National Industrial Policy

1.1 BACKGROUND.............................................................................................1

1.2 POLICY CONTEXT.....................................................................................3

1.3 OPPORTUNITIES FROM THE COVID-19 PANDEMIC...............................14

1.4 PROBLEM STATEMENT...........................................................................14 2. POLICY VISION, MISSION, GOAL, OBJECTIVES, AND OUTCOMES........................16

2.1 Vision...............................................................................................16

2.2 Mission................................................................................................16

2.3 Goal........................................................................................................16

2.4 General and Specific Policy Objectives.............................................17

2.5 Selected priority industries..................................................................18

2.6 Guiding Principles.................................................................................19

2.7 Anticipated Policy Outcomes................................................................20 3. STRATEGIC POLICY INTERVENTIONS...................................................................21 4. LINKAGE WITH OTHER POLICIES AND CROSS CUTTING ISSUES......................26

4.1 Policy anchoring to other policies, laws and strategies......................26

4.2 Cross cutting issues...............................................................................27 5. IMPLEMENTATION ARRANGEMENTS....................................................................28 6. MONITORING AND EVALUATION FRAMEWORK....................................................38 7. COMMUNICATION STRATEGY................................................................................39 8. FINANCING MECHANISMS....................................................................................40 MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | vii AC R O N Y M S A N D A B B R E V I AT I O N S AfCFTA African Continental Free Trade Area CBR Central Bank Rate COMESA Common Market for Eastern and Southern Africa EAC East African Community EPAs Economic Partnership Agreements GDP Gross Domestic Product ISIC International Standard Industrial Classification KWH Kilowatt hour M&E Monitoring and Evaluation MAAIF Ministry of Agriculture, Animal Industry and Fisheries MDAs Ministries, Departments and Agencies MoES Ministry of Education and Sports MoSTI Ministry of Science, Technology and Innovation MoTIC Ministry of Trade, Industry and Cooperatives MoWE Ministry of Water and Environment NDP National Development Plan NDR National Development Report NEMA National Environment Management Authority NIP National Industrial Policy OWC Operation Wealth Creation RIA Regulatory Impact Assessment SDGs Sustainable Development Goals TEXDA Textile Development Agency TVET Technical and Vocational Education and Training UCPC Uganda Cleaner Production Centre UDB Uganda Development Bank UDC Uganda Development Corporation UEPB Uganda Export Promotion Board UFZA Uganda Free Zones Authority UIA Uganda Investment Authority UIRI Uganda Industrial Research Institute UNBS Uganda National Bureau of Standards UNCST Uganda National Council for Science and Technology UNDP United Nations Development Programme UNIDO United Nations Industrial Development Organisation UN United Nations viii | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES G LO SS A RY Agro-processing All processes that transform agricultural produce and intermediate agricultural products to increase shelf life, variability, transportability and market value. Cottage Industry A small-scale, decentralized manufacturing business often operated at a home residence as opposed to a purpose-built manufacturing facility. Cleaner Production A preventive, company-specific environmental protection initiative that is intended to minimize waste and emissions and maximize product output. Industrial Cluster A concentration of interconnected firms, suppliers and supporting institutions in a particular industrial sub- sector. It can be value chain, geographic or product based. Industrial Development Increase in the production of economic goods and services, and enhancements in production and consumption patterns because of advancement in technological processes. Industrial Park An area planned and designed for the purpose of industrial development and serviced with dedicated industrial load electricity supply, roads, railway, piped water system and ICT networks, among others. Industrial Parks enable the timely set up of factories and industries. Industrial Sector A key sector that makes up the secondary sector of a country’s economy. This sector accepts primary sector end products and transforms them into finished products. Industrialization Progression from a low-base and low-skill economy to an innovation-based and high-skilled economy where technological progress increases production of economic goods and services. Industry A set of all production units engaged primarily in the same or similar kinds of productive activity. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | ix Information Technology New inventions driven or derived from recent research developments and technological knowledge. Intellectual Property Categorization of products or services, including intangible creations basing on human intelligence, as copyrights, patents and trademarks, hence according them rights against unfair competition. Metrology The science of measurement, which is divided into three fields, namely: Legal or Trade Metrology, Industrial and Scientific Metrology. Manufacturing Manufacturing is the physical or chemical transformation of materials or components into new products. Manufacturing Value Added The net output of the manufacturing sector, calculated from the sum of all outputs and subtracting the sum from intermediate inputs. Mineral Beneficiation A process that improves the economic value of mineral ores to improve their physical property and make them more suitable for direct use or further processing. Examples of beneficiation processes include froth flotation and gravity separation. Patent A set of exclusive rights to ownership of a good or service for a specified time as per law established (often an invention). Technology Progressive application of new research and science in achieving transformative production of products. x | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES EXECUTIVE SUMMARY The Government has been value chains for investment are implementing the maiden National stated below: Industrial Policy (NIP) since 2008. i. Agro-based industries: Fruits, The NIP was reviewed in 2017 and Coffee, Cotton, Textiles and the key findings indicated that Apparels, Tea, Cassava, Grains, some progress was made in policy Oil Seeds, Sugar Cane, Bananas, thrust areas such as institutional Dairy, Leather, and Leather development, industry-facilitating Products. infrastructure, and public-private partnership (PPP) enhancement. ii. Extractive-based manufacturing However, the industrial sector is industries: Iron and Steel, Oil and faced with continued challenges Gas (LPG), Synthetics, Plastics, of low productivity and capacity Petrochemicals, Salt, Cement, utilization, insufficient supply of and Fertilizers. quality raw materials for value iii. Knowledge-intensive industries: addition, low technology uptake Pharmaceuticals, Automobiles, and adoption, high cost of value Electricals and Electronics, and addition, inadequate skilled Products Assembling. human resources, and limited capacity to comply with standards and regulations for product The Vision of this Policy is to build quality, safety, and environmental a fully integrated, competitive, high protection. This Policy focuses on value and productive industrial consolidating the achievements sector. The Mission of the Policy is attained and addressing the to accelerate sustainable industrial identified gaps, as well as emerging transformation through an increased issues. developmental role of the State, reduced cost of production, and The Policy identifies strategic improved quality of manufactured value chains and interventions products. The Policy Goal is that will meaningfully contribute ‘increasing the manufacturing to employment creation, increase value-added as a percentage value addition to local raw materials, of GDP from 8.3% in 2018/19 and promote import substitution to 16% by 2029/30’. The NIP has and exports. The Priority industrial been designed to foster growth of MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | xi the industrial sector anchored on inspiring structural transformation, iii. Develop and strengthen skilled with a principle focus on four result human resource in order to areas, namely: increase productivity and i. Increased value addition of local efficiency in the sector. raw materials and products iv. Accelerate development and with comparative advantage for use of research innovations social-economic transformation. and adoption of appropriate ii. Increased exports of technologies in industry. manufactured products by v. Promote resource-efficient and facilitating industries to increase environmentally sustainable production and match market industrialization. demands in terms of both quality and quantity. The Policy is driven by a firm iii. Increased employment in commitment to Industrialization by the industrial sector through Government; potential benefit from establishment and promotion of global and regional value chains industries that create large-scale as a result of favourable labour employment opportunities, markets; increased access to bi- ensuring inclusive growth and lateral, regional, continental, and sustainable development. global markets; and abundant raw materials. The expected outcomes iv. Increased adoption of to be realized over the ten-year environmentally sustainable period of implementation are: technologies by manufacturing sub-sectors. i. Increased industry sector contribution to GDP from 27.1% The specific objectives of the NIP in 2018/19 to 31.7% in 2029/30. are to: ii. Increased contribution of i. Increase public investment manufacturing to GDP from and nurturing of industrial 15.4% in 2018/19 to 26% in development projects in strategic 2029/30. areas. iii. Increased ratio of manufactured ii. Increase and sustain the supply products exported to total of quality raw materials for exports from 22.5% in 2018/19 to value addition. 46.8% by 2029/30. xii | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES iv. Reduced ratio of manufactured The preparation of the policy products imported to total has followed an inclusive imports from 63.2% in 2018/19 process where all stakeholders to 45% in 2029/30. including Government MDAs, Development Partners, Private v. Increased share of jobs from Sector Associations, Civil Society manufacturing subsector to Organizations (CSOs), and Academia total formal jobs from 9.8% in were extensively consulted at 2018/19 to 15% in 2029/30. various stages of the preparation process. In addition, the Policy has At the apex of implementation, been aligned to reflect aspirations Cabinet shall provide strategic in the National Vision 2040, EAC direction for Uganda’s Industrialization Policy 2012-2032, industrialization agenda. In order African Union Agenda 2063, and to enhance effective and cohesive the United Nations Sustainable coordination of implementation Development Goals (SDGs) 2030. of the National Industrial Policy, an Inter-Ministerial Manufacturing Industry Coordination Committee (IMICC) chaired by the Minister responsible for Industry shall be established. Implementation of the policy objectives will be multi- sectoral and cut across different Ministries, Departments, and Agencies (MDAs), and therefore the IMICC shall provide the coordination and consultation forum. The Office of the Prime Minister shall ensure harmony and coherence in policy implementation. The Office of the President will monitor and evaluate implementation of recommendations from IMICC. Government shall also collaborate with the Private Sector, Civil Society, Development Partners and all relevant non-state actors in the implementation of this Policy. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | xiii 1 INTRODUCTION

