Uganda is a potential strategic trade hub for the East African Community (EAC) and Intergovernmental Authority on Development (IGAD) trading blocs if it acts quick to build and develop its logistics Industry. The country is a link to the resurgent lucrative markets in the Democratic Republic of Congo, Burundi, Rwanda and the Southern Sudan. I have argued before, that as a country, it is not strategic to focus on competing with Kenya to manufacture Blue Band margarine! We can focus on efficient transportation/delivery of Blue Band to ‘niche’ markets in Southern Sudan, Rwanda, DRC and Burundi. As a result, we shall make more money than the real manufacturer in Kenya.
To achieve the foregoing scenario, Uganda should spur its logistics industry by reducing landing, handling and other airport fees at Entebbe Airport especially for cargo planes. The country should cut down taxes on aviation fuel, build more airports and waterways, renegotiate Tororo inland port agreement to remove the exclusivity right that inhibits competition, urgently reallocate part of 66 hectares of Ministry of Agