#BUBU to enable increased number of local traders participating in public procurement – Amelia Kyambadde

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I would like to take this opportunity to welcome the Right Honorable Prime Minister, Ministers and distinguished participants to the launch of the Buy Uganda Build Uganda (BUBU) Policy and its Implementation Strategy. Rt Honourable Prime Minister, as you are aware, cabinet approved the BUBU Policy in October 2014 as tool to guide on increasing consumption of local goods and services in the Public Procurement Sector including promoting conformity to standards.

The main objectives of the policy is to promote the consumption and use of local goods and services, increase the local content in government procurement and create awareness for consumers to buy locally produced goods and services. BUBU is a landmark policy, whose successful implementation will contribute to job and income creation, increase the 3 competitiveness of our products, and consequently reduce our country’s trade deficit. Fellow Ugandans, Government has embarked on addressing challenges faced in public procurements, private Sector production and consumption of local products.

In this regard, Government is undertaking the following interventions:-

1. Increasing the capacity of the domestic private Sector to supply huge infrastructural projects such as the construction of dams, railway lines and highway roads to reduce the pressure on Government to procure international companies at the detriment of local suppliers.

2. Increasing awareness of the procurement procedures by the business community.

3. Enhancing the capacity of local companies to produce and supply products that meet the requisite quality and standards.

4. Formalising the MSMEs and increase their capacities tap from government procurement.

5. The revised the PPDA Reservation Schemes which came into effect on 1st March 2017 provides for the following;

a) Preferential thresholds for national providers in public procurements

b) Reservation of at least 30% of the value of works through subcontracting to local companies 4

c) Reservation for procurement of uniforms and related clothing materials

d) Reservation for procurement of low voltage cables and conductors

e) Reservation for procurement of selected medicines Government is also in the process of reviewing existing laws and regulations with a view of strengthening local content provisions. To this end, government is reviewing the PPDA Act, investment code, oil and gas act, registration of companies act, immigration and citizen control act, employment act and local government act, among others. Government will amend these laws or enact new laws where it is necessary to increase local content. In order to increase demand and consumption of domestic products, The Ministry of Trade, Industry and Cooperatives is developing supermarket regulations with a view of increasing the shelf space of locally produced products especially in the supermarkets. Supermarkets are mass buyers and provide market opportunities, which must be tapped by the locals. We must therefore reverse the trends in the supermarkets where over 80% of the shelf space is covered by imported goods.

The Buy Uganda Build Uganda Policy Implementation Strategy aims at giving prominence to locally available goods and services in the market. To achieve this, the Strategy targets to create awareness about availability of local products, builds capacity of the local producers and their reliability; and provides avenues to assist them improve their business. Policy interventions are designed to ensure that during the public 5 procurement process local products are treated under a reservation scheme provided in Section 50 PPDA Act 2003. In line with the BUBU policy, PPDA is in the process reviewing the guidelines to operationalize the reservation schemes, which will facilitate the implementation of the Presidential directives on Sectors namely; textiles, cables and Medicare. Supply of other products under public procurement shall be guided by the provisions on thresholds and subcontracting. Implementation of the BUBU Policy when successfully implemented will enable participation of the local producers and suppliers in the development process. This Implementation Strategy will address Right Hon Prime Minister, the issue of standards that has always been cited for failure to buy and consume local goods and services.

There is a strategic objective to ensure conformity and compliance to standards in which the Uganda National Bureau of Standards will give technical guidance to producers and traders. The BUBU Implementation Strategy deliberately also aims at developing Micro, Small, and Medium Enterprises (MSMEs) and enhancing their participation in domestic trade. As you aware, Rt. Hon Prime Minister, My Ministry has established a Directorate to enhance the capacity of MSMEs through the provision of business support services. We are confident that by enhancing the capacity these key economic operators, our citizens will meaningfully contribute to our economic growth and development.

Right Honourable Prime Minister, there are five strategic objectives, which we will pursue to implement the BUBU Policy. The first one is to take stock of the local producers, service providers to strengthen their capacity to supply local content components in all major infrastructural projects. Under this strategic objective, we will identify producers/suppliers, build their capacity, formalize them, improve their reliability, and apply preference schemes under the PPDA Act.

