How Free Zones are reducing manufactures cost of production, stimulating market for local products supplies in Uganda.
Drake Nyamugabwa
In 2014, Uganda enacted the Free Zones Act to create opportunities for export oriented investment and job creation.
Free zones in Uganda over time have catalysised huge investments for export manufactures while taking the various incentives that accrue from operating in them to satisfy the available local, regional and global market.
Uganda Free Zones Authorities (UFZA) have established and supported both Public and private free zones and others still under construction including Entebbe international airport free with 5acres under construction, Hoima, Butiaba, Jinja among others
During media meeting held on Tuesday 9th August 2022 at Imperial Royal hotel, the Executive Director UFZA, Hez Kimono Alinda highlighted the contributions and enormous benefits available in free zones in Uganda for export oriented production that are part of the solution to the current economic situation including tax incentives, the backward linkages, large scale production, bulk utility connectivity like electricity, water, internet, industrial shades, road infrastructure among others.
“As we integrate, trade is more regional, value added, there is need to increase self life of product, baranding, certification, to meet the requirements of the market. All these must be done under free zones set up for this purpose” he said
He said there is need to boost investment that will provides backward linkages to the household levels including farmers to create demand and market for their products that he said will improve incomes and livelihoods
“At an industrial scale, free zones create manufacturing necessary to promote market for farmers and household products and enable them improve income, commercial availability services, trading opportunities and general improvement of the standards of living” he said.
The Director, Business Development and Investment Support, Rebecca Nalumu said that there have an increase in exports from industries in free zones contributing to Uganda’s foreign earnings from products including gold, plastics, services among others.
She however said that though there was tax levy imposed on the gold industry affecting export earnings in the last financial year, there are engagements with stakeholders to harmonize the linkages.
“We are working with ministry of energy to enhance registration of local gold artisans to increase supply the gold refineries in free zones to minimize importation of the raw materials” she said.
Uganda Free Zones Authority is uncored under the regional customs union protocol of common markets.
Business activities permitted in export processing free zones includes; manufacturing and commercial services for agriculture, food products, basic metals among others.
New entrants to the free zones pay a fee of $5000, for operators they pay a fee of $1000 for the first 5 years while application is $250 all saved to the consolidated fund.
