In a bid to understand the dynamics of Uganda’s manufacturing landscape, new reports have shed light on critical challenges hindering the sector’s growth and potential solutions to drive progress.
According to recent findings, Ugandan manufacturing enterprises are operating at only 54.4 percent of their capacity, signaling a significant underutilization of resources and untapped production potential.
The reports, unveiled during a dissemination workshop by the Private Sector Foundation Uganda (PSFU) and the Mastercard Foundation, revealed that many manufacturers are grappling with substandard quality, limited availability, and inconsistency of locally sourced raw materials. As a result, they are compelled to import raw materials, further adding to production costs and reducing competitiveness.
The lack of effective demand for locally manufactured goods exacerbates the situation, leading to underutilized production capacity among manufacturing firms in Uganda. High production costs, taxes, macroeconomic challenges, and logistical hurdles further impede the sector’s growth trajectory.
Electricity presents a significant challenge, with frequent power outages disrupting production and forcing some firms to rely on costly generators. Additionally, logistical inefficiencies and high transportation costs pose barriers to manufacturers, affecting their competitiveness in both regional and global markets.
In response to these challenges, stakeholders, including PSFU and the Uganda Manufacturers Association (UMA), have formulated a series of recommendations aimed at stimulating demand, reducing production costs, addressing electricity issues, streamlining logistics, and facilitating access to finance.
The workshop emphasized the importance of evidence-based research in informing policy formulation and advocating for the manufacturing sector’s interests. Collaborative efforts between the private sector, public sector, academia, and development partners are deemed essential in addressing critical issues affecting manufacturing and propelling its growth agenda.
As Uganda actively participates in regional economic integration initiatives, the manufacturing sector holds immense potential for employment creation and poverty reduction. With concerted efforts and strategic interventions, Uganda can unlock its manufacturing potential and pave the way for sustainable economic development and industrialization.
