the opportunities covid-19 presents to rejuvenate uganda’s

The Opportunities Covid-19 Presents to Rejuvenate Uganda’s Manufacturing Sector

Oscar Olaro

J U N E 2 0 2 0

UGANDA

Table of Contents



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Introduction 1

Covid19: Silver Linings for Uganda’s Manufacturing

Recommendations

The Industry Regulators

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13About the Author

Private sector

Manufacturers

Conclusion

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Expansion of distribution networksEmergence of alternatives and Import SubstitutionHope for MSMEs and Jua KaliA thriving Start-up EcosystemDiversification of manufacturing linesAvailability of Cheaper CreditAwareness of QualityIncreased Labour ProductivityBusiness Outsourcing

The ExecutiveIncreased government expenditure on public strategic sectorsImprove conditions for green manufacturing

Uganda Revenue Authority and promotion of presumptive tax regimeMinistry of Trade, Industry and Cooperatives: Industrialisation StrategiesMinistry of Finance, Planning and Economic Development -Stimulus packageElectricity Regulatory Authority Uganda National Bureau of Standards: Quality and Standards

Resource Efficient Cleaner ProductionE- commerce: Adapt or PerishHuman Capital DevelopmentDiversification and growth

Banking sub-sector

Introduction


The greatest test of our time is now; for a long time, we anticipated such times but we never thought it would come in this form. Humanity has been prepared for war and hunger but not a pandemic of this magnitude, even when H1N1 SARS, Bird Flu, Ebola and the recent ailments hit parts of the world; it was never anticipated that such an event would have devastating impacts like the novel coronavirus has done. The world can look back at the history of previous pandemics recorded, and most recent of them is 1918 Spanish Flu pandemic to borrow lessons. Then, 500million1 people got infected and 50million died from it. It was when the world was beginning to embrace manufacturing with production lines, small and medium enterprises were finding their space with the novel virus having infected one third of the world’s population. The 1918 pandemic saw an 18%2 reduction in manufacturing output as a result of virus control measures in the United States of America. However, never before has the world been as connected in fighting and combating a pandemic and its effects as it is today.

In a recent report3, the impact of the 1918 pandemic is studied to help predict the impact of Covid-19 on the economy. In the report, the authors draw a line based on how different states or regions reacted to the threat of the pandemic as a barome-ter for the different fortunes. It concluded that cities that implemented aggressive Non Pharmaceutical Interventions from lockdowns to social distancing never had manufacturing suffer as much from the impacts of the pandemic unlike those that slackened. The International Labour Organisation and UNIDO report4 estimated an increase in unemployment of 25million in 2020 with losses in labour income of up to US$3.4 trillion and yet the end of the impact is still uncertain. The various inter-ventions including lockdowns have seen about 2.7billion workers affected account-ing for 81% of the global labour force.

Due to the shrinking economies, the volume of trade has shrunk and factories have slashed employment starting with the non-essential staff and then the less produc-tive of them. Most factories will find unit costs of production untenable due to limit-ed sales especially as most consumers are undertaking austerity measures to keep afloat. Businesses that are not in production of essentials could go further to shut down temporarily or close altogether. Lean production will be adopted and prod-ucts will be positioned for a more targeted market, which would breed more research in product development.

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1https://www.biospace.com rticle/compare-1918-spanish-influenza-pandemic-versus-covid-19/ 2https://www.bloomberg.com/news/articles/2020-03-27/pandemic-shutdowns-actually-helped-economic-growth-in-1918-flu 3https://libertystreeteconomics.newyorkfed.org/2020/03/ fight-the-pandemic-save-the-economy-lessons-from-the-1918-flu.html

4https://www.unido.org/stories/coronavirus-economic-impact


In China, dubbed the world’s factory, manufacturing output went down from 6.5% in December to a slump of 13.5%5 in February 2020 (National Bureau of Statistics-Chi-na) and since most of Uganda’s imports come from China, we are likely to witness a reduction in output by local factories and traders. In the East African regional block, the most advanced economy, Kenya, did not immediately react to the threat of Covid-19 with drastic measures like lockdowns or restrictions to movement and business effected by 14th April 2020; even if it was a direct frontier country due to Nairobi being a regional aviation hub to all major destinations globally. Uganda which has made 33 declarations with the ultimate being the total national lockdown along with promotion of World Health Organisation guidelines, is an enviable achievement for a country that did not immediately take action. Early reaction to the threat has been successful and any delays have been very costly as witnessed in most African states and USA respectively. However, the world should brace its self for no less than 12months to get to some state of normalcy because social distanc-ing practice, one of the most effective ways to control the spread of the virus will go on for a while along with other Standard Operating Procedures 6.

On the 30th of March 2020, Uganda went into a 14-days’ lockdown where “stay home” directives were implemented and only “essential services” like medical, utili-ties, security and factories were allowed to operate under approved standard oper-ating procedures. On the 14th of April, this was extended7 further until 5th May 2020. In this period alone,Uganda’s exports declined from US$ 383.62 million in January 2020 to US$ 352.91 million in February 2020. Imports declined from US$ 711.99 million in January 2020 to 593.79million in March 2020. Also 4200 factories8 had been closed at 22nd April because of the pandemic and only 215 were in opera-tion under very strict Standard Operating Procedures by the Health Ministry.

With all those closures, several jobs are lost and could probably not be recovered and those that are in operation are not working at full capacity. Low demand for goods, delay in delivery of factory inputs from all parts of the world especially China and unpaid invoices together are continuing to squeeze manufacturers during the pandemic.

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5http://www.stats.gov.cn/english/PressRelease/202003/t20200317_1732640.html 6https://eac.int/press-releases/147-health/1711-eac-secretari-

at-urges-partner-states-to-prepare-economic-recovery-plans-for-the-time-after-covid-19 7https://www.yowerikmuseveni.com/fourth-address-covid198 https://www.monitor.co.ug/News/National/4-200-companies-close-over-Covid-19-lockdown/688334-5531256-n2gbmkz/index.html

Covid19: Silver Linings for Uganda’s Manufacturing Sector

Expansion of distribution networks

Emergence of alternatives and Import Substitution


There could be growth in the demand for local products due to the limitation of imports as countries will be under restricted movement for the near future. The disruption of the distribution networks from largely Asia, Turkey, Kenya, Uganda, through to the great lakes region would strengthen local manufacturing and increase value addition. Uganda will need to diversify her source of supplies, espe-cially if possible with the coming of the African Continental Free Trade Area (AfCFTA) and other South East Asian countries like Vietnam, Singapore, and Thailand among others. This could be a new dawn for the greater intra-African trade and collabora-tion where products unique and customised to local needs could be developed. The AfCFTA in particular, offers a great opportunity in areas like pharmaceuticals and food processing where Africa imports $16billion9 worth of pharmaceuticals per year and has most of her members being net food importers. The AfCFTA is due to start on the 1st July 2020 after some outstanding negotiations are concluded though it could be extended due to the Covid-19 disruptions.

For the seasoned manufacturers and traders, it will be gloom if they do not adjust to the global changes in time. Leading trade association Kampala City Traders Associa-tion (KACITA) had predicted that from April the actual strain would surface after stock previously imported ran out. Even though Uganda went ahead and made local alternatives, 80% 10 of inputs for manufacturing were from China or highly affected countries.This could lead to an opportunity for Small businesses to fill in the gaps in areas where it doesn’t make sense for a large company to produce for small mar-kets. This brings to light the advantages for MSMEs11 , their ability to quickly adjust their systems and lines to meet immediate requirements. Areas that would be exploited include; confectionery, cleaning aids, fabrication, distribution services, tobacco products, textiles, footwear among others.