1.1 BACKGROUND The fundamental goal of economic road network, energy generation, development of any country is to information communication and improve the welfare of her citizens technology network, vocational and a number of governments and technical training institutes, globally have sought to promote enhancement of Public Private industrialization to achieve this Partnerships (PPPs), development objective. Most developed and and implementation of emerging economies in the world manufacturing subsector policies, have used Industrialization to strategies and plans, among others. achieve economic development However, the industrial sector is and structural transformation. In still faced with challenges, including 2008, the Government of Uganda but not limited to: high cost of put in place the first National industrial finance, insufficient Industrial Policy and Strategic Plan. supply of quality raw materials, low The vision of the Policy was to technology uptake and adoption, “build the industrial sector into a unskilled human resource, and modern, competitive and dynamic limited capacity of the Private Sector sector that is fully integrated into to comply with product quality, the domestic, regional and global safety, and environmental standards economies”. Some of the key and regulations. achievements attained after ten years of implementation included: The review of the 2008 National revival of the Uganda Development Industrial Policy recommended an Corporation (UDC), strengthening enhanced role of the state in driving the capacity of Uganda Industrial industrial development. Specifically, Research Institution (UIRI) and the state should focus on: Uganda National Bureau of i. Provision of industrial support Standards (UNBS), increasing the infrastructure. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 1 ii. Skilling labour force. Following these recommendations, an options analysis Regulatory iii. Facilitating industrial research, Impact Assessment (RIA) was innovations and technology conducted. The RIA determined that transfer. the best option was to review the iv. Maximizing value addition of existing National Industrial Policy. raw materials and supporting The revised National Industrial infant industries to increase Policy has thus been developed to: compliance with national and i. Consolidate the gains from the international standards. previous Policy. v. Increasing capitalization ii. Accommodate the emerging of Uganda Development issues in the sector since 2008. Corporation (UDC) to co-invest with the Private Sector in iii. Provide a framework to further strategic industries that require the national Industrialization large initial capital investment, agenda over the next decade. and Uganda Development Bank (UDB) to provide low interest This Policy is aligned to Uganda’s loans to the Private Sector Vision 2040, which envisages a involved in the Industrial Sector. transformed Ugandan society from a peasant to a modern and prosperous vi. Ensuring efficiency of financial country by 2040, through the markets. implementation of six sequenced, five-year National Development Plans (NDPs). Specifically, the third NDP (2020/21-2024/25) emphasizes sustainable industrialization for inclusive growth, employment and sustainable wealth creation. 2 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES

1.2 POLICY CONTEXT

1.2.1 Global Context

1.2.1.1 Global Industrial Sector developing and emerging industrial Performance economies. In countries with higher MVAs, manufacturing has played Industrialization has been used as a crucial role in job creation as an engine for development in many industries offer mass employment. advanced and emerging economies In 2016, the share of industry to through the production and global employment was 22.5%. consumption of high value products and services. According to the World In addition, Industrialization has Bank (2018), the contribution of enhanced the value of exports. industry (value added) to world Globally, most manufactured exports production was 25.4% and the are medium to high-tech products manufacturing value added (MVA) such as chemicals, machinery as the percentage of GDP was 16.4%. and equipment, communications The share of manufactured to total equipment, and motor vehicles. merchandise exports globally stood These products accounted for 60% at approximately 22%. of all manufactured exports in 2015 (UNIDO). Exports of manufactured Despite the global averages above, goods by developing and emerging there are contrasting results industrial economies increased by between industrialized, emerging, 12.6% from 2000- 2015, raising their and least developed economies. contribution to world exports from Comparative figures for MVA as 12% in 2000 to 30% in 2015. reported by UNIDO industrial performance report of 2016 were Following from the above- 13.8% for Industrialized economies, referenced analysis, the current MVA 19.6 % for developing and emerging of 8.3% for Uganda is still below industrial economies, 14.8% for the world average of 16.4% and emerging industrial economies, 11.9% for least developed countries. and 11.9% for least developed The contribution of manufactured economies. The world MVA has exports to total exports of 22.5% grown faster than GDP due to the matches the world average but influence of high MVA growth in MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 3 is below that of developing and countries. Furthermore, the national emerging economies. education system will be reviewed and oriented to produce high-end

1.2.1.2 Trends in Industrial scientific, technological, research Development and engineering skills to build capacity and competitiveness of the Over the last 30 years, developed local industry. countries have progressed in high- end industries and pushed to In September 2015 at the UN General maximize profits by sending most Assembly, a transition was made of their producer companies to low- from Millennium Development wage countries, especially in the Goals (MDGs) to Sustainable Americas and South Eastern Asia. Development Goals (SDGs) at This push, referred to as off-shoring, the heart of the 2030 Agenda for has led to a dispersion of global sustainable development. Under supply chains that currently provide this new agenda, industrialization an opportunity for specialized is positioned as an integral part of industrial capacities to be built global economic transformation and by various developing countries as a mechanism able to fast-track the including Uganda. There is, transformation of production and therefore, need for the Government consumption patterns. The SDGs to develop local capabilities to tap call for the promotion of inclusive into these job opportunities that and sustainable Industrialization. will continue to be created. This includes efficient use of natural resources, clean production, and In addition, with the ensuing fourth the need to invest in ways that industrial revolution, digital value tackle the adverse effects of climate chains and production are poised to change. Uganda’s industrialization disrupt the nature of manufacturing agenda will, therefore, put into globally. However, opportunities will consideration its commitment to the be and are being created for Uganda attainment of the SDGs. and other African countries to accelerate economic transformation

