The Year 2020 will present some good prospects for Buy Uganda Build Uganda (BUBU) but challenges impeding full implementation of the policy will persist.
BUBU is aimed at marketing Uganda products. If made in Uganda products are bought and hence demand grows it will cause expansion of manufacturing plants and also save the country foreign exchange. The result would be industrial growth, a rise in taxes and employment. So, the policy is a game-changer for Uganda, if it is fully implemented.
In 2022, the oil and gas sector will most likely begin buying some locally produced items ranging from food to basic available materials. But also it will, as it has been recently, create a good amount of technical capacity building in the country. In this regard, several Ugandans will acquire skills.
Besides, creating new jobs and there will also be new demand for various existing services in Uganda.
As progress towards the production date in a couple of years continues, there is hope that the oil and gas sector will create new demands for the local steel industry and specialised services including welding and driving.
There is proof that Uganda can manufacture quality products and also swiftly respond to the rise in demand with matching supply. In 2020 the country was hit by COVID-19 amidst a worldwide shortage of Personal Protection Equipment (PPE) including gloves, masks and sanitisers. Uganda manufacturers responded in a span of a few weeks and built local manufacturing capacity. Soon they were producing PPEs such as sanitiser and others for the local and export market in neighbouring countries.
From this response, Uganda manufactures potential is not in doubt. It is resilient. The question is will the Ugandan Government protect the local manufacturing industry from imported products so that a market to attain the aims of BUBU is created.
In 2022 it will be the local manufactures’ wish that the local content law be amended. There are signs that the amendment is likely. But there will be a need to initiate a stockholders’ dialogue to get views of various sectors before amending and enacting the law.
Uganda is not alone in promoting the consumption of locally manufactured goods. It is a worldwide trend as many countries appreciate the importance of localisation. Another issue is the COVID-19 pandemic, which has further strengthened the move to localisation of key strategic products for every country. This is because countries that depend on imports and thus their industrial sectors stunted, faced huge challenges when countries on which they depend for goods and services went into lockdown after the closure of road, sea and air links. Consequently, this made a strong case for local industries.
BUBU essentially involves stakeholders such as Government, Ministries, Departments Agencies (MDAs), private sector, consumers and society in general. For it to succeed there will be a need to amend the policy especially the definition of the BUBU suppliers.
It would make sense if the suppliers were defined as where the goods are manufactured from and not who is supplying them. Today it is common for MDAs to insure local purchasing orders (LPOs) to many locally registered companies and claim compliance with BUBU policy. But in reality, some locally registered companies may be importing 100% of their products, which contradicts BUBU policy.
In 2022, Government in consultation with local manufacturers will likely identify and list products, which should not be imported in case the right quality of such goods and services are available in Uganda, in sufficient quantity. This will boost the local manufacturing capacity resulting in increased taxes and employment.
There will also be a need for another list of products for which production capacity can be built among Ugandan manufactures in a period of say 18-24 months. Once such products are produced in Uganda, importation should be banned, meaning MDA’s would stop importing those goods and buy Ugandan manufactured ones.
Besides, the importation ban can be achieved through tariff and non-tariff barriers. Today, we are seeing some locally produced items like tiles meeting local demands and also exported to neighbouring countries. Manufacturers of such items can set up plants in Uganda if there are guarantees that their products will be protected from imports. Investors would only get interested in investing in Uganda if they get protection against imports. If this happens it will help BUBU and in return contribute to the capacity building of the country
Several other initiatives for the success of BUBU will depend on strengthening laws. The Public Procurement and Disposal of Public Assets Authority law (PPDA) also needs amendment making it mandatory for every international bidder to have one local representative or business partner. This will help in building the capacity of the country.
Many times, MDAs import products instead of buying locally, under the pretext of security concerns. This applies to products like ballot papers, tax stamps and such others, which means local manufacturers are not trusted. But outsiders are trusted. From experience, MDAs don’t attempt to ensure all security aspects are taken care of so that goods and services are produced in Uganda. In 2022, due to the need to promote industrialisation and also campaign by local manufactures, there will be some confidence building to facilitate BUBU.
FDI
It is a fact BUBU can attract or bring Foreign Direct Investment (FDI). This is further enhanced by stability in Uganda and access to the regional market. Once investors locate their manufacturing plants in Uganda it will contribute to building capacity, reduction in importations and rise in locally manufactured goods. In 2022, this will gradually begin mostly around the oil and gas sectors but also this nascent business will draw others to follow and present an opportunity for Government to push BUBU further.
To attract more FDIs the ease of doing business in Uganda must be addressed. Fortunately, the Government has over the year been working on this and there is no doubt that it will remain on the agenda in 2022.
Some tough measures need to be fully considered and implemented like banning the exports of raw materials. If done it will force investors to set up value-addition units in Uganda and boost manufacturing and improve BUBU prospects.
Also, certain jobs should be reserved for indigenous Ugandans as part of BUBU. There will be some aspects of this in oil and gas under the local content provisions.
Excuses Given by the Government
Lack of trust is among some of the excuses being used by governmental entities for not embracing BUBU. A good example is ballot papers that are given to outsiders yet the country has local printers with the capacity to handle the job. Local printers will in 2022 see if they will be trusted so that they train workers and create an environment where risks are mitigated so that by the next election they the printing of election materials is done locally.
Before the 2021 polls, New Vision reported that President Yoweri Museveni had directed the printing of ballot papers, banknotes and high-security material to be done locally. This was a very welcome initiative but it never materialized to the disappointment of the local printers. But it is least it exuded the Presidents will in promoting BUBU.
Local printers can print academic transcripts, certificates and result slips for Uganda National Examination Board (UNEB) and universities but foreign printers/ suppliers have wrongly convinced MDAs to keep on some security features. They aim to keep local suppliers out of the race for printing tenders. They argue that they can include security features but these can be done by some printers in Uganda who have acquired modern equipment.
Another excuse is that local products are highly-priced. Nevertheless, the Government needs to support BUBU, even if local products’ prices are still a bit high. At the end of the day, it is the bigger picture of the Ugandan economy that matters.
Quality and capacity are yet another excuse government entities give for not procuring from local manufacturers. However, if Government, purchase locally, then these manufacturers will develop the capacity if it is lacking.
Role of Consumers
The biggest stakeholder in the success of BUBU is the consumer. It is the consumer at the end who will decide on what they want to consume.
Every year, most local manufacturers improve their capacity and quality. Given that the talk of BUBU is going on they will be expectant of some good developments in 2022. But there is a need to change the consumers’ mindset so that they consume Ugandan made products and consequently support BUBU.
Quality, taste and price are some of the issues that could be a challenge for the consumers in the initial period, but once quality, taste and price of locally manufactured goods improve demand for them will grow.
BUBU can take root instantly, Government will have to invest in promoting through civic education programmes. This alongside other measures like stopping importations could see BUBU turn into a success.
The private sectors will also need to be educated and motivated to consume locally produced raw materials and consumables. There is no effort demonstrating how buying locally is more or less a Community Social Responsibility activity. It also takes leaders in the community to promote BUBU. If they are publicly seen buying locally made goods and services they will be emulated by other consumers.
Benefits of BUBU
BUBU will increase the revenue collection of Uganda. It is going to save the country foreign exchange and will also earn foreign exchange when local goods are exported. It will create jobs for Ugandans and thus build capacity for the country. All this, will in turn support the development of the Uganda and Ugandan people.
The writer is the General Manager of Graphic Systems.