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9https://www.un.org/africarenewal/web-features/coronavi-rus/ways-africa%E2%80%99s-free-trade-area-could-help-mitigate-effects-covid-19 10https://www.pmldaily.com/business/2020/03/ugandas-businesses-will-start-feeling-coronavirus-pinch-in-april-kacita-boss.html 11https://aclaimafrica.com/covid-19-opportunities-businesses/

Hope for MSMEs and Jua Kali13


Enterprises shall emerge that produce several items previously imported due to the favourable market trends, government support and fracture of regional distribution networks. With the government desperate to have the economy back to its feet, there could be several incentives, some specific to allow businesses that are engaged in import substitution to thrive.

This will work with the support of Uganda National Bureau of Standards (UNBS) and the Buy Uganda Build Uganda policy12 along with easy access to credit through Uganda Development Bank and a favourable Central Bank lending rate. Agriculture could witness the highest level of value addition and investment. This is attributed to the fact the rest of the world would be recovering from the pandemic and food will most likely be in high demand especially fresh and natural foods.

Uganda’s MSMEs that make up over 90% 14 of the private sector and 80% of manu-factured goods are the spine of technological innovation and new products. The largely informal sector of the jua kali, have for a long time played a crucial role in industrial development and light manufacturing. They use their ingenuity and creativity to come up with solutions for day to day challenges in industry especially in a situation where we have very low access to skilled labour and spare parts.

Engineering services especially those that support the manufacturing sector could grow; for example, maintenance of plants as well as local production of some spare parts and capital goods e.g. motors, fasteners, tyres, seals, stainless parts, and gears among others. These areas are dominated by micro and small enterprises, there-fore, they will need to formalise and standardize their activities to meet the require-ments of the manufacturers. The entrepreneurs in outskirts like Katwe, Kisenyi, Kiseka market, Ndeeba and Kawempe among other hubs will need business men-torship if they are to meet the new demands of those enterprises.

The jua kali which were steadily being eroded by cheaper and more standardised imports could have a lease of life. Equipment like maize mills, blenders, juice cool-ers, refrigerators among others which they had mastered before the sudden rise of the imports, would be made locally or at least assembled locally.

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12http://www.mtic.go.ug/download/buy-uganda-build-uganda-policy/ 13These are mostly micro and small enterprises comprised of artisanal workers or crafts persons who usually work in not well designated workplaces and are renowned for their ingenuity, creativity and resilience 14https://www.finance.go.ug/sites/default/files/Publications/NSPSD%20BOOK%20WEB.pdf

Availability of Cheaper Credit

A thriving Start-up Ecosystem16

Diversification of manufacturing lines


The government however, shall need to continue supporting them with not only proper policy15 interventions but also implementation including promotion of reverse engineering and product certification.

The existing manufacturers would diversify their factories to make other products that will arise out of the shortage of previously required goods and essentials. This has already manifested, for example; Southern Range Nyanza Textiles making medi-cal (N95) masks, Hoima Sugar making sanitizers, National Enterprise Corporation and Kiira Motor Corporation making testing kit and ventilators among others. With national priorities changing, state enterprises shall be involved in production of much needed essentials alongside their usual products.

With several enterprises being distressed, there could be unprecedented demand for credit as several entrepreneurs emerge to recapitalise their businesses as well as take advantage of new opportunities.

As foreign direct investment will most likely dwindle and travel restrictions could persist, there will be an increase in number of start-ups after all necessity is the mother of all innovation. With all Uganda’s trade partners facing unprecedented challenges, this harbours a fertile ground for start-ups in e-commerce in fields of logistics, agriculture based ventures, medical services among others. The Ministry of Trade, Industry and Cooperatives17 reported that by 20th April 2020, Uganda had seen over 38 enterprises certified to produce sanitizers and cleaning aids up from 28 earlier in the month. Uganda, whose salt needs are purely met by imports from Kenya, registered a new investor planning a 192,000MT/ year plant while in Gulu City, local tailors usually engaged in fashion design have been engaged in making cloth masks after a 700% rise in price of medical masks. Another start up in Gulu, Takataka Plastics18 a social enterprise, has developed plastic face shields for medical use especially when handling sick persons.

