WHY INDUSTRIAL PARKS ARE KEY FOR CREATION OF JOBS AND THE FAST DEVELOPMENT OF UGANDA INTO MIDDLE INCOME COUNTRY BY 2020


  1. What’s the mandate of UIA in as far as regional distribution of investments in Uganda is concerned?

Uganda Investment Authority (UIA) is the primary Government Agency mandated to coordinate, encourage, promote and facilitate investments in Uganda. UIA also advocates for investment enabling policy to Government on behalf of the private sector in order to create a competitive business environment in Uganda. With its budget constrained resources UIA is mandated to promote investment across the whole country.

Under the national Industrial Parks Development Strategy, UIA will establish 23 Industrial & Business Parks, 22 of which are the gaezetted Industrial Parks; plus four (4) Science, Technology and Industrial Parks across the country.

  1. How far have you implemented the President’s directive to develop industrial parks across the country?

Government of Uganda’s 27 national Industrial Parks Development Strategy includes 22 gazetted Industrial & Business Parks around the country. Eight (8) of these including the Kampala Industrial & Business Park (KIBP), Namanve; are at different stages of development. Fourteen (14) of the 22 gazetted Industrial & Business Parks are not yet operational.

We have prioritized six (6) Industrial and Business Parks for establishment and operation in the 5-year period of our Strategic Plan, 2016-2021; plus four (4) regional Science, Technology & Industrial Parks. The six (6) priority IBPs including the KIBP, Namanve are in the Districts of Nakasongola, Buliisa, Arua, Gulu and Lira.  The Kiira Motors Corporation (KMC) is the lead tenant with 100 acres allocated in the Jinja Industrial and Business Park (JIBP).

The four (4) regional Science, Technology & Industrial Parks will be located in Kyankwanzi District for Central Uganda; Kamuli District for Eastern Uganda; Pakwach/Nebbi District for Northern Uganda; and Rubirizi District for Western Uganda.

All the Business, Science, Technology and Industrial Parks are being established through UIA which is responsible for: identifying the land for the location of industrial or business parks; acquiring land for the establishment and development of industrial parks; commissioning feasibility, environmental and other studies and surveys on the land identified for the location of industrial parks; demarcating, parceling and allocating the acquired land to investors in a transparent manner; providing amenities such as electricity, roads and  water in the industrial parks sites. Others are  marketing and branding the industrial parks;  monitoring and evaluating the performance of the industrial parks; coordinating the other stakeholder institutions to provide support to the industrial parks; providing accountability for all funds received and disbursed; and ensuring proper management of the parks.

 

  1. What is the purpose for these Industrial Parks?

Industrial Parks are specifically designed industrial spaces which are well serviced with dedicated industrial-load electricity supply, roads, railway, fibre-optic internet and water, etc. As such, Industrial Parks enable quick set-up of factories and industries. Hence, Uganda’s national Industrial Parks Development Strategy as articulated in the UIA Strategic Plan 2016-2021are will support Uganda’s drive for accelerated industrialization in 2016-2021.

  1. How many have been constructed and where?

Government has gazetted 22 Industrial Parks with eight (8) under development at different stages, namely: (i) Namanve Industrial & Business Park (KIBP) with Bweyogerere and Luzira Industrial Parks are in Kampala; followed by (ii) Jinja, (iii) Kasese, (iv) Soroti, (v) Karamoja/Moroto, (vi) Mbale, (vii) Mbarara SME, and Masaka Industrial & Business Parks.

The fourteen (14) gazetted but not yet developed and therefore non-operational Industrial & Business Parks are in (i) Luwero, (ii) Nakaseke, (iii) Nakasongola, (iv) Rakai, and (v) Mubende Districts in Central Uganda; in (vi) Iganga and (vii) Tororo Districts in Eastern Uganda; in (viii) Gulu, (ix) Arua and (x) Lira Districts in Northern Uganda; and in (xi) Bushenyi, (xii) Kabale, (xiii) Hoima and (xiv) Fort Portal/Kabarole Districts in Western Uganda.

In Central Uganda within the Kampala Industrial Business Park (KIBP) – Namanve, twenty (28) industries are currently in operation, directly employing 11,000 Ugandans within the Park. Eighty two (82) investor projects have commenced construction in the KIBP and have created an additional 17,000 indirect short term contract/ technical jobs during the construction period.

