), National Identification and Registration Authority (Shs1.2b); Judiciary (Shs1b); Energy (Shs1b) and Uganda National Bureau of Standards (Shs1b).
The Shs30b spent on furniture for public offices in a year is significant. For instance, going by the Uganda National Roads Authority’s valuation that constructing a kilometer of tarmac road costs Shs1 billion, Shs30b would fix 30kms of road, or the distance from Kampala to Bombo.
The concern, raised by President Museveni and communicated to accounting officers of government by Mr Keith Muhakanizi, the permanent secretary of the Ministry of Finance and Secretary to the Treasury, is that a significant portion of the money meant for furniture for government offices is spent on imported furniture.
This is against the spirit of Buy Uganda Build Uganda (BUBU), an initiative that the government and other entities are pushing to ensure that Ugandans consume locally made goods to bolster local enterprises.
In his inaugural speech at the steps of Parliament in 1986, Mr Museveni wondered why past leaders were importing expensive furniture when Uganda was not manufacturing even a safety pin.
But nearly 32 years later, Mr Muhakanizi, in a letter dated July 1, told all accounting officers, heads of state enterprises and heads of public corporations that the President has directed that all government institutions should buy their furniture from local manufacturers.
“Public sector procurement is one of the key tools that government can utilise to support direct and/or indirectly our domestic industry and overall national economy,” Mr Muhakanizi said in the letter.
He added: “In a bid to achieve government of Uganda policy intents like BUBU and develop Uganda’s local industry, there is urgent need for all government institutions to support through procuring all their furniture requirements from local manufacturers.”
Mr Muhakanizi instructed all government ministries, departments and agencies to procure all furniture from national or resident providers engaged in the manufacturing process. He also instructed Mr Benson Turamye, the executive director of the Public Procurement and Disposal of Public Assets Authority (PPDA), to monitor compliance and ensure that “all procurement and disposal entities comply with the directive.”
To implement the directive, Mr Turamye said PPDA will develop guidelines based on a study they are currently doing with the help of the World Bank. The guidelines, Mr Turamye said, will spell out which furniture may not be imported and what to do in case a certain type of furniture is not produced locally.
In the pursuit of the policy of BUBU, President Museveni also, on October 28, 2018, spoke against import bonds for products that are locally produced in Uganda.
“There should be no bonded warehouse for sugar or any other product that we have produced in abundance in Uganda. The practice of bonding such products is due to corruption,” Mr Museveni told a team from Uganda Manufacturers Association (UMA). He had also threatened to sack government officials who ignore local products in preference to those from abroad.
Mr Muhakani’s letter comes almost two months after President Museveni directed all government departments and agencies, including State House, to buy furniture made by the Uganda Prisons.
However, accounting officers who spoke to Sunday Monitor have cited structural challenges facing the planned import substitution.
Prof Waswa Balunywa, the Principal of Makerere University Business School (MUBS), and others accounting officers have wondered how the directive on imported furniture would work without a clear government plan to fix quality concerns in the supply chain, availability of local furniture and slackness of some Ugandans.
“Banning importation of furniture is a good thing but also a bad thing. For instance, at Mubs, we are trying to buy furniture for our library but when you go around, it’s not easy to get high quality and long-lasting furniture. We are trying to encourage local production but who are the local producers?” Prof Balunywa asked
He added: “You may find that foreign companies will position themselves to manufacture furniture.
They will create jobs but we will end up with the same problem we have where we keep accusing foreigners of owning each industry - these are two evils I don’t know which one is greater - to import or to produce locally and then take away the profits? The net effect may be the same.”
He added that such situations of import substitution work through introducing higher taxes on targeted products so that people can continue to import, although they should be able to pay a very high price for it.
Prof Balunywa continued: “For instance, what are our needs as universities or as public offices? Can they be manufactured locally, can they satisfy the demand? We must plan for it, we shouldn’t simply wake up and say we have banned this.”
Lack of local capacity to supply in bulk aside, the other challenge raised by another accounting officer from Justice, Law and Order Sector is what she called “lack of a serious local company where one can go and confidently place an order for locally made furniture.”
The source added: “Some of those people (the local manufacturers) are not even registered. How do you expect us to buy furniture without going through the bidding process? For them, they work with direct orders, and any attempts to bypass the procurement process, will attract queries from the Auditor General. Our local producers don’t have capacity to bid for serious government contracts,” she said.
But as a way forward, Prof Balunywa has advised Mr Muhakanizi and the architects of BUBU to allow a grace period for government to identify the companies that want to produce furniture and should be guided and supported financially to build capacity and also guided on quality assurance.
Usually, imported furniture, different officials said, includes leather sofas, meeting tables, and executive office back chairs from local importers of foreign manufactured furniture. In a number of cases, sources say, top government officials reject locally made products or even imported but used ones.
Expenditure on Furniture
Education and Sports Shs1.8b
Finance ministry Shs837.4m
Public Service Shs800m
Agriculture ministry Shs747m
Makerere University Shs467.3m
Uganda Bureau of Statistics Shs400m
Lands ministry Shs402m
Directorate of Public Prosecution Shs300m
Uganda Mgt Institute Shs300m
Local Government Shs210m
Office of the President Shs200m
State House Shs200m
Gulu University Shs200m
Immigration Control Shs295m
Judicial Service Commission Shs162.7m
Butabika Hospital Shs108.1m
Soroti Hospital Shs130m
Uganda Land Commission Shs130m
Soroti hospital Shs130m
Mbarara University Shs100m
Internal Affairs ministry Shs176m
Health ministry (headquarters) Shs95m
Trade and Industry Shs75m
Works and Transport Shs70m
Science and Technology Shs70m
Busitema University Shs117.8mm
Muni University Shs371.5m
Uganda Cancer Institute Shs100m
Uganda Tourism Board Shs75.3m
Road Fund Shs50m
Dairy Development Authority Shs53m
Rural Electrification Agency Shs87.9m
Equal Opportunities Commission hs87.9m
Public Service Commission Shs84.2m
Financial Intelligence Authority Shs80m
Education Service Commission Shs41m
Uganda Revenue Authority Shs50m
Health Service Commission Shs40m
LG Finance Commission Shs22.8m
Tanzania Mission Shs100m
Mission in Denmark Shs167m
Mission in Sudan Shs110m
Mission in Russia Shs157m
Mission in Bujumbura Shs300m
Embassy in Algiers Shs127m
Meteorological Authority Shs210m
Government Analytical Laboratory Shs200m
Soroti University Shs200m