This is intended to increase number of local producers benefiting from Government Procurement. The second strategic objective is to enhance the quality and competitiveness of local products and services. This will go alongside developing a brand and marketing strategy for Ugandan goods and services. The BUBU Strategy will ensure conformity and compliance to standards. The third strategic objective is to increase efficiency and participation of local producers in public procurement. This strategy is about working together to ensure timely payment to suppliers.

The Strategy will lead to increased number of local traders participating in public procurement and eventually in the higher value chain. The fourth strategic objective is to increase the visibility of local products in local outlets. The strategy here will be to engage retails especially supermarkets to give shelf display space and 7 mainstream BUBU Policy Implementation in both private and public Sector transactions. The fifth strategic objective is to increase awareness about the BUBU Policy.

This Strategic objective will be to develop a communication strategy, coordinate implementation among Ministries, agencies and private Sector; and enhance participation of the BUBU National Committee in monitoring local content. Right Hon Prime Minister, the BUBU Policy and its Implementation Strategy are firmly supported by Government right from H.E the President, your office and other Government Agencies. This is vital for successful implementation of this landmark strategy we are launching. There is however need for increased interaction and administrative coordination within Government Ministries, Agencies and Local Governments. The BUBU Policy Implementation Strategy takes cognisance of all the existing policies and laws guiding and regulating trade in all MDAs.

Rt Honorable Prime Minister the BUBU is not a unique initiative of Uganda. Many other countries within and outside the region have implemented similar arrangements. These include; the proudly South African Campaign, the made in Australia Campaign, The Buy Malawi Strategy, the Buy East Africa Build East Africa Initiative, the Buy Africa Build Africa (BABA) under COMESA and the Proudly British campaign and most recently the Buy America Hire America.

Rt. Honorable Prime Minister, you may also wish to note that the other EAC Partner States have similar preference and reservation schemes in place. For example, the PPDA Act of Kenya supports the promotion of locally produced goods while the Tanzanian PPDA Act grants a margin of preference for goods manufactured, grown and mined by local Tanzanians. These initiatives aim at supporting locally originating products and boosting local productive capacity. Rt. Honorable Prime Minister and distinguished participants, as you are aware, the 16th summit of the EAC Heads of State decided to ban importation of used clothes and reduce importation of used cars. Implementation of this ban would be on progressive basis as the region develops local capacity. In this regard, Government has put in place deliberate actions to develop the textile industry. The ban followed the realization that Uganda imports used clothing to the tune of Ush162 billion.

In order to reserve this situation, Government through Cotton Development Organization (CDO) has provided a buffer stocks fund of USh10 billion for industries involved in vertical integrated textile mills in line with the National Textile Policy. This fund will help in increasing sourcing of cotton and establishment of vertical integrated textile mills in order to enhance productive capacity of the textile industry. In the context of the leather Sector, the demand for shoes in Uganda is 25million pairs.

However, out of these, only one 9 million pairs of shoes are locally produced while 24million are imported. Out of the total imports of shoes, only 500,000 pairs are leather shoes. If for example the 8,300,000 primary school going children wear leather shoes at 35,000/= per pair then the leather Sector would earn 290bn UGX. This is only a projection for the primary school pupils. However, this Sector has a lot of potential to help develop the economy. The following priority Sectors for the implementation of BUBU in the short and medium term have been identified. a) Services i) Construction services (roads, railways, dams, other government civil works and projects) ii)Consultancy services iii) Insurance services iv) Legal services v) Accounting services b)Goods i) Construction materials (iron, steel, cement,) ii)Textiles iii) Oil and gas iv) Leather and footwear v) Furniture vi) Stationary vii) Pharmaceuticals viii) Foods and beverages ix) Electricals 10 Rt. Hon Prime Minister, allow me to now briefly go through the overview of the Framework for Implementation of BUBU.

The implementation of BUBU shall be in three approaches namely; a) Implementing PPDA Guidelines on Reservation Schemes to promote local content in Government as contained in Annex I attached. b) Assigning specific roles to all MDAs for the implementation of BUBU as contained in Annex II: Matrix of MDA Sector Roles in Implementation of BUBU. c) Supporting local producers and suppliers to access Supermarket shelf space as contained in Annex III on Matrix of MDA Sector Roles in Implementation of BUBU. Rt. Honorable Prime Minister the Framework also has provisions for covering the following: I. Addressing gaps in legal and regulatory framework.

Rt. Hon. Prime Minister, there are number of laws that are supportive of BUBU, some of these laws however need to be strengthened and harmonized with BUBU policy objectives. The laws are:  Uganda Citizenship and Migration Control Act; National Oil and Gas Policy, 2013; Investment Code Act, 1991;  Trade Licensing Amendment Act, 2015;  The Refugee Act;  Companies Act; II. BUBU Communication Strategy The Ministry of Trade, Industry and Cooperatives will develop an Implementation Strategy to implement BUBU. This will guide the process and will address information gaps in the implementation of BUBU. III. BUBU Implementation Structure Rt. Hon. Prime Minister, due to the critical importance of BUBU, the Government has deemed it necessary that the BUBU Ministerial Committee will be chaired by the Rt. Hon. Prime Minister and will be comprised of the following:- a) Right Hon. Prime Minister (Chair) b) Minister of Trade, Industry and Cooperatives-Secretariat c) Minister of Finance, Planning and Economic Development d) Minister of Education and Sports e) Minister of Works and Transport f) Minister of Justice and Constitutional Affairs g) Minister of Agriculture, Animal Industry and Fisheries h) Chairman of Uganda Manufactures Association; i) Chairman of UNBS and; j) Chairman PPDA Board. IV. National Technical Sub Committee 12 The Ministerial Committee will be supported by a National Technical BUBU Sub Committee that will comprise of the following members; i. Permanent Secretary -Office of the Prime Minister (Chair) ii. Permanent Secretary MTIC (Secretary) iii. Permanent Secretary-MoFPED iv. Permanent Secretary –Ministry of Education and Sports v. Permanent Secretary Ministry of Defence vi. Permanent Secretary MAAIF vii. Permanent Secretary Works and Transport viii. Solicitor General –Ministry of Justice ix. Uganda Insurers Association x. Uganda Bankers Association xi. Uganda Institute of Professional Engineers xii. Institute of Certified Public Accountant Uganda (ICPAU) xiii. Uganda Manufacturers’ Association xiv. Uganda Small Scale Industries Association xv. Uganda Cooperative Alliance The Committee will undertake the following functions; i. Provide overall oversight on BUBU implementation; ii. Receive and analyse quarterly progress reports; iii. Prepare and submit to Government Half Annual Performance Reports on BUBU implementation for discussion by Cabinet; iv. Prepare and submit Government Annual Performance Reports on BUBU implementation for discussion by Cabinet; 13 v. Appraise all MDA budget framework submissions to ensure compliance with BUBU objectives.

Conclusion Rt. Hon. Prime Minister, my Colleague Hon. Ministers, esteemed Private Sector Fraternity, Accounting Officers, Members of the Press, Ladies and Gentlemen. The BUBU Policy which is being launched today on the directive of H. E. the President stands out to be one of the major national agenda towards ensuring that Uganda achieves Middle Income Status by 2020. BUBU is the highest level of Patriotism that we must all embrace as citizens, investor and stakeholders in the Ugandan economy.

BUBU will enable us attract investment in the import substitution Sectors. BUBU will help us strengthen our national capacity to undertake major national infrastructural projects with appreciatable national content. BUBU will create employment for our brothers, sisters and children.  BUBU, therefore, is our future. 14 Rt. Hon. Prime Minister, you will be launching the following:- 1. BUBU Policy 2. BUBU Implementation Strategy 3. Framework for the Implementation of BUBU Rt. Hon. Prime Minister, it is now my honour and pleasure to invite you to address and launch this landmark movement.

I thank you all for listening.

FOR GOD AND MY COUNTRY

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