150 investors are still clearing their paper work in form of environmental impact assessment, architectural designs, land titling, soil tests as well as hydrological tests. Twelve (12) investors have been allocated land in Luzira Industrial Park (64 acres) and nine out of these are operational. There are nine investors within the Bweyogerere Industrial Estate (50 acres).

In Eastern Uganda, roads have been opened in the Soroti Industrial and Business Park (219 acres) and land allocation is ongoing. Nine (9) companies have been allocated industrial plots so far, including Teso Fruit Famers Association allocated 5 acres for a fruit processing plant; and Uganda Free Zones Authority (UFZA), which was allocated land for establishing a free zone. In Mbale the 619 acre industrial business park land is still encumbered by squatters and the exercise of compensating squatters is on-going. The 182 acre Jinja Industrial and Business Park site has Kiira Motors Corporation (KMC) as the lead tenant allocated 100 acres to set up an assembly plant for the Kiira Electric Vehicle Project. It also has UEDCL allocated land to set up a concrete poles manufacturing plant, among others, as well as UFZA.

In Northern Uganda, the Master Plan and Environmental Impact Assesment for the Moroto Industrial & Business Park (417 acres) site are complete.

In Western Uganda, the Master Plan and engineering designs for Kasese Industrial and Business Park (216 acres) are complete. UIA is looking for investors to fill the park. Already UFZA has been allocated land as well for another free zone. In the Mbarara SME Park (12 acres), we have 41 workspaces of approx. 60 sq metres in 5 blocks to cater for small and medium scale enterprises within the western region. At the moment 37 workspaces are occupied.

Apart from industrial parks, UIA has also acquired agricultural lands for large scale commercial farming. To date there are 20 sq. miles in Masindi –Kimengo Sub County, 84 acres in Lukali Goli, Buikwe District,  10 sq.miles in Kaweri-Mubende and 20 acres in Kasangati, which have been allocated to investors for large scale agriculture. The 59.6 Ha in Kashari Land has also recently attracted a vibrant women based investment group who with support from European donors is setting up a demonstration model farm.

  1. How will these parks benefit the Local and foreign Investors

Ideally, well-serviced Industrial Parks with proximity and easy access to markets are supposed to be incentives for domestic entrepreneurs and foreign investors to set up their factories and industries for value addition. These mean job creation as direct benefits with other spin-off benefits such as urbanization and transformation. This should lead to economic development of the country.  The local investor who is unable to access increasingly expensive land has cheaper subdivided land avaibale locally. The foreign investor normally has no interest I n owning land. That burden is now removed for him to get on with his core business.

 

  1. How much funding are you expecting from government to implement this national program?

Total investment funding for completion and operation of all the 27 Industrial & Business Parks all over the country is projected at U Shs. 56 trillion. These include building and machinery for the projected 2000 industries with the flagship KIBP alone accommodating industries worth 11 trillion shillings. And infrastructure development costs in the flagship KIBP Namanve alone are projected at Ushs.500 billion, yet Government has been giving UIA only U Shs. 5 billion annually for development of all Industrial Parks in Uganda.

On a good note, however, completed and operational factories and Industries in all the 27 Industrial Parks are projected, on average, to pay taxes worth 4 trillion shillings per annum at full capacity by the year 2021! There is therefore need for Government to scale up funding as well as explore alternative financing strategies to implement the proposed national Industrial Parks Development Strategy for Accelerated Industrialization of Uganda.

  1. How are industrial parks different from Free Trade Zones? Isn’t this a duplication of services?

Industrial Parks are serviced industrial spaces where investors can implement their planned projects and are liable to the required taxation whereas free zones are special economic zones where investors can manufacture, handle, land or re-export goods without any tax implications, provided more than 80% of their goods are for export outside Uganda.

  1. How are you coordinating with other government agencies to ensure that all the necessary services like water, electricity, roads, internet are available in the new industrial parks?

All those services mentioned are delivered by different government entities, with which UIA has to collaborate to bring services to the parks. UIA is engaging Government utility providers such as UETCL, NWSC, NITA-U and UNRA to mainstream industrial parks servicing in their operational work plans of 2017/18.  Additionally, UIA is the champion of Team Uganda which comprises 30 agencies mainly from government that handle investors.

  1. What are the major challenges have you encountered while implementing this program and how have you resolved these obstacles ?

