Industrialization, A Solution To Unemployment In Uganda

Hope Abonit

By Hope Abonit

Heroes Day honors those who participated in the liberation struggle to reinstate democracy and the rule of law in Uganda.H.E Yoweri Museveni led the struggle to liberate the country and when he came into power, he told the people of Uganda that the NRM Government would be different from any other government that had ruled Uganda.

Though Heroes’ Day is commemorated to honor those who laid down their lives during the guerrilla war, the country has now moved on with development and heroism is no longer just tied to guerrilla war. So many other aspects are considered like liberating the country for poverty and coming up with scientific innovations that solve society’s problems and create employment. This is why we have seen so many Ugandans awarded medals for the outstanding work they do in their communities.

Take for instance different sectors in this country which have been used to cut down on the level of poverty and made some changes in society and industrialization is one of them. Every country that has achieved sustained growth has also seen a

structural transformation of its economy away from primary production toward industry and services. Industrial development is necessary to raise incomes and employment, diversify

exports and extend markets.  In resource-poor countries, industrialization becomes the most viable option for prosperity and wealth generation. Industrialization, therefore, stands out as a major solution to poverty and unemployment. This is the reason the NRM Government under the leadership of President Yoweri Museveni has put emphasis on industrialization in Uganda for it to move to a middle income economy.

The NRM Government has had strategic focus for industrialization to transform the economy from peasantry-based agricultural systems to industrial- based. Though the journey to industrialization in Uganda has been challenging,the government is still determined to attract investors and also invest in infrastructural development that is an incentive for investment. From Uganda’s Vision 2040 we see that government aims to transform our economy into a middle income one by 2020.The hostile political and economic environment that Uganda experienced during the 1970s and 1980s reserved the development of the country and therefore Museveni’s government had to start from scratch.

The NRM Government, on its part, has made commendable efforts to uphold industrialization as a strategic foundation of Uganda’s development.Industrialization encompasses adding value by processing and increasing exports of higher value, especially from agricultural and mineral resources which the NRM believes has a high multiplication effect that will not only create jobs but also result in product diversification, greater efficiency, and technical skills for modernization and higher productivity.

President Yoweri Museveni in his inaugural speech after swearing in said, “Uganda already has 3,100 factories and 3,475 tourism related companies and assets.  The two are already employing about 1.1 million people.  This has been achieved in spite of the bottlenecks of lack of electricity and high transport costs in the past.  Now that we are addressing the issues of electricity and transport costs, our progress will be faster.”

Significant growth has been registered in industrial development since 1986 averaging over 5% per annum and 6% contribution to GDP. In particular, this has been in the areas of manufacturing, mining, quarrying and construction compared to the past years thus showing a steady progress in the development of the industrial sector. The sector is estimated to be directly employing more than 3 million people. A significant number are working in value addition ventures. These are mostly manufacturing industries with heavy production concentration of foods and beverages, leather and foot wear, textiles and clothing and metal works. Micro, small and medium- scale enterprises (MSMEs) currently dominate the country’s manufacturing sector.

 

Government has also continued to promote commercial agricultural production, it is also to support agro-processing that will see a number of agro-based industries emerge especially in the countryside where there will be added opportunities of employment creation for the youth thus on top of agro-processing, the country will utilize the many mineral resources and put up factories in a diversity of areas.

 

Quite a number of times, some people have had a notion that the NRM government did away with factories which were providing them jobs but its rather the opposite because considering all factors, NRM government has had a  momentous impact in this nation where by so many factories have been created. Areas like Namave, Jinja and Kampalahave had tremendous developmental changes due to industrialization. The Ministry of Trade, Industry and Cooperatives has registered 2,000 enterprises, engaged in; Agro-processing (63%), Metal fabrication, furniture, bricks and tiles (12%), Pharmaceuticals and other chemicals (6%), Paper, plastics and cosmetics (6%),12 Confectioneries (3%), Electricals and electronics (3%) and others (10%).

 

Though Uganda is a landlocked country and not fully hallowed with vast opportunities and resources to see that it moves at a rapid pace and it is still rated as a developing nation, its citizens  have proved to be resilient and determined in what they do. They have grabbed every single opportunity to engage in lucrative business the reason why so many industries are highly performing.The developments in the sugar subsector have enabled the country to produce over 500,000 metric tons against domestic consumption of 360,000 metric tonnes. The country now has a surplus of over 140,000 metric tonnes. One of the new factories is under construction in Amuru, which is expected to start in 2017.

 

President Yoweri Museveni has greatly supported mass industrialization by ensuring that government embarks on the programme of mass industrialization of the country in order to fight unemployment in Uganda especially among the youth.

Investment in infrastructure, promotion of foreign direct investment (FDI), and support to local investors were anticipated to spur growth in jobs. The Uganda Investment Authority (UIA) was put in place by an act of parliament in 1991 to foster private sector investment and, subsequently,create employment through foreign, joint-venture and local projects. Efforts to promote FDI have focused on generating new investments with foreign and domestic private sector actors.

The industrial parks will be developed with infrastructure; roads, railways, water, Internet and power. Warehouses will be constructed where investors can come and set up their machinery and start working. This will attract the many SMEs who are constrained with resources to buy land and invest in civil works.

 

The government will also support technological innovation by increasing the innovation fund to help anyone with scientific ideas that need to be developed into business ideas. This fund will also be extended to the many youth who are trained in computer science and are already developing various computer applications that are of importance to the citizens of this great nation.

 

The UNBS will increase its surveillance to ensure that there is no dumping of poor quality goods in Uganda as this is not only harmful to the health of Ugandans, but also affects local industries producing similar products. This will be coupled with increased surveillance by URA to ensure that no goods come in untaxed or under-declared in value.

Industrialization has been a big challenge in Uganda however gradually it adhered to all factors to come out strong and that is why a positive growth trajectory, rapid urbanization, improving political and economic environments have created a skylight of opportunity for Ugandans to achieve economic transformation.

 

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