Could Uganda be the next hub of automotive manufacturing?

President Yoweri Kaguta Museveni has banned the importation of buses into the country to promote value addition in the nascent automotive industry.

President Museveni  made the directive while marking the country’s 58 years of independence at State House, Entebbe last week.

The directive taken with Kiira Motors Corporation (KMC) in mind, which was established to champion value addition in the domestic automotive Industry, is expected to feed the sub sector with the Kayoola Solar Bus, a concept representing the next generation of public transport for cities within the region. 

 According to the President, the directive putting government officials on notice has already been communicated in writing specifically to those charged with dispensing this responsibility.

However, analysts and private sector players believe President Museveni’s directive should be enforced cautiously to avoid haphazard results. 

The short duration to implement the President’s notice also emerged as an issue of contention as most industry players say this was arrived at without consultations. They are calling for fairness and prudent judgment.

“We don’t take this directive lightly,” the senior marketing specialist, the official distributor of Isuzu vehicles in Uganda, Mac East Africa, Ms Camilla Mindru, said when contacted.

She continued: “We hope whatever strategy will be implemented will be fair and beneficial to all stakeholders in the industry.”

Capacity issues

Uganda’s automotive market is largely focused on retail and distribution of vehicles, and after-sales support in servicing and spare parts sales.

Therefore, the involvement of KMC in the industry with its several projects, including the Kayoola Solar Bus concept, is commendable. However, the fruits of KMC are yet to be harvested.

For 10 years, the projects by KMC, culminating into the President’s directive, are yet to manifest into large, commercial scale to merit what some sector players describe as “a blanket ban on importation without due stakeholder consultations.”

Sector players want to be part of this journey. They hope government will tap into synergies that will result into achieving the agenda of developing the country into a strong automotive manufacturing hub in the region.   

“KMC projects are a long term concept and for that, industry players shouldn’t be frustrated but afforded fair opportunity to play their part,” the Secretary General of United Bus Owners Association, Mr Robert Mutebi, says.

He further says: “Some of our members have made fresh orders and other have just reinvested into the business. Before they know it, they are hit by news that sends their investment into the drain. We all love what is happening at KMC but is not ready to hit the ground running. There are still capacity issues that they need to sort out.”

He argues that protectionism tendency that is based on misinformation can be destructive, saying that is not exactly what the industry need right now. He was also of the view that KMC manufactured buses still have some way to go, fearing that the President is being fed with misinformation regarding the progress being made by the industry player who has real potential to transform the automotive sub sector once everything ticks the box and good to go.  

For the meantime, Mr Mutebi, is calling for consultation on the matter before the enforcement is instituted.

As for the executive director of Private Sector Foundation, the directive is a very good idea with clear intentions. But it must be carefully planned out as a country if the benefits are to be accrued.

In an interview with the deputy executive director of Kampala Capital City Authority, David Luyimbazi, Kampala city will benefit from the services of the buses, describing them as long overdue.

He said: “As long as we have the capacity to manufacture and assemble buses, then what is the problem? Protectionism is good because it aidS the growth of nascent industries. All major economies did that. President’s directive will result into jobs, lower costs of fares/transport and good for the city. The buses are also more affordable for the majority of the population.”

More support

As Kampala awaits the change of the mode of public transport from small carriers to bigger carriers as per the presidential directive, private players, particularly Tondeka Metro Company has applauded the presidential ban on importation of buses into the country, saying “it is the right thing to do.”

According to the Tondeka’s chief executive, Mr Dennis Kibukamusoke, the Presidential directive is a welcome move as Tondeka was already considering working with local manufacturers in its second phase of implementation to actualise the country’s much-sought after value addition agenda in automotive industry.

“The directive of the President is not new because he had already directed Tondeka to only import the initial 980 buses and work out a mechanism to work with local manufacturers in the subsequent batches as the Greater Kampala Metropolitan Area needs more than 3,000 buses, Mr Kibukamusoke said in a statement. 

Financing gaps

Mr Kibukamusoke argues that government must finance the nascent manufacturing industry to meet international standards.

Mr Kibukamusoke reaffirmed Tondeka’s commitment to have the buses in Kampala within the first quarter of next year, adding that the manufacturers had already started on the manufacturing process of the 980 units.

Bus owners

Long-term

 KMC projects are a long term concept and for that, industry players shouldn’t be frustrated but afforded fair opportunity to play their part,” the Secretary General of United Bus Owners Association, Mr Robert Mutebi, says.