Could Uganda create a competitive industrial sector?

In a recent interview with CNBC Africa, Rebecca Nalumau, Director of Business Development & Investor Support at Uganda Free Zones Authority, discussed the challenges and strategies for boosting Uganda's exports in the face of recent setbacks. Uganda's exports to other East African Community member states were close to a billion US dollars pre-COVID-19, but recent unrelated events have seen those numbers decline. Nalumau highlighted the success of Uganda's free zones scheme in promoting exports and job creation. Established in 2014, the free zones team has seen significant growth over the past six years, with the number of free zones increasing to 16 in 2021. The scheme contributed $1.25 billion to exports in 2021, accounting for 23% of Uganda's total export trade. Nalumau attributed the growth of the scheme to the unique tax exemptions and specialized incentives provided to businesses operating within free zones. These incentives enable businesses to produce goods at a lower cost and access regional and international markets. The government has also invested in developing industry infrastructure for free zones to further reduce the cost of doing business. Despite challenges in accessing key export markets like Kenya due to trade standoffs, Nalumau remains optimistic about the ongoing bilateral negotiations to address barriers and improve trade relations between the two countries. Uganda's ratification of the African Continental Free Trade Area Agreement also presents an opportunity for the country to access a larger market. To attract foreign direct investments and overcome challenges such as access to electricity, Uganda is focusing on establishing cross-border free zones and developing regional special economic zone policies. These initiatives aim to enhance cross-border development, address infrastructure issues, and harmonize regulations at a regional level. By streamlining investment rules, tax incentives, immigration, and labor regulations, Uganda hopes to capitalize on the opportunities presented by the African Continental Free Trade Area.