Lack of adequate infrastructure in the park is the biggest hindrance and has affected the development pace of investment projects in the industrial parks. This is especially worse in the rainy seasons where the murram roads become impassable and the drainage challenges become visible. The 33Kv power is inadequate for the heavy investors, hence the need to upgrade to 132KV. The water pipes also need to be upgraded for water consuming factories. Some roads are still completely unopened and require huge resources given the terrain of the industrial park.

 

Government is pursuing various funding options including Private Public Partnerships with entities that have expertise in the area of industrial park development. There is also the issue of squatters. Whereas UIA holds freehold title to the land gazetted by Parliament and land, a number of private persons have come up claiming ownership rights over KIBP land and elsewhere. Several squatter families still existent in the UIA and plans to evict them are underway.

A number of investors have expressed frustration over the process of surveying and acquisition of deed plans which is very slow, cumbersome and affects the pace of development. It is hoped that the introduction of the Land Information System will hasten the speed of the transactions. The environmental impact assessments have been taking a long time, however, we are yet to see improvements by NEMA, which has put systems in place to enable them to handle Industrial Parks EIAs within 2 days

  1. How many Ugandans do you think will be economically empowered by this program and how ?

At Full capacity, the industrial parks development project will directly and indirectly employ 690,000 Ugandans hence solving the unemployment problem in Uganda today with its associated effects such as poverty, disease, violence, riots and general insecurity. The projected 2000 industries will absorb over half a million people directly with KIBP – Namanve alone employing 200,000 Ugandans in its 280 industries while the other industrial parks cumulatively employ 300,000 Ugandans in the 1700 projected industries.

Already several large scale mass employment investment projects are operating in Namanve such as Roofings Limited valued at 250 million dollars is employing 900 Ugandans already, Century Bottling Ltd with a total investment value of 100 million dollars is employing 500 Ugandans, Interior Technologies (200 employees), Kyagalanyi Coffee (150 employees), FOL Logistics (150 employees), Namanve Industries Ltd (150 employees), Three ways shipping ltd 145 employees, Roke Telecom Ltd (69 employees), Orion Transformers (50 employees), Crane Paper Ltd  (200 employees) and many others.

Through the construction and development phase other high skilled jobs will be created for over 8000 professionals including the architects, land and quantity surveyors, civil engineers, urban planners and environmental practitioners. Another 150,000 semi-permanent or casual jobs will be created for the uneducated sector through provision of casual labour during the construction phase.  The multiplier effect to be created through products sales, marketing and distribution estimated at 20,000 additional field jobs. This puts the total employment capacity at 690,000 Ugandans by the year 2021.

 

  1. Talk about, SME development, Youth apprenticeship programs, entrepreneurship and technical skill trainings since they also follow in your mandate

UIA began a strategic focus on SME development close to six years ago when an SME Division was set up.  Through the SME Division, UIA has trained close to 20,000 SMEs spreading in 80 districts on entrepreneurship. We have also conducted hands-on technical skill training for value addition reaching close to 1000 small business owners. There are 16,000 SMEs profiled in the UIA database and over 200 youth supported under the Youth Apprenticeship Programme. Regional balanced development is very important to Uganda’s economy and it is in that vein that UIA has revived the District Investment Committees (DICs) in most districts in an effort to harness investment opportunities in the various regions of Uganda.

The German-model Multi-Skills Development Centers in each of the four (4) regional Science, Technology and Industrial Parks; and the Israel-model Agribusiness Technical and Vocational Skills Institutes will go a long way to accelerate Skilling of Uganda to match with robust investment promotion.

  1. What are you doing to ensure public education and information sharing for the general public awareness about these developments?

UIA disseminate information through regional investment conferences and summits. Different media houses have also given UIA a platform to make the public aware about these developments. UIA has also maximally used the free government educational airtime on various radios and TVs. The DICs are also effective channels through which information has been passed on and received. UIA has also engaged the District Commercial Officers to serve as District Focal point Officers (DFPOs) for investment. It is through these that information is channeled to the general public countrywide.

  1. What other services do you offer?

The other services include: providing firsthand information on investment opportunities in Uganda, issuing Investment Licenses and assisting in securing other licenses and secondary approvals for investors and helping investors to implement their project ideas through assistance in locating relevant project support services.

UIA also assists investors in seeking joint venture partners and funding,reviewing and making policy recommendations to Government about investment.