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15http://www.mtic.go.ug/download/msme-policy-booklet-2/16https://www.ugandainvest.go.ug/covid-19-presents-both-challenges-and-opportunities-for-investment-in-uganda/ 17http://www.mtic.go.ug/status-of-uganda-trade-amidst-covid-19/ 18https://news.berkeley.edu/2020/04/10/student-in-uganda-cre ates-face-shields-for-covid-19-medical-responders-using-recy-cled-plastic/

Awareness of Quality

Increased Labour Productivity


It is obvious that it will not be business as usual; several employed people could either choose or be forced in to entrepreneurship, new innovations shall need investment, and this will open and force financers to develop products suitable to the unique needs of the time at more affordable interest rates and terms. The Cen-tral Bank has prepared some guidelines to allow entrepreneurs get some relief through a number of policies including encouraging financial institutions to reschedule loans19 , as well as reduction of the Central Bank Rate to the lowest ever of 8% 20 in April 2020. This will accord an opportunity for entrepreneurs to access cheap credit at favourable terms especially from financial institutions with govern-ment shareholding like the Uganda Development Bank, Housing Finance Bank, Pride Micro Finance and the Micro Finance Support Center.

To take advantage of the anticipated changes that could arise with the challenge at hand, UNBS will be crucial to quickly assist in certification and surveillance. The crisis has already seen the standards body get a vote of confidence with increased number of businesses voluntarily working towards product certification. There could be increased funding for quality related matters which, would make Ugandan products more competitive. The country could also witness an emergence of the counterfeit and substandard goods as reduced incomes could force people to get the lesser priced ones. However adequate measures21 are already in place and could only need reinforcement to achieve the desired goal of compliance and com-petitive goods.

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19https://www.bou.or.ug/bou/bouwebsite/RelatedPages/Publica tions/article-v2/Credit-Relief-Measures-to-Miti gate-the-Eco-nomic-Impact-of-COVID-19/ 20https://www.bou.or.ug/bou/bouwebsite/BOU-HOME21https://www.unbs.go.ug//news-highlights.php?news=133&read 22Enterprise Resource Planning is a system that uses data collected over a period of time to help ease several business processes including increase automation and reduce manual labour, optimise production, sales, productivity and profitability

Uganda’s labour productivity is subject to a lot of criticism from employers. The private sector that is struggling to stay afloat and with banks who will be distressed, the combination could either demand more productivity from workers or compa-nies could invest in technology. In a bid to help reduce on expenses including issues related to statutory obligations,staff welfare and shear wastage, enterprise resource planning22 will be adopted by several companies, as they position them-selves to avoid such disruptions. We could see several companies invest in increas-ing their productivity in all their metrics or output or time based remuneration.

Recommendations

Business Outsourcing

Increased government expenditure on public strategic sectors

The Executive


The online businesses in tech, logistics and healthcare are beneficiaries of this lock-down to a large extent as by nature are undertaking social distancing. Several manu-facturers will outsource segments of their businesses again as they position them-selves to maximise profit and concentrate on their core business of production of goods and services. Things like owning fleets of trucks, teams of sales persons, mar-keting teams among others will be reduced. There will be an emergence of special-ised companies or businesses that will only emerge to fill in business gaps as required. These companies will also have loosely connected staff or individuals who will work on contract basis to avoid other statutory requirements and will be attrac-tive to the highly mobile and liberal workforce of millennials.

The Executive needs to create and strengthen trade relations to grow markets for locally produced goods as well as, identify alternative sources of not only materials but also technologies. The disruption in global supply chains will put pressure on government to quickly explore under exploited markets like Sudan, DRC, Central African Republic and Southern African Development Community countries. Appointment of seasoned diplomats to these missions would provide a good base for entrepreneurs to exploit enormous opportunities. Intra African trade accounted for only 16.6%23 in 2017 of African total trade volume compared to Europe’s 68.1%, Asia’s 59.4%, and America’s 55.0%. However, with the impending commencement of the AfCFTA, the executive has to aggressively lead the way for private sector.