1.2.1.3 Comparisons with into higher rates of productivity and economic growth. To leverage these selected developing opportunities, Government will play countries a proactive facilitating role to attract E T H I O P I A : In the early 2000s, and absorb surplus light-labour the country developed an Industrial intensive industries from developed 4 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES Development Strategy (IDS) based foreign investments mainly through on the vision for Agricultural development and administering Development Led Industrialization of Industrial Parks. The economic (ADLI). The strategy recognizes the incentives offered by the country role of the private sector as an engine include generous credit schemes, in the industrialization process. exemption from the payment of The priority sectors qualifying duties on import of all investment for government direct support capital goods and raw materials included: textile and garment; necessary for the production of meat, leather and leather products; export goods; and tax holidays on other agro-processing industries profit for five years. (e.g. sugar and sugar-related industries), construction industry Ethiopia has additionally and Micro and Small Enterprises established a Public-Private (MSEs). In addition, there is a strong Consultative Forum, jointly state role and commitment in chaired by the Government and infrastructure and human resource private sector representatives. The development, ownership of selected country, in partnership with UNIDO, industries, and capacity building implements a Program for Country to guide the private sector through Partnership (PCP), an innovative the development process. The model for accelerating inclusive and Government owns establishments sustainable industrial development. in the fields of electric power, The PCP builds synergies between railways, metallurgy, engineering, on-going Government and partner textiles, telecom and leather, interventions and facilitates among others. Industrial zones mobilization of partners and have been established in different resources to leverage additional parts of the country to attract investment in selected priority FDI in the promotion of industrial sectors in order to maximize development. Electricity is provided development impact. at US cents 3 per KWh. K E N Y A : The country’s Industrial Ethiopia also established the Policy Framework 2012-2030 Industrial Parks Development focuses on value addition for both Corporation (IPDC). The IPDC has primary and high valued goods; and since nurtured manufacturing linkages between industrial sub- industries, promoting and sectors and other productive sectors attracting both domestic and to drive the industrialization process. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 5 The Policy obliges all counties to to invest in industrial development. zone and avail land for industrial VI E T N A M : The country development and provides for the has prioritized industries and establishment of Special Economic industrial fields, primarily Zones (SEZs), Industrial Zones and focusing on agricultural and rural SME Parks, and Industrial, Science, industrialization and modernization, and Technology Parks. This policy on the basis of high-quality further proposes the development human resources and advanced of appropriate incentive packages technologies. The priority areas of for the establishment and dispersion the Industrial Policy are automobile of industries across the counties. manufacturing including the motorbike industry, as well as textile To coordinate industrial and garment manufacturing. development, there is a National Industrial Development Commission There are more than 200 state- with executive powers to coordinate established industrial corporations the implementation of industrial and the State maintains significant development policies and ownership in public utilities, energy, programmes; and to restructure mining, infrastructure, cement and and strengthen industrial regulatory steel production, telecoms, banking institutions to ensure effective and insurance. Since 1991, the implementation of policy initiatives. country has established 325 Special The nation also has an Industrial Economic Zones. However, after & Commercial Development WTO accession, previously offered Corporation (ICDC) with a mandate tax holidays and land rent privileges to facilitate the industrial and have been reduced. economic development by aiding in the initiation, assistance, or The performance indicators for the expansion of industrial, commercial different countries listed above are and other entrepreneurial as shown in Table 1. undertakings. An Industrial Development Fund is in place to support the development of strategic industries through joint ventures with key partners. The country also provides incentives to encourage Kenyans in the diaspora 6 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES Table 1: Industrial Performance comparisons 2018 (World Bank) Ethiopia Kenya Vietnam Uganda Industry contribution to GDP (%) 27.3 16.4 34.2 19.9 Share of manufactured exports to 13 28 83 23 total exports (%) Manufacturing Value Added (%) 5.8 7.7 16.0 8.3 Share of employment (%) 12 7.6 25.8 7.4 at 7.5%. The main value-added From the above comparisons, the products exported included articles key lesson is that the following of apparel and clothing, tobacco, components appear necessary for iron and steel, essential oils, plastics, industrial sector development: the and pharmaceutical products. central role of the state in driving and coordinating industrial sector interventions; provision of transport In comparison, in 2017, the share of and energy infrastructure; provision manufactured to total merchandise of low interest and long-term exports in the Common Market financing; building private sector for Eastern and Southern Africa capacity; establishment of serviced (COMESA) region stood at industrial parks; and strengthening approximately 24% while the the role of Local Governments. contribution of Manufacturing Value Added to GDP of COMESA region was 10.7%. In the same year, the share of industry to total employment

1.2.2 Regional Context stood at 10.3%. The main value- In 2017, the share of manufactured added products exported included to total merchandise exports in the chemicals and chemical products, East African Community (EAC) stood spices and condiments, and textiles. at approximately 22%. In addition, the contribution of Manufacturing Further comparison with the Value Added to GDP of EAC was Southern African Development 7.9%. In the same year the share of Community (SADC) illustrates that industry to total employment stood in 2016 the share of manufactured to MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 7 total merchandise exports in SADC In March 2018, Uganda and other was 20% while the contribution African countries signed the of Manufacturing Value Added African Continental Free Trade Area to GDP was 11.1%. In the same (AfCFTA) Protocol which aims at year, the share of industry to total creating a single market for goods employment stood at 19.3%. and services. The AfCFTA is a large The main value-added products market of over USD 3.4 trillion GDP. exported included chemicals and The potential impact of the AfCFTA chemical products, iron and steel, includes boosting intra Africa trade, automotive and automotive spare manufacturing exports, job creation parts, copper and copper products, and enhanced incomes. and machinery. The EAC demand for manufactured At the regional level, Uganda is a goods is growing annually at 16%. member of the Common Market Products for which EAC provides for Eastern and Southern Africa a large number of opportunities, (COMESA), East African Community given their demand trends, include (EAC), and the Southern African but are not limited to vegetable Development Community (SADC) oils, pharmaceuticals, iron and Tripartite Free Trade Area (TFTA). steel products, fertilisers, cement, The TFTA follows a developmental cotton apparel, leather footwear, approach to regional integration and and heavy petroleum. This offers the is anchored on three pillars, namely: possibility of enlarging production market integration, infrastructure of these products within EAC. development, and industrial development. The objective of the In addition, intra-African exports are Industrial Development pillar is to largely processed or intermediate address supply side and productive goods whereas African exports to the capacities in member countries. rest of the world are predominantly As a pioneer of the EAC, Uganda is unprocessed produce and extractive committed to the adoption of the commodities. This provides an EAC Industrial Development Policy opportunity to expand the industrial and has included key aspects of base in Uganda to increase on the the EAC Industrial Development level and scope of value addition Strategy in this Policy, where for effective participation in the relevant to the Ugandan context. African Continental Free Trade Area These include implementation of (AfCFTA). the revised EAC Common External Tariff (CET), supporting of Ugandan 8 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES exporters within the block to marble, sand, iron and steel, maximally benefit from these fertilizer, and lead acid batteries, revised tariff structures, upgrading of among others. Micro Small and Medium Enterprises (MSMEs) by promoting strategic The construction sub sector dialogue between the Public and includes general and specialized Private sector, and supporting construction activities for buildings targeted industry value chains with and civil engineering works. It is widespread linkages to productive the second largest contributor of sectors within the region. industrial performance, contributing 24.0% of the industry sector output and 6.5% of real GDP growth in

1.2.3 The National Context 2018/19. This has risen by 70.7% since 2008, mainly because of public

1.2.3.1 Industrial sector investment in infrastructure and performance private real estate development. The construction sector remains Uganda’s industrial sector is critical to the expansion of Uganda’s comprised of the following physical infrastructure including sub sectors: manufacturing, roads, railway, and hydropower construction, mining and plant construction, and is the quarrying, electricity, and water. Its cornerstone of urbanization. contribution to GDP has increased Undesirably, the factories that from about 25.1% in 2008 to 27.1% locally manufacture construction in 2018. Manufacturing is currently materials mostly import raw the largest component of the materials and intermediate inputs industry sector, contributing 57.2% at a high cost. This creates need to of the industrial sector output in strategically support investments in 2017/18. It is largely comprised the extraction of the minerals and of agro-processing and mineral beneficiation. processing. Agro-processing is the largest component within the However, manufacturing has manufacturing sub-sector and played a limited role in structural comprises mostly of coffee, tea, transformation of the economy as cotton, tobacco, grains and cereals, its real growth to GDP has marginally meat, dairy, leather, and fish. The risen from -2.5% in 2012/13 to 2.8% mineral processing industry is in 2018/19 and has not significantly comprised of cement, ceramics, contributed to employment. The MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 9 Manufacturing Value Added as Added of low-income countries of a percentage of GDP averaged 11.9% and the global average of 8.8% over the period from 2008 to 16.4%. The MVA performance in 2018. In 2018, the contribution of respect to the economy since 1990 is Manufacturing Value Added to GDP as shown below. was 8.3%. This figure is lower than the average Manufacturing Value Figure 1: MvA performance for Uganda for the period 1990-2018 (World Bank) In 2018, the share of industry to total enterprises, 40% of which are employment stood at 6.8% while concentrated around the central the share of manufactured to total part of the country. Furthermore, merchandise exports in Uganda the sub-sector is characterised by a stood at 19.8%. The main value- narrow base, low capacity utilisation added products exported included estimated at 52%, limited capacity steel, cement, dairy products, to conform to the international sugar, and gold. The manufactured market requirements and low exports are dominated by low- uptake of technologies. value commodities and contribute between 24% to 26% of total exports over the period 2008-2018.