  1. Where can Ugandans find you? Do they have to pay a fee before accessing your services?

All the services offered at the UIA are free of charge. UIA is a government agency under the Ministry of Finance, Planning and Economic Development. Government, currently, does not charge for investment facilitation services. UIA has two offices. The head office which houses the One Stop Centre (OSC) for investors is in Nakasero, on Lumumba Avenue, TWED Plaza, 2nd Floor. The OSC hosts the following entities to fast track business registration and licensing:

  1. i) Uganda Registration Services Bureau (URSB) for business incorporation
  2. ii) Uganda Revenue Authority for tax registration and advisory services

iii) Directorate of Citizenship and Immigration Control for special passes, work and residential permits issuance

  1. iv) National Environmental Management Authority for assistance in environmental compliance issues
  2. v) Ministry of Lands, Housing and Urban Development (Lands Registry) for land verification services for purchased land
  3. vi) Uganda national Bureau of Standards for certification advise and compliance with standards

Government of Uganda is developing an integrated electronic (on-line) system – ebiz on www.ebiz.go.ug that will connect all investment relevant agencies, which will cut down on time and money spent to set up business. Currently, potential investors can apply for a license on-line via the UIA website and receive their license for free in 24 hours if all the paperwork is in order.

The other office is located within the KIBP Namanve to enable UIA to serve the investors in the park more effectively.

  1. How many foreign and local investments have you attracted and how are you helping them to grow

In the 25 years UIA has been existence, the agency has licensed a total number of 6,206 projects, with projected employment of 798,302 jobs. Top sources of investment are domestic Ugandan investment, as well as foreign direct investment from China, India, UK and Kenya, Ugandan projects total 2,421, while wholly foreign companies and joint ventures are about 3,785 projects.

UIA provides aftercare services to the existing investors to ensure that they are able to implement their projects and grow them to profitability. There is a business linkage programme that promotes forward and backward linkages to help bring down the cost of production for the big companies while enhancing the competitiveness of the domestic companies. UIA also carries out policy advocacy on behalf of the private sector to ensure a constantly improving business climate. In this vein, UIA is the Secretariat to the Presidential Investors Roundtable, which is chaired by H.E the President of Uganda, who invites both domestic and foreign private sector to advise him and his Cabinet on investment enabling policy.  Quite a number of policy reforms have come out of this initiative coordinated by the Office of the Prime Minister and supported by UIA.

  1. What are the major achievements of UIA?

There are quite a number. These include:

  1. a) The establishment of the One Stop Centre for both domestic and foreign investors
  2. b) Positive growth in the number of licensed investment projects over the years
  3. c) Enhancement of SMEs with the ultimate objective of creating jobs through:
  4. i) The revival and creation of District Investment Committees (DICs) to create balanced regional development. The DICs are instrumental in identifying areas of investment within the various regions and working with UIA to create an enabling business environment for investors to set up their businesses;
  5. ii) Incubation of SMEs to provide start up support where the businesses do not have enough capital;

iii) The Youth Apprenticeship Programme, which aims to solve the problem of youth unemployment. It prepares young educated youth for the option of self-employment by equipping them to become SERVICE PROVIDERS.

  1. iv) Cluster Development for Fish and Cotton Cluster in Pallisa, Nakaseke Cassava Cluster, Kampala Poultry cluster, Kamwenge Fish Cluster, Gulu organic Cotton Cluster, Masaka Fruit Cluster, Butaleja and Pallisa with approximately 400 entrepreneurs/Cluster members. In addition the bean seed cluster has been initiated in Lwengo and 60 local facilitators have been trained.

Clusters have created Unities for rural agricultural based enterprises and encouraged value addition. This has reduced the challenges of isolation in small businesses and created market opportunities One of the significant linkages in the cluster programme has been the linking of KCCA and NAADS to the Kampala Poultry Cluster, for organised facilitation and assistance.

  1. v) Entrepreneurship and Technical Skills Training
  2. Your last word?

The UIA Board of Directors has spearheaded formulation of the new and ambitious Strategic Plan 2016 – 2021, which aims to create one million jobs by 2021. UIA Management and Staff are committed to implement this Plan and deliver on its promises. The UIA Board of Directors is hopeful that Government will avail necessary funds to implement this historic Strategic Plan towards Uganda’s attainment of (lower) Middle Income Status by 2020.

ends

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