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“All the trouble that befell the steel industry in this country was created by ourselves; government officers kept on buying the same products that are also made locally abroad and denying us market.”
Similar optimism is shared with other industry executives including Stuart Mwesigwa, the business manager at the Roofings Rolling Mills.
Mwesigwa says 2017 is likely to be better for businesses as the economy rebounds to its growth trend coupled with the government’s move to implements its policy on buying local products. Mwesigwa said the government’s decision to propose sourcing some raw materials especially for the on-going infrastructural projects including Karuma, Isimba dams, Entebbe and Jinja Express Highways, Expansion of Entebbe International Airport, and the Standard Gauge Railway locally will boost the steel industry.
“We hope that with the improvement in the economy and implementation of the local content strategy, then, we are likely to see improvement in our performance,” said Mwesigwa.
Bank of Uganda also is predicting that the economy will grow at 5% this financial year compared with 4.6% a year before driven by huge public investments.
Export markets sought
Still, Amos Nzeyi; the chairman of the Uganda Manufactures Association (UMA), says the government needs to establish an Export Guarantee Scheme to facilitate exports to South Sudan, Democratic Republic of Congo, and the Central African Republic to mitigate volatility which in turn hurts the entire economy.
Local export firms suffered huge losses when conflicts erupted in the neigbhouring export destinations of the Democratic Republic of Congo and South Sudan. South Sudan descended into conflict in 2013 following a power struggle between President Salvar Kiir and his former vice president Riek Machar, while eastern DRC continues to suffer sporadic attacks on civilians by various militias.
Slowed demand in these countries also contributed to the companied cutting production.
Statistics from the Uganda Manufactures Association shows the country’s overall industrial capacity utilization currently stands at 53%, signaling that majority of the firm’s production capacity lies idle, and exposing the challenges that the manufacturing sector is currently grappling with.
Nzeyi says this has been the trend in the past five years. He says the manufacturing sector declined from 11% growth in 2014/15, manufacturing to 4% in 2015/16. He blamed the declining performance to limited mainstreaming of local content, inability to manage the costs of converting raw materials to finished goods, and the absence of a robust export development strategy. He says all these need to be sorted out for the manufacturing sector to boom.
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editor@independent.co.ug