1.2.3.2 Enabling Environment for industrialization Approximately 94% of firms Sustainable peace and security: operating in the manufacturing Sustained peace and security have sub-sector are Micro and Small- provided the basic anchor for 10 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES economic growth and development. Establishing and strengthening From 1986 to date, Government has Industry-supporting institutions: ensured peace and security in all Agencies with a mandate and parts of the Country. functions that facilitate industrial development have been established Macro-economic stability and and strengthened over the last economic growth resilience: decade. These include MDAs Uganda has witnessed sustained such as the Ministry of Science, macroeconomic stability Technology and Innovation, Uganda underpinned by low and stable Development Corporation, Uganda inflation averaging 5%. The economy Investment Authority, Uganda has also registered consistent National Roads Authority, Uganda growth, expanding from UGX 64 Development Bank, Uganda trillion in Financial Year 2010/11 to National Bureau of Standards, UGX 128 trillion in Financial Year Uganda Export Promotion Board, 2018/19 in nominal terms. The Management Training and Advisory economy has remained relatively Centre, Uganda Industrial Research resilient despite a challenging Institute, National Agricultural global economic environment, Research Institutes and Uganda Free geopolitical challenges and the Zones Authority, among others. deepening impacts of climate change. The rebound in real GDP Expanding investments in the growth in Financial Year 2017/18 to Country’s road infrastructure: 6.2% (after a sluggish growth of 3.6% The total paved roads network as a in Financial Year 2012/13) is evidence percentage of total national roads of a relatively robust economy. The increased from 8% (1,000 km) in economy was projected to grow 1986 to 21.1% (5,500km) in 2019. above 6.0% before the onset of Further, the dual road carriage road the novel coronavirus (COVID-19) network has increased from about pandemic. However, the Country 16 km to over 80 km by December has registered significant economy- 2018 with the completion of the wide achievements that have begun Kampala-Entebbe Expressway. to lay the foundation for boosting industrialization and economic Investment in energy development as elaborated below. infrastructure: Energy infrastructure has raised the country’s generation capacity of electricity from 601MW in 2010 to 1252.4 MW in 2019 and MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 11 to 1839 MW by end of December Kapeeka, Tangshan IBP Mbale, and 2020. As a result, national access to MMP IBP Buikwe. electricity has increased from 11% in 2010 to 24% in FY 2018/19 and the cost of energy reduced from 9 Strengthened Information and cents and 16 cents in FY2012/13 to Communication Technology: 8 cents and 9.8 cents for extra-large By the end of the Financial Year and large industries by September 2017/18, the total optical fibre 2018, respectively. However, it is network, both Government and still higher than the target of 5 cents privately owned, covered 2,424 kms. per unit, which remains a burden The cumulative number of districts to manufacturing industries. The and MDAs connected to the national cost is even higher for medium- infrastructure has correspondingly sized industrial consumers at 15.6 increased to 39 and 369 respectively cents per unit and for commercial as of Q1, 2018/19. Further, the consumers (cottage industries) at number of internet users has 17.5 cents per unit. increased from 13 million in 2015 to 18.8 million in 2017, translating to a Industrial Parks and Free penetration rate of 45.4%. This also Zones: Government embarked means that 297 government services on acquisition and development have been automated and 71% of of land to make available 22 these are being provided online. The Industrial and Business Parks (IBP) automation of Government services across Uganda. Works have so has reduced processing times and far been commissioned in a total improved service delivery of work of 10 Industrial Parks including permits and trading licenses from four privately owned parks. The 30 days to 4 days, and 24 hours to 15 public parks include Kampala IBP minutes, respectively. Namanve, Bweyogerere IBP, Luzira IBP, Jinja IBP, Soroti IBP, Mbarara Enrolment at Business, Technical SME Park and Kasese IBP. Through and Vocational Training (BTVET): the Public Private Partnership Enrolment in BTVET has increased framework, Government has significantly. Skills development attracted and supported investors has also been facilitated by the to develop Industrial Parks (IP). refurbishment and establishment Three privately owned parks are in of technical and vocational advanced stages of development institutions, especially at the district and these include Liao Shen IBP level. Currently, 42% of all districts 12 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES have at least one Government-aided 3.4%. Notable improvements were technical and vocational institution observed in coffee, tea, maize, providing varying levels of skills cassava, dairy, fish, sugar cane and development. Consequently, bananas production. Production enrolment into BTVET increased from capacity for these commodities has 25,262 in 2008 to 129,000 in 2017. increased: coffee (7.75 million bags Progress has also been registered / 60kg), tea (79,466 MT), maize (5 towards the establishment of four million MT), cassava (302,000 MT), centres of excellence: Uganda milk (2.5 Billion litres), fisheries Technical College (UTC) Elgon for (461,000 MT) and bananas (532,370 civil works and building technology, MT), providing raw material base UTC Lira for highways construction for agro-based manufacturing and drainage, bridges, and road industries. However, there is need construction, UTC Bushenyi for food for the Agriculture Sector to enhance manufacturing and food processing, efforts to improve the quality and and Bukalasa Agricultural College safety commodities supplied to for crop and animal husbandry. More industries for value addition. investment and closer alignment of the training and skilling programmes to industry sector requirements will be required. Increasing agricultural production under the Operation Wealth Creation (OWC): Through the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) and National Agricultural Advisory Services (NAADS) with support of Operation Wealth Creation (OWC), Government has provided free seedlings and fertilizers to farmers aimed at increasing agricultural production and productivity. This has resulted in improved growth rates for the agricultural sector over the last five years averaging MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 13

1.3 OPPORTUNITIES FROM THE COVID-19 PANDEMIC The emergence of the novel focus on addressing the essential coronavirus (COVID-19) pandemic needs of humanity, namely: food, has impacted negatively on clothing, shelter, health, education, economies of many countries physical infrastructure, defence and globally, with unprecedented security, among others. consequences for manufacturing industries and supply chains. To build an integrated, self- Mitigating the impact of COVID-19 sustaining national economy, the on manufacturers and supply chains National Industrial Policy has been requires both new approaches reviewed and refocused to drive and new forms of collaboration to industrialization based on local increase overall resilience. Despite resources, import substitution and the problems occasioned by the increasing exports of manufactured pandemic, some opportunities have products to regional and arisen and can be harnessed through international markets. investments and production that

1.4 PROBLEM STATEMENT Uganda’s Industrial Sector is of technology, limited research dominated by small-scale firms with and development, unfavourable low value addition. Approximately environment for innovation, limited 94% of firms operating in the sector access to information, and low are Micro and Small Enterprises. The awareness of existing technologies. sector is also characterised by low productivity, low capacity utilisation In addition, the sector is faced with that stands at 52% of installed insufficient supply of raw materials capacity and use of mainly low-level due to; low primary production and technologies. productivity, limited backward and forward linkages, limited storage Low technology uptake and facilities, high post-harvest losses adoption is attributed to high cost and climate change. 14 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES mandated to nurture industrial The Industrial Sector also development. The sector also has experiences high cost of production some industries established without resulting from high energy tariffs, proper licensing and are not spatially high transportation costs, high cost distributed across the country. This of finance and reliance on imported is attributed to obsolete legislation inputs. for registration and regulation of operations of industries. The human resource is also not adequately skilled to support Furthermore, many industrial industrialization. The inadequate processes inherently pose serious skilled human resource is attributed environmental concerns such as to; few and inadequately equipped waste generated from raw materials, technical institutes, negative chemical inputs, and packaging attitude toward vocational materials. education, and limited linkages between academia and industry. Resulting from the above, there is slow growth of the industrial sector, In addition to the above, there has high mortality of enterprises, low been limited public investment and contribution to GDP, insufficient nurturing of industrial development employment creation, and low in strategic areas due to under- export earnings from the Industrial capitalisation of public investment Sector. and weak public institutions MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 15 2 POLICY VISION, MISSION, GOAL, OBJECTIVES, AND OUTCOMES The National Industrial Policy 2.2 MISSION is designed as a framework for achieving industrialization in Uganda in order to create employment, The Policy mission is to increase value addition to local accelerate sustainable industrial raw materials, increase export transformation through an of manufactured products, and increased developmental role increase sector contribution to GDP. of the State, reduced cost of production, and improved quality

