Uganda’s efforts towards industrialization: Catalyzing production, productivity and investment in local industries

Abstract

The Ugandan economy’s trade balance has been in deficit for a number of years. Imports have been growing faster than exports, leading to trade deficits. Uganda has a vision for transformational development of the economy with a role for industrial development. The national plans and Industrial Policy outline how to achieve the desired state of industry. This article focuses on how manufacturing development, with specific attention to catalyzing investment, production and productivity in local industries can be used to address Uganda’s trade balance. Manufacturing contributes employment opportunities, improved balance of payments position, greater efficiency driven by technological innovation, the development of managerial and entrepreneurial capabilities and improvement in technical skills. Uganda government has committed to transfer value-adding technologies and to empower women with agri-business skills to step up the growth of industry. In order to propose a perspective on approaches to catalyze investment, production and productivity, it is essential to analyze Uganda’s current manufacturing performance to inform interventions to stimulate industrialization. The findings reveal that the manufacturing sector needs stimulation to increase growth. Government should stimulate investment by building productive capacity in selected sub-sectors of manufacturing. Investment should be accompanied by development of requisite skills demanded by manufacturing development. A possible approach should be targeting industries that have strong linkages and generate spill-over effects engaging in production that touches on a number of sectors of the economy.