The key sectors including health Services, energy, water and agriculture will need an increase in budget support. These sectors are at the centre of the society that ensures social protection during such uncertain spells. Whereas private sector plays a complementary role in fields like media, provision of goods and some services, it remains the prerogative of the government to ensure that the systems work for public good. In a season as this, when oil prices have plummeted, the state should have a capacity to fill her reserves, have enough silos for food, leverage on its super-visory role by instituting proper financial mechanisms like interest rates, credit man-agement in banks as well as decide which sectors will hold the key to economic recovery. For example the lack of national grain and fuel reserves have often time left the country in shortage of supplies or exposed government to poor quality prod-ucts and services.

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23https://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=520

The Industry RegulatorsUganda Revenue Authority and promotion of presumptive tax regime sectors

Improve conditions for green25 manufacturing


The concept of Reduce, Reuse and Recycle are now part and parcel of modern man-ufacturing as mankind battles negative effects of climate change. The Ministry of Trade, Industry and Cooperatives and Ministry of Water and Environment together need to ensure that,Resource Efficient Cleaner Production is promoted as an aid to trade. The companies that embrace green manufacturing or environmentally friendly practices not only help curb climate26 change but also increase their sales and market value. The fourth industrial revolution and the Internet of Things (IoT) is a great opportunity for new innovations in industry that will see adoption of digital solutions at low costs, therefore best practices are easier to adopt because of tech-nology advancement.

The Covid-19 will most certainly have a negative impact on revenue collection and access to credit for Uganda to meet her development and recurrent expenditure. It will be imperative for government to come up with more efficient mechanisms to achieve her revenue goals.

It is clear that several MSMEs either don’t know how to file returns or are unwilling to do so. This will most likely tap into that huge informal sector that eats into the formal sector market share and burdens the few tax payers. The best way to share the tax burden and increase the revenue collection by more citizens is to encourage and enforce presumptive taxes27 on all businesses that fall within the set threshold. There could be more emphasis on expanding the goods and services that are excis-able to widen the tax net without over stretching the “usual suspects” of tobacco, alcohol, soft drinks and fuel. The taxman should also focus efforts towards ensuring compliance of all businesses like the growing e-commerce and the off shore busi-nesses so as to pay their share of taxes.

At local government level, enterprises pay some fees to the local council and several others are not remitting payment to the URA. This means that there is less data sharing between them and excludes several enterprises from the national tax regis-ter. The pandemic will see an increase in local manufacturing and trading, an oppor-tunity for increased revenue collection.

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24https://nilepost.co.ug/2020/04/19/unbs-withholds-100-tonnes-of-covid-19-relief-food-over-poor-quality/ 25Green manufacturing means that all production processes are carried out with protection of the environment as priority throughout. 26https://www.iea.org/commentaries/how-clean-energy-transitions-can-help-kick-start-economies 27https://www.ura.go.ug/Resources/webuploads/GNRART/Presumptive%20tax.pdf

Ministry of Trade, Industry and Cooperatives: Industrial-isation Strategies

Ministry of Finance, Planning and Economic Develop-ment -Stimulus package28

Electricity Regulatory Authority


The effect of Covid-19 should see government revisit the industrialisation and MSME strategies with intentions of actually implementing the several interventions pro-posed. Some interventions which could get a major boost are those that look “inwardly” or support home grown investors and incentivise those who choose rein-vestment in manufacturing and value addition with keen interest for those engaged import substitution. One such policy like stated above, is the Buy Uganda Build Uganda policy that promotes the manufacture and sales of locally produced goods. For example, super markets are supposed to allocate 50% of shelf space to Ugandan products, meaning there has got to be corresponding support towards product

The cost and quality of power is already a problem for commercial users who are the bulk of MSMEs; while, several other cottage industries are billed at domestic rates for electricity. The Private Sector Foundation of Uganda estimates that electric-ity contributes about 20% 30 of the total cost of production. A reduction in the cost of production would create a multiplier effect for producers and consumers alike. These could adversely affect businesses that are already under pressure, there by justification of subsidies of major utilities, power and water.