2.1 VISION of manufactured goods.

2.3 GOAL The vision of the Policy is to build a fully integrated, competitive, high- value and productive industrial The Policy Goal is to ‘increase the sector in Uganda. manufacturing value-added as a percentage of GDP from 8.3% in 2018/19 to 16% in 2029/30’. 16 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES

2.4 GENERAL AND SPECIFIC POLICY OBJECTIVES The NIP has been designed to foster The specific objectives of the NIP growth of the Industrial Sector, are to: anchored on inspiring structural i. Increase public investment transformation with a principle and nurturing of industrial focus on four result areas, namely: development projects in strategic i. Increased value addition of local areas. raw materials and products ii. Increase and sustain the supply with comparative advantage for of quality raw materials for value social-economic transformation. addition. ii. Increased exports of iii. Develop and strengthen skilled manufactured products by human resource to increase facilitating industries to increase productivity and efficiency in the production and match market sector. demands in terms of both quality and quantity. iv. Accelerate development, use of research innovations iii. Increased employment in and adoption of appropriate the industrial sector through technologies in industry. establishment and promotion of industries that create large-scale v. Promote resource efficient and employment opportunities, environmentally sustainable ensuring inclusive growth and industrialization. sustainable development. iv. Increased adoption of environmentally sustainable technologies by the manufacturing sub sector. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 17

2.5 SELECTED PRIORITY INDUSTRIES The prioritization of industries infrastructure development to be supported under this projects, accessing and exploitation Policy is based on the following of opportunities in regional markets, criteria: employment creation, and greening the environment. The utilization of locally available selected priority industrial sectors materials, export potential, import include agro-processing industries, replacement and social inclusion. extractive processing industries, Further, consideration was based on and knowledge-based industries. alignment with other Government Under each, a three-tier criterion policies and strategies for increasing was used to identify specific agricultural productivity, supporting enterprises/products which will the road, railway, housing, energy, generate the highest impact. These information and communication are summarised in Table 2: Table 2: Prioritized industries for development Criteria Category Highest impact for Highest impact on Highest impact for employment import replacement export Agro-based Fruits, Coffee, Tea, Cassava, Cotton, Textile and Coffee, Tea, Cotton Industries Cotton, Bananas, Textile Apparel, Grains, Oil Textiles and & Apparel, Grains, Sugar seeds, Cassava, Sugar Apparels, Oil seeds, cane, Cassava, Dairy, cane, Cassava, Leather Sugar, Grains, Dairy, Leather and Leather and Leather products Leather and Leather products products Extractive Iron and steel, Oil and gas Iron and steel, Oil and gas Iron and Steel, based (LPG, synthetics, plastics (LPG, synthetics, plastics Oil and gas (LPG, Industries and petrochemicals), and petrochemicals), synthetics, plastics Cement, Salt and Fertilizers Salt, Cement and and petrochemicals), Fertilizers Cement and Fertilizers Knowledge Assembly of automobiles, Assembly of automobiles, Assembly of intensive electrical and electronics electrical and electrical and industries products, and manufacture electronics products, electronics products, of pharmaceuticals and manufacture of and manufacture of pharmaceuticals pharmaceuticals 18 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES

2.6 GUIDING PRINCIPLES The implementation of the Policy will well as facilitate exchange and be guided by the following principles: mentorship programmes with large companies. i. Transformative industrialization: The sector will be supported iv. Environmental sustainability: to embrace advancements in The manufacturing industries will technology required to increase be supported to adopt cleaner the level of value addition and and more efficient technologies. production of competitive Targeted programmes include products for domestic, regional promotion of cleaner production and international markets. practices, recycling of waste, waste disposal management, ii. Alignment and and resource (energy and complementarities: water) efficient management Implementation of this Policy will programmes. ensure that there is an alignment to national, regional and global v. Balanced and inclusive commitments and dispensations development: to which Uganda is a signatory. Government will develop and implement special incentives that iii. Gender equality: will promote spatial distribution Implementation of this Policy of industries in all regions of will ensure there are deliberate the country. Implementation investments for gender sensitive of rural industrial development industrial promotion. The programmes will use the Parish emphasis will be on advancing model, value addition processing schemes that provide equal facilities will be established opportunity for both men and to support farmers organized women in training, employment in cooperatives to undertake and promotion of incentives for processing of their commodities women and youth participation. into high value products to Government will prioritize and create employment and increase facilitate the growth of women household incomes. and youth owned enterprises as MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 19

2.7 ANTICIPATED POLICY OUTCOMES The outcomes of the Policy will be ix. Reduced ratio of manufactured realised over the ten-year period of products imported to total implementation and will include: imports from 63.2% in 2018/19 to 45% in 2029/30. vi. Increased industry sector contribution to GDP from x. Increased share of jobs from 27.1% in 2018/19 to 31.7% in manufacturing subsector to 2029/30. total formal jobs from 9.8% in 2018/19 to 15% in 2029/30. vii. Increased contribution of manufacturing to GDP from 15.4% in 2018/19 to 26% in 2029/30. viii. Increased ratio of manufactured products exported to total exports from 22.5% in 2018/19 to 46.8% by 2029/30. 20 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES 3 STRATEGIC POLICY INTERVENTIONS To achieve the goal of the Policy, Government undertakes to implement specific interventions under each Policy objective as stated below:

3.1 OBJECTIVE 1: INCREASE PUBLIC INVESTMENT AND NURTURING OF INDUSTRIAL DEVELOPMENT PROJECTS IN STRATEGIC AREAS Policy Statement: Government will spearhead the coordinated development of strategic industrial projects The following strategic interventions iv. Establish standards and will be implemented to achieve this guidelines for the development Policy objective: and management of various categories of parks, industrial i. Enhance the capacity of and business parks, science and Government institutions technology parks, and agro- that are mandated and/or processing parks to facilitate have functions to facilitate industrial development. industrialization. v. Develop the requisite ii. Strengthen the legal framework infrastructure to support to support establishment and manufacturing in line with regulation of industries. Uganda’s planned triangle growth corridors. iii. Build the capacity of local governments to provide vi. Establish and strengthen industrial support services in national quality infrastructure their localities. system (standards, metrology, conformity assessment and accreditation). MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 21 vii. Undertake strategic investment ix. Promote rural industrialization and promote Public Private programme through provision sector Partnerships (PPPs) in of value addition equipment key agro, mineral processing and training to producer-based and knowledge intensive cooperatives or organized manufacturing projects. groups. viii. Attract and facilitate both x. Strengthen the organizational Domestic Direct Investment and institutional capacity of the (DDI) and Foreign Direct Private Sector to drive growth. Investment (FDI) in the priority value chains for industrial development.

