Overview:

Manufacturers warn that rampant illicit trade in cement, pharmaceuticals, and beverages undermines legitimate businesses and threatens Uganda's goal of a 500 billion dollar economy.

KAMPALA, Uganda — The Uganda Manufacturers Association has petitioned the government to implement stricter measures against illegal and informal trade, warning that the practice is stifling the country’s industrial growth.

UMA Chairman Aga Sekalala Jr. said Wednesday that rising informality is shrinking the tax base and undermining legitimate factories. He spoke during a pre-budget dialogue in Kampala focused on the fourth National Development Plan.

Sekalala cited a Uganda Revenue Authority report showing that 67 percent of alcohol, 40 percent of cement and 30 percent of pharmaceuticals on the local market are illicit.

These are direct threats to our goal of a $500 billion economy in 15 years, Sekalala said. He added that while manufacturing employs 2.5 million people and contributes 30 percent of domestic revenue, the sector needs better enforcement of quality standards to survive.

Estimates suggest the economy loses more than 2.5 trillion shillings annually to informal operators and counterfeiters dealing in steel, beverages, toiletries and oils. These traders often evade taxes and ignore safety regulations.

Patricia Ejalu, the deputy executive director at the Uganda National Bureau of Standards, urged the government to adopt enforcement strategies similar to those in Kenya. She noted that Kenya’s Anti-Counterfeit Authority uses digital tracking and multi-agency operations to seize illegal goods.

Uganda cannot afford to lag behind, Ejalu said, noting that local agencies require more staff, funding and mobile testing laboratories to be effective.

Industry State Minister David Bahati assured manufacturers that their concerns would be presented to the Cabinet. He encouraged local firms to target the Democratic Republic of Congo market, where Uganda exports nearly $900 million in goods, but emphasized that maintaining high standards is non-negotiable.

The issue of standards is key, and we spend reasonable money trying to enforce them, Bahati said.

TradeMark Africa Country Director Anna Nambooze highlighted the importance of the African Continental Free Trade Area. She said reducing non-tariff barriers would help Ugandan businesses become more competitive across the region.