All manufacturing would be senseless if the market would not have capacity to con-sume the products. With several job cuts and biting poverty, the government could devise some programs or strengthen the existing ones like Operation Wealth Cre-ation, Peace Recovery and Development Plan (PRDP), Uganda Women Entrepre-neurship Program (UWEP), Youth Livelihood Program among others to boost house-hold incomes. Several countries around the world have already announced inter-ventions with an aim of boosting the economy. Some interventions could come in tax reliefs or deferment on payment dates for businesses. The country’s leading private sector umbrella body, PSFU proposed some interventions29 including recap-italising Uganda Development Bank, reduction of taxes on goods produced from locally sourced raw materials as well as paying all domestic arrears due to business-es. The allocation of specific cheaper credit for technology upgradation for manu-facturers to help them become more competitive will be important.

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28https://observer.ug/businessnews/64141-gov-t-to-borrow-shs-1-7-trillion-for-coronavirus 29http://www.sunrise.ug/business/202004/what-private-sector-wants-govt-to-do-to-revive-ugandas-economy.html 30https://www.independent.co.ug/electricity-tariff-drop-not-enough-to-grow-industrial-sector/

Private sector

Uganda National Bureau of Standards: Quality and Standards


The Uganda National Bureau of Standards has set a good precedence of providing technical assistance32 and free standards for sanitizer producers. In a bid to pro-mote quality products and manufacturing, the same offer should be extended to all essential products especially for MSMEs so that Uganda can have more competitive industries and products. With the awareness on quality, it is important the market is served by quality products at a time when all leads point towards import substitu-tion and value addition.

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31http://statehouse.go.ug/sites/default/files/files/presidential-statements/address-corona-virus-4-may-2020-converted.pdf 32www.unbs.go.ug 33https://www.monitor.co.ug/News/National/Uganda-Shs1-9-trillion-loan-IMF-address-economic-impact-COVID19/688334-5544938-ykkc1i/index.html

As already stated in his address on the Covid-19 situation, the President31 has instructed utility companies not to disconnect but reschedule the debts due from users, a decent reprieve for consumers.

Banking sub-sector

Syndicated loans for capital intensive sector like manufacturing should be encour-aged to spread the risk and reduce interest for manufacturers. With a very capital intensive oil and gas sector in the offing, local banks need to muster the tact of pro-viding syndicated loans to enable economic growth over longer payment terms. The International Monetary33 Fund has allocated $491.5million for Uganda’s recov-ery post Covid-19, some of these funds will help cushion the industry and services sector that have seen several job losses and supply chain disruptions.

Financial institutions are the immediate sector to work with after the health risks are contained; all efforts will be towards economic and social recovery. Ugandan banks usually have interest rates at double the Central Bank Rate due to what they term high risk market. However, manufacturers are usually well positioned and grounded to allow proper due diligence and expert advice from the financial insti-tutions. Banks in particular need to hire manufacturing or industry experts who have experience in the actual business to be able to extend the required and tailor made solutions for the different spectra of clients. Most loan takers are those in personal, trade and real estate with very few banks having ample patience and experience with manufacturers who take huge loans for long periods.

The Opportunities Covid-19 Presents to Rejuvenate Uganda’s Manufacturing Sector 11

34https://www.weforum.org/agenda/2020/05/scientists-pandem-ics-coronavirus-nature-covid19-health/?utm_source=sfmc&utm_medium=email&utm_campaign=2718479_Agenda_weekly-8May2020&utm_term=&emailType=Newsletter 35www.ucpc.co.ug 36https://www.unido.org/sites/default/files/2015-10/NCPC_20_years_0.pdf

Resource Efficient Cleaner Production

Manufacturers

During the lockdowns around the world, one thing that came to light is the massive negative impacts that human activity has caused the environment and how much industries lose as a result of neglecting implementation of Resource Efficient Clean-er Production. Scientists agree that unregulated exploitation of natural resources without proper systems will only breed more such catastrophes34 . The Uganda Cleaner Production Centre35 , a trust under the Ministry of Trade, Industry and Cooperatives offers services that can help reduce expenses in industry by use of Cleaner Production by between 20% and 40% in energy, raw materials among other cost centres in a business.

According to a UNIDO report 36, the two decades since 1995 to 2014 have witnessed massive change as follows; global population increased by 26%, global manufactur-ing value increased 77% and 1% was the rise in the share of manufacturing in the global economy. However, in these two decades,global material consumption increased by well over 50% and there was evidence on its impact on the climate. Responsible manufacturing or green manufacturing will not only benefit factories but also buyers who will get cheaper goods while conserving the environment. In a world where more people are concerned about carbon foot prints and sales volumes are driven by responsible production, there is every single need for produc-ers to adhere to cleaner production.The implementation of cleaner production grants an opportunity to reduce the risk of the next pandemic as we grow our enter-prises. .

E- commerce: Adapt or PerishThe reaffirming of the power of the internet has made data the most important asset of an enterprise. With huge amounts of data and information available, short-er lead times in decision making, turnaround time, increased productivity and cus-tomised operations are important for the survival of business. The highly intercon-nected world is responsible for the quick response to handle the pandemic, while keeping abreast with latest industry trends. Companies that donot invest in having an online presence have a less chance of surviving the new age of the internet. All businesses should adopt the use of the internet for business, research, skills devel-opment or else they will not survive in a very competitive global village.

Human Capital Development

Diversification and growth

Conclusion


Many organisations could greatly reduce dependence human employment as they will be adopting technology and leaner production. Enterprises must retool their workers as often as possible to keep abreast with industry practices. Knowl-edge transfer is crucial to ensure sustainable growth and through a Public-Private Partnership, there is need for productivity37 centres to be set up so that manufac-turers retooling of staff as often as needed. This has been very successful in the textile industries and can be replicated for the different sectors so that specific trainings can be done for particular skills gaps. This is very important due to the anticipated restriction of movement of labour. Many industries rely on foreign experts to help operate and, maintain their plants however; revised restrictions including social distancing will force enterprises to invest in skilling of staff to fill the void.

To survive in manufacturing, it is important that enterprises embrace change and evolution through diversification of their portfolio as well as growth in all metrics. This means enterprises must invest in research to keep ahead of times and com-petition especially those in light manufacturing like most within Uganda. With the characteristically long value chains that agro products have, Ugandan manufac-turers involved in agro processing have an opportunity to invest in value addition and make several other products or partner with others to exploit those options. Value chains like Cotton-Textile, animal-leather, fruits- pulp, grain-animal feeds, grain-alcohol, animal feeds, and fertilisers among other many have immense pro-pensity for growth.

Uganda led by the executive and the legislature shall have to recommit to do value addition on all products, be it petroleum, agricultural products or minerals. If Uganda could have value addition facilities and skills, then it should cement her position as a regional hub for logistics and trade. Government must work hard to make not only the country attractive to foreign investment but also attractive to local investment and re-investment especially in value addition. Wastage of public funds or inefficiencies in public offices could be a thing of the past if lessons are well learnt and adopted. The Covid-19 gives Uganda an opportunity to rejuvenate its manufacturing and realign them with best practices to ensure sustainable growth for common good.

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37An industry specific center where companies send their new or existing staff to learn a purely hands-on skill that is needed in their production lines

About the Author


Oscar Olaro holds a BSc Mechanical Engineering and MSc Renewable Energy from Makerere University. He is a Member of the Uganda Institution of Professional Engi-neers. Previously, he worked at the Ministry of Trade, Industry and Cooperatives as an Engineer and was engaged in designing various government policies like the National Industrialisation Policy, National Textile, Micro, Small and Medium Enter-prises policy and the Leather and Leather products policies. Currently, he is the co-founder of JOSO Investments Ltd, a pioneer water bottling plant in northern Uganda.

DisclaimerThe views expressed in this paper do not necessarily reflect the views of KAS but those of the author.

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the opportunities covid-19 presents to rejuvenate uganda’s

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