3.2 OBJECTIVE 2: INCREASE AND SUSTAIN THE SUPPLY OF QUALITY RAW MATERIALS FOR VALUE ADDITION Policy Statement: Government shall ensure sustainable supply of quality raw materials to meet the demands of manufacturing enterprises. The following strategic iii. Organize the artisanal and small interventions will be implemented miners into organized groups or to achieve this Policy objective: cooperatives and support them to implement good mineral i. Establish regional modern beneficiation practices. storage facilities in strategic locations to provide massive iv. Strengthen the capacity to storage of agricultural undertake mineral testing, commodities. certification, and trading. ii. Build capacity of the v. Undertake materials cooperatives/clusters and characterization (Research and agro-enterprises in effectively development for both agro and utilizing shared warehousing mineral raw materials) to enable and value addition product commercialization. infrastructure. 22 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES vi. Connect MSMEs to large implementation and quality scale production firms for assurance, post-harvest subcontracting. handling, storage and value addition (light manufacturing vii. Build capacity for traders technologies). especially SMEs through training and coaching at enterprise level in standards

3.3 OBJECTIVE 3: DEVELOP AND STRENGTHEN SKILLED HUMAN RESOURCE IN ORDER TO INCREASE PRODUCTIVITY AND EFFICIENCY IN THE SECTOR Policy Statement: Government shall increase as well as improve the skills and competencies of the human resources in the country to support industrial transformation. The following will be the main iv. Provide incentives to strategic interventions under this industrialists to support Policy objective: internship programs for students to acquire the i. Design and implement an necessary practical skills in industrial skills upgrading and industries. retooling programme ii. Facilitate mass-level skilling and training programs for youth, women, and informal sector manufacturing operators. iii. Institutionalize periodic meetings for sharing information and experiences among the industrialists and academia. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 23 OBJECTIVE 4: ACCELERATE DEVELOPMENT AND USE OF RESEARCH INNOVATIONS, AND ADOPTION OF APPROPRIATE TECHNOLOGIES IN INDUSTRY Policy Statement: Government shall promote the adoption and upgrading of technologies through strengthening industrial research, identification of technological needs, and provision of support to industry. Government shall execute the iv. Facilitate establishment and following strategic interventions to operation of Science and achieve the above Policy objective: Technology Parks and Business Incubation Centres to facilitate i. Facilitate acquisition of commercialization of research appropriate technologies for innovations. local industries producing products for import v. Promote local assembling and substitution and exports manufacture of Information, through establishment of a Communication, and fund, training and extension Technology (ICT) products, services. automobiles, and medical and veterinary equipment products. ii. Promote development and utilization of indigenous/local vi. Undertake applied research technologies. and innovation on sustainable consumption and production iii. Develop and maintain strategic bi-lateral and multi-lateral to ensure resource efficiency. Industrial Development Cooperation Agreements in technology transfer and adoption. 24 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES OBJECTIVE 5: PROMOTE RESOURCE-EFFICIENT AND ENVIRONMENTALLY SUSTAINABLE INDUSTRIALIZATION Policy Statement: Government shall promote the adoption of resource-efficient and cleaner production practices to reduce the negative impacts of industrial operations to the environment. The following will be the main iii. Promote inclusive, climate- strategic interventions under this resilient, and low-emission Policy objective: industrial development through capacity building of i. Upscale the adoption of industrialists and issuance of resource-efficient and green carbon footprint certificates to technology practices in support industrial sector move industries. toward carbon neutrality. ii. Facilitate mainstreaming and adoption of international and national environmental management practices and standards in industries. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 25 4 LINKAGE WITH OTHER POLICIES AND CROSS CUTTING ISSUES

4.1 POLICY ANCHORING TO OTHER POLICIES, LAWS AND STRATEGIES This Policy is nested within the Innovation Policy (2009), Energy aspirations of the Vision 2040, Policy (2002), National Mining and implemented through the 5-year Mineral Policy (2018), National national development planning Investment Policy (2019), National framework under the theme Oil and Gas Policy (2008), Investment “Sustainable Wealth Creation, Code Act (2019), National Agriculture Employment and Inclusive Growth”. Policy (2014), Local Economic This Policy is also in line with Development Policy (2014), the National Development Plan National Employment Policy (2011), III that focuses on sustainable Education Policy (1999), National industrialization for inclusive Land Policy (2007), National Climate growth, employment and Change Policy (2015). Business, sustainable wealth creation. Technical, Vocational Education and Training (BTVET) Act (2008), National In addition, the NIP complements Planning Act (2010), the National existing regulatory frameworks Physical Planning Standards and including: National Trade Policy Guidelines (2011). This Policy is also (2007), National Cooperatives Policy aligned with the Import Substitution (2011), National Standards and Action Plan developed by National Quality Policy (2012), Buy Uganda Planning Authority (NPA) as well Build Uganda Policy (2014), National as the post COVID-19 Economic MSMEs Policy (2015), National Recovery Strategy (2020). Environmental Management Policy (1994), National Water Policy (1999), Further, the Policy has been aligned National Science, Technology and to the East African Community 26 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES Industrialization Policy 2012-2032, with Uganda’s obligations to meet the COMESA Industrialization the Sustainable Development Goals Strategy and the African Union’s (SDGs) 2030 targets. The alignment Action Plan for Accelerated Industrial to these frameworks is meant to Development for Africa (AIDA). synchronise efforts to achieve the At the global level, key strategic desired industrial Policy outcomes. interventions of this Policy are in line

4.2 CROSS CUTTING ISSUES The issues detailed below cut across 4.2.2 HIV/AIDS various aspects of implementation The implementation of this Policy of this Policy. Concerted efforts will will complement the comprehensive be made to embed these aspects in efforts by Government to ensure that the implementation of this Policy all industrial establishments develop and they shall be included in the and implement favourable policies Policy M&E framework to ensure for prevention and management of their successful implementation and HIV/AIDS. results.

