Amelia Kyambadde 1

The  Minister of Trade and Industry

The Interview
by Milly Kalyabe, Director/Editor, Uganda Economy 
(as recorded)

The Foreign Investment, The Market, The Quality & The Competition

Amelia Anne Kyambadde is a Ugandan politician. She is the current Minister for Trade and Industry in the Ugandan Cabinet. She was appointed to that position on 27 May 2011.  She replaced Kahinda Otafiire, who was appointed Minister for Justice.  Amelia Kyambadde is the elected Member of Parliament (MP) for Mawokota County North in Mpigi District. Recently Milly Kalyabe interviewed her on general issues of trade and investment. Below are the excerpts.  

Qs: Why would anyone consider Uganda for investment? Would you recommend anyone to invest here?
A: Oh yes, strongly. I feel that Uganda is the best investment destination because of liberalised economy, cheap labor and it is the center of regional integration - it’s the focal point – and the security is guaranteed. 

In Uganda, the capital outflow is unlimited. Once you bring in your money, you can take out all your money. There are no limitations as to how much you can take out as compared to other countries. 

Qs: Which sectors are potential for the investment?
A: All but agriculture, agro business, manufacturing, and mining have high potentials. 

Q: What sort of incentives does government give to the manufacturing sector?
A: First of all, you have to know what kind of manufacturing. There is agro business, mining and the service sector like banking and insurance - there are various forms of investments.  So if you are coming to manufacture here, say in the agro business you must create a link/partnership with the out growers (in case of sugar), to be able to supply you with raw materials. Or if you want to process items that are connected with Agriculture such as maize, flower you still need to be assisted with the farmers. It’s not obligatory but if you don’t do it, you stand a risk of dealing with middlemen.

When it comes to Minerals we are looking at Public Private Partnership (PPP) because these are capital intensive. The Uganda Development Corporation, which is under my ministry and the financial arm of government, can take on certain percentage and you also meet part of it. In those areas you have minerals, energy, water projects/ plants or infrastructure.

Then, we have running projects, for example, the fruit processing plant in Soroti which we are doing with KOICA, a Korean Company. Plus we have Kalangala Infrastructure Service (KIS) which will address sectors like marine transport services, clean water access, electricity and roads construction. KIS is a multi-sector infrastructure project which we are doing with a subsidiary of the UK based InfraCo Ltd.   

Also if anyone is coming in to manufacturer, you bring in your equipment tariff free. The other concession is the Corporation Tax - it used to be ten years but it has been reduced to five years. That means in those five years you don’t pay Corporation tax until you are fully established. 

We used to give out the land freely but the land has become a bit controversial. What we are looking at now is that if we are to offer land, let it be on equity basis - not to just give you the land free - like in the past. 

We have Industrial Parks which are potential for the investment. You can take it on as your investment to develop those industrial parks and hand them over to government after. The land is also there for the parks and this is a potential area. But if you have an industry, I want to sight Roofings, the company making iron sheets and galvanized products, acquired the land in Namanve industrial park and developed it themselves. In the same way, anyone can acquire a plot of land and develop it.

Qs: So how do they acquire land in such places?
A:  You pay a certain fee which is really minimal. It’s about $50,000 for the land that may be go for $600,000 - the land is very expensive but this is nothing, a token really. It is just commitment fee which you deposit with Uganda Investment Authority before they process your lease for the 49 years. The chunk of the land you get for such money is a minimum of about five acres. 

Uganda is one of the safest countries in the region. Security of persons and properties are very safe. We are more alert on security and quite strong. Well, you could have petty pick picketers but like anywhere, Europe or elsewhere, this is inevitable and you can’t rule out completely.

Qs: There is a problem of manufacturers competing with cheap substandard products. How does government safe guard manufacturers against unfair competition?
A: We have been fighting substandard products and we have introduced a Pre- Inspection Scheme whereby if you import the products these have to be checked at the point of origin. Introducing this facility is one way to control the influx of substandard products in the market.  We have high hopes that this is going to help because if you don’t have your products checked, you are going to be subjected to a surcharge by UNBS. So people have to adopt that system.

Qs: How is the market like?
A: Market is one area we have mastered well and have mastered it through regional integration too. In Uganda we have a population of about 33 million. It’s a lot but not sufficient for business because out of that 33 million you might find that the people who can afford to buy your products are only 49 or 50 percent. 
So we have gone for regional integration. As the East African community, we have a bigger market with population of about 149 million where you can sell your products at a zero tariff. In this market of five countries, there is free movement of goods and labor. 

We have broadened the market further to COMESA which has 19 countries. That is also a free trade area with free movement of labour, goods and services. COMESA has a market of about 389-400 million people.

Now we have broadened it further to the tripartite to cover EAC, COMESA and SADC. So market is no problem and you may actually find that we are no longer even interested in exporting to EU. We have enough market and it is even easier in terms of transportation and the terms are not too bad. Sometimes EU becomes a bit stringent. So the market is assured. 

Qs: Are there any other private players on the certification scheme because UNBS has a very small number of certified products?
A: Oh yes, there are other private facilities that certifies products like a company called CHEMIPHAR. Some producers prefer to use private certification so they use CHEMIPHAR. The drugs are under National Drug Authority (NDA), a government body also responsible for certifying all drug related activities. Also very important, those products are certified in clusters for example, if you have a standard for milk, it does not matter which brand.