4.2.3 Human Development and

4.2.1 Occupational Health and Inclusive Growth Safety Through the process of spatial For the successful implementation distribution of industrial of this Policy, it is important establishments, Government shall that the legislation governing address inclusive development Occupational Health and Safety around the country. This process will in industrial establishments is further enhance the quality of life enforced. Emphasis will be put on and standard of living in these areas. sensitization and provision of safe work environment in industrial establishments. In the event of accidents occurring, workers’ compensation should be provided. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 27 5 IMPLEMENTATION ARRANGEMENTS Government shall adopt a stepwise and evaluate implementation of approach to align various plans and agreed resolutions by IMICC. resources to implement the Policy in the immediate, intermediate and The Ministry responsible for long-term periods. Implementation Industry shall coordinate the works will be pursued through effective of the IMICC. Government shall execution of two 5-year National also collaborate with the Private Industrial Sector Strategic Plans. Sector, Civil Society, Development Partners and all relevant non-state At the apex of implementation, actors in the implementation of Cabinet shall provide strategic this Policy. In addition to IMICC, the direction for Uganda’s roles and responsibilities of various industrialization agenda. In order stakeholders are outlined in Table 3 to enhance effective and cohesive below. coordination of the National Industrial Policy implementation, an Inter-Ministerial Manufacturing Industry Coordination Committee (IMICC) chaired by the Minister responsible for Industry shall be established. Implementation of the policy objectives will be multi- sectoral and cut across different Ministries Departments and Agencies (MDAs) and therefore, the IMICC shall provide the coordination and consultation forum. The Office of the Prime Minister shall ensure harmony and coherence in policy and strategy implementation. The Office of the President will monitor 28 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES Table 3: Core roles and responsibilities of implementing partner institutions INSTITUTION ROLES ACTION AREAS/ INTERVENTION Ministry Spearhead and • Chair and coordinate the works of IMICC. of Trade, coordinate the • Develop Action Agenda, Guidelines and Industry and implementation of the operational arrangements/Terms of Cooperatives National Industrial Reference for the IMICC. Policy. • Utilize the Presidential Investors Round Table, Presidential Economic Council and Promote Public-Private PACOB to support implementation of the Investment in Industrial Industrial Policy. Development projects. • In collaboration with MoFPED, mobilize development partners to support industrial Engagement in sector development. Industrialization • Expedite drafting of key industrial support initiatives at regional legislation. and international level. • Inspect, monitor and periodically report on all aspects of Policy implementation. Coordinate • Compile public procurement projections implementation of and share the information with the BUBU policy/local manufacturers to ensure timely planning. content. • Promote innovation, value addition, and exploitation of local materials. • Build capacity of Local Governments to support industrial development. Implement a trade • Build institutional capacity for market policy regime intelligence, bilateral and multilateral trade supportive to industrial negotiations to guide favorable terms for development. Uganda’s industrial sector development. • In collaboration with MFPED, ensure a CET regime and incentives that supports manufacturing sector development. • Enhance export promotion through exhibitions and trade shows. • Ensure effective and timely dissemination of strategic market information. Support cooperatives • Nurture cooperative societies to facilitate development. raw material supply and invest in light manufacturing projects. Office of the Ensure harmony and • Monitor and evaluate proceedings of the Prime Minister coherence in policy IMICC. implementation. • Promote and facilitate cooperation and collaboration among MDAs. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 29 INSTITUTION ROLES ACTION AREAS/ INTERVENTION Parliament Enact laws supportive • Review and strengthen the legal framework to industrial for the industry sector. development, and • Appropriate adequate funding for priority appropriate adequate industrial interventions and projects. resources towards the sector budget. Office of the Provide overall • Chair the existing Presidential dialogue President leadership in public platforms to prioritize industrial sector policy management development. and good governance. • Support National Industrial Policy dissemination. Champion the • Mobilize the population to support and Industrialization participate in policy implementation for Agenda. national development. • Monitor and evaluate performance of the Industry Sector Strategic Plan. Ministry of Mobilize, and ensure • Ensure sufficient budget appropriation to Finance, timely disbursement the sector. Planning and of funds for the • Mobilize development partners to support Economic implementation of the industrial sector development. Development National Industrial Policy and Strategy. Guarantee a stable • Implement a monetary policy appropriate and conducive for industrial development and keep macroeconomic inflation, exchange rates and interest rates environment. at optimum levels. • Provide the appropriate fiscal incentives to support local value addition. Ensure sustainable • Facilitate dedicated lines of credit through delivery of access to financial intermediaries and private equity affordable financial firms to offer preferential interest rates for services for Ugandan industrialists. industrialists. • Develop capital markets as a financing option for industrial development. • Capitalize Uganda Development Bank. • Capitalize Uganda Development Corporation. • Capitalize Micro Finance Support Centre. Others. • Facilitate Public Private Partnerships (PPPs). • Develop incentives for establishment and dispersion of industries across the country. 30 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES INSTITUTION ROLES ACTION AREAS/ INTERVENTION Ministry of Ensure adequate • Facilitate the acquisition of climate change Agriculture, production and supply adaptation technologies that enhance Animal Industry of high quality agro raw resilient, productive and sustainable and Fisheries materials necessary for agricultural systems. value addition. • Establish measures to reduce post-harvest losses in agriculture output. • Develop and implement dedicated agricultural extension services and business skills development programmes in production areas. • Promote bulk handling and supply of agricultural products through improved storage facilities. • Undertake quality improvement in the agricultural raw material supplies through the adoption of GAPs, traceability guidelines, SPS regulations. Ministry Eliminate supply side • Explore and quantify strategic minerals of Energy constraints for mineral countrywide. and Mineral based industries. • Support acquisition of technologies to Development exploit available minerals. • Facilitate beneficiation of extracted mineral resources. • Build institutional capacity for testing and standardization of minerals. Ensure affordable and • Strengthen the national energy grid and accessible power to expand power connections to industrial industries. establishments. Promote local content • Promote procurement of locally in Energy Infrastructure manufactured products in infrastructure projects projects. • Share procurement projections with manufacturers to ensure timely planning. Ministry of Provide efficient • Link the road, railway, water, and air Works and transport infrastructure transport systems to productive sources Transport to support of the economy including designated manufacturing in Industrial parks and Export Processing resource areas and Zones. access to markets. Promote local content • Promote procurement of locally in Infrastructure manufactured products in infrastructure projects. projects. • Share procurement projections with manufacturers to ensure timely planning. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 31 INSTITUTION ROLES ACTION AREAS/ INTERVENTION Ministry of Support industrial skills • Equip tertiary, vocational, research and Education and development. technological institutions with laboratories Sports and workshop equipment to enhance practical skills acquisition. • Carry out needs assessment to inform manpower training. • Review education curricula to tailor academic work towards industrial labour needs. • Review and strengthen the Industrial Training Act. • Orient academic scholarships to address practical industry needs. • Establish an effective mechanism for coordinating industrial training programs. Ministry of Support technology • Facilitate establishment and Science, development and operationalization of science and Technology and upgrading in the technology parks and business incubation Innovation industrial sector. centres. • Strengthen the initiatives and linkages Enhance between technology developers and commercialization of industrialists. R&D from Academia. • Facilitate coordination of creativity and innovation ecosystem. • Facilitate commercialization of research and development. • Create awareness of appropriate technology transfer, adoption and upgrading. Ministry of Promote occupational • Ensure that Occupational Safety and Gender, Labour health and safety in Health, labour laws and regulations, and Social industry. gender, cultural and equity concerns are Development mainstreamed into all Industrial operations. Enforcement of labour • Carry out regular statutory and routine laws and regulations inspections to ensure Occupational Safety within the industrial and Health in industrial establishments. sector. Ministry of Ensure industrial • In collaboration with MTIC, implement Water and development is strategies aimed at emission reduction and Environment balanced with pollution control in the Industrial Sector. environmental • Promote waste recycling including plastics. conservation • Create awareness on good waste and sustainable management practices. management. Provide sufficient • Expand water connections to industrial water for use in Uganda establishments. industries. 32 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES INSTITUTION ROLES ACTION AREAS/ INTERVENTION Ministry of Support industrial • Facilitate access to land for industrial Lands, Housing land acquisition for establishments. and Urban industrialists. • Develop physical plans that ensure peaceful Development coexistence of industries and human settlements. Ministry of Facilitate improvement • Strengthen local producers’ capacity to Health in the pharmaceutical meet WHO-GMP and WHO prequalification industries subsector. standards. • Promote local content in procurement of pharmaceuticals, Personal Protective Equipment and other medical sundries. Mainstreaming of HIV/ • Undertake awareness programs on HIV/AIDS AIDS in the industrial in industry establishments and encourage sector. mainstreaming HIV/AIDS control activities into their development plans. Ministry of Increase access • Facilitate establishment of stable internet Information to ICT services for connection and ICT infrastructure for Technology, industrialists. manufacturing establishments including in Communication industrial parks. and National Guidance Ministry of Support enactment • Support drafting of industry related Bills for Justice and of industry support submission to Cabinet and Parliament. Constitutional legislation. • In collaboration with MTIC and MoSTI Affairs promote intellectual property protection among industrialists. Ministry of Local Deliver Government • Inculcate a mindset change among citizens Government services to the to approach primary production from a grassroots. commercial orientation. • Register industrial establishments at local Mobilize local level. population to embrace • Promote production of quality inputs for industrialization. industries. Ministry of Integrate industrial • Facilitate attraction of foreign investors. Foreign Affairs development agenda • Establishment and negotiation of in the country’s Foreign technology transfer agreements and access Policy. to foreign markets. Ministry of Keep peace, law and • Provide security to industrial Internal affairs order. establishments. Regulate and facilitate • Process and regulate issuance of work movement of industrial permits to non-Ugandan workers including workers in and out of expatriates. the Country. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 33 INSTITUTION ROLES ACTION AREAS/ INTERVENTION Ministry of Support development • Support development of industrial Defense and of industrial infrastructure through the commercial arm Veterans Affairs infrastructure and the of the armed forces (National Enterprise defense industry. Corporation). • Undertake investment in the arms/ defense industry. • Provide security and logistics for cargo to volatile regional markets. Ministry of Coordinate • Follow up and leverage the implementation East African implementation of EAC of the EAC common market protocol. Community industrialization policy, • Support development and enforcement Affairs trade investments of measures to eliminate non -tariff and and regional technical barriers to trade. standardization • Support the harmonization and recognition programme. of standards and conformity assessment procedures. National Develop guiding • Integrate Industrial Sector activities in the Planning principles and National Development Plans and Strategies, Authority strategies for sector Budget, Medium Term Expenditure prioritization in the Framework and other national planning National Development frameworks. Plan. • Undertake studies to support to the implementation of the industrial policy. • Track progress of industrial sector performance against its expected contribution to NDP. Uganda Attract investment for • Allocate space to investors in the Investment manufacturing. established industrial and business parks Authority Provide one stop centre across the country. for investment ate • Undertake measures to facilitate investment investments. in priority value chains as stipulated in this policy. National Facilitate compliance • Coordinate and hasten the processes of Environmental to environmental environmental impact assessments for Management standards and industrial activities. Authority regulations in the • In collaboration with MTIC, carry out industrial sector. environmental monitoring and audits of industrial activities. • Build capacity of industries to comply with environmental standards and regulations. • Monitor compliance of industrial activities with environmental guidelines. 34 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES INSTITUTION ROLES ACTION AREAS/ INTERVENTION Uganda Implement a tariff • Sensitize industrialists on tax obligations. Revenue regime conducive • Enforce Common External Tariff (CET). Authority to industrial • Control smuggling of manufactured development. products to protect local industries. • Implement the Digital Tracking System (DTS) for manufactured goods. Uganda Bureau Facilitate data • Collect, analyze and disseminate data on of Statistics collection and industrial sector performance. dissemination. Uganda Improve road • Build and maintain the national road National Roads infrastructure. infrastructure to reduce the cost of doing Authority business/ ease movement of goods and people. Local Mobilize local • Register industrial establishments at local Governments population to embrace level. industrialization. • Provide information/statistics on industrial establishments operating in the local governments. • Organize local communities to supply quality raw materials and services to industrial establishments in their areas. • Provide physical infrastructure, including roads, water supply, and waste management within their jurisdictions. • Mobilize local participation in industrial development projects and programs. • Support monitoring and evaluation of industrial sector activities. Uganda Provide basic and • Establish and operate Technology Industrial applied research Development Centres. Research focusing on new • Promote technology transfer and business Institute product development incubation in various industrial value chains and process linked to natural resource exploitation. improvements in • Provide industrial skills training industrial value chains. programmes targeting the priority products for industry development. National Council Facilitate the • Improve or streamline national science and of Science and development and technology policy environment to foster Technology incorporation of scientific and technological innovation. science and technology • Strengthen national system for research, and innovation in the product development, technology transfer national industrial and intellectual property management. development process. • Increase public understanding and appreciation of science and technology. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 35 INSTITUTION ROLES ACTION AREAS/ INTERVENTION Uganda Free Facilitate development • Establish and service economic free zones Zones Authority and management of and export processing zones. free zones. • In collaboration with MTIC and MoSTI Promote technology adoption of manufacturing firms in free zones. • In collaboration with MoWE, MTIC, Promote good waste management Practices in free zones. Private Sector Support improvement • Undertake policy advocacy for the Foundation of private sector development of the private sector. Uganda competitiveness. • In collaboration with government institutions, support capacity building of the private sector. Uganda Promote Private sector • Identify and provide information on Manufacturers investment in strategic emerging (sub sectors) that require Association industries. Government support to attract Private sector investment. • Participate in government taskforces on formulation of policies and regulations. Promote self-regulation • Promote formation of sub-sector and advocacy. associations. • Lobby for friendly and conducive fiscal regime for the manufacturing sector. Others. • Promote investments in value addition. • Promote trade fairs and exhibitions. Development Collaborate with • Finance priority projects to promote partners GOU to foster rapid industrial development and ensure inclusive industrial sector growth. growth. • Provide technical assistance on Industrial Development. • Share information on best practices to industry players. Civil Society Collaborate with • Undertake policy research to Organizations GOU to foster rapid inform industrial policy making and industrial sector implementation. growth. • Partner with GOU on development and implementation of industrial development projects. • Awareness creation on industrial development and community mobilization. 36 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES iNSTiTUTiON ROLES ACTiON AREAS/ iNTERvENTiON Academia Undertake scientific • Produce the labour force suitable for research, training and employment in the industry sector. industrial innovations. • Provide industrial research and technology development infrastructure like laboratories and student incubation facilities that support industrial product development and innovations. Uganda Promote and facilitate • In collaboration with MTIC and MoFPED, Development Government’s develop and implement a business strategy Corporation investment in industrial to increase capitalization from 500Billion (UDC) and economic 2021/22 to 5 Trillion by 2029/30. development projects. • Invest in strategic sectors to promote import substitution, exports enhancement, and wealth creation. • Leverage partnerships and networks to optimize resources for industrial development. Uganda Develop and enforce • Fast track development and dissemination National Bureau standards to enhance of standards. of Standards the competitiveness of • Increase testing capacity and reduce (UNBS) manufactured products turnaround time for issuance of test reports. in domestic and • Decentralize and leverage partnerships with international markets. other Government institutions in promotion of standards. • Stop importation and local manufacture of substandard and counterfeit goods. • Support MSMEs to adopt and implement national standards. Management Promote enterprise • Provide training, advisory and Training and development and entrepreneurship development services to Advisory Centre sound management manufacturing enterprises. (MTAC) practices. • Develop training programmes for developing skills in priority sectors of NIP. Media Facilitate public access • Produce and disseminate programs and to information on media articles that rally public appreciation Uganda’s industrial of, and participation in industrial sector sector. development. • Support monitoring of industrial sector development initiatives. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 37 6 MONITORING AND EVALUATION FRAMEWORK Industrial development is a multi- Information System (IDMIS) to sectoral undertaking that requires periodically report on performance. sustained and comprehensive In addition, the 5-year National reporting on Industrial Sector Industrial Sector Strategic Plan has performance. Working with the laid out a Monitoring and Evaluation key public sector stakeholder (M&E) framework with output and institutions, the Ministry responsible outcome indicators against which for Industry shall propose key performance will be assessed. The performance indicators (KPIs) different MDAs will also undertake for measuring the level of monitoring of the complementary implementation of the Policy. These interventions within their sectors. KPIs will be recorded in an Industrial Development Management 38 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES 7 COMMUNICATION STRATEGY In line with the Government In addition, national and district Communication Strategy (2011), level staff will be supported concerted efforts will be made to to popularize this Policy as its ensure that this Policy is understood implementation is executed and and supported by stakeholders at provide feedback through the all levels so that each appreciate relevant reporting mechanisms. their role in its implementation. The Through various partnerships, Ministry responsible for Industry the Ministry responsible for shall ensure that all concerned Industry shall support knowledge parties are made aware of the Policy exchanges to expose international vision, mission, strategic objectives, best practices, innovations and and its desired outcomes. To this new developments to Ugandan end, this Policy will be published industrialists. These best practices and widely disseminated to will be communicated to provide stakeholders. Other appropriate learning points and references to pathways to communicate this inspire industrious works. Policy will include sustained fora for dialogue, talk shows on mass media (with an emphasis on local FM radios and TV stations), pull-outs from the national newspapers, bulletins and journals, community meetings, district and national workshops, as well as social media platforms. MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES | 39 8 FINANCING MECHANISMS Government will strengthen fiscal Government will also endeavour planning, put in place budgetary to establish additional arrangements and mechanisms funding mechanisms to spur to mobilize resources and Industrialization. These include development partnerships and debt from Multilateral Development international financing institutions Banks (MDBs), equity from to meet the requisite financing Development Finance Institutions needed for the implementation of (DFIs), Grants and Impact Investors, this Policy. Aware of the enormous Venture Capital, Bond Issuances resource requirement to implement through Uganda Security Exchange, this Policy over the next decade, Dividend and Interest Reinvestments Government will pursue several and Subsidiary Divestitures, and revenue collection measures to private investors through Public maximise the National Budget Private Partnerships. resource envelope which in turn will be allocated to the stakeholder MDAs implementing various aspects of this Policy. These include: i. Tax collections. ii. Provision of industrial financing through UDB. iii. Strengthening and Capitalization of the Uganda Development Corporation (UDC). iv. Grants and Loans (including concessional loans) from Development Partners. 40 | MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES Ministry of Trade, Industry and Cooperatives 3rd- 6th Floor, Farmers House | Plot 6/8 Parliamentary Avenue P. O Box 7103 Kampala, Uganda mintrade@mtic.go.ug | www.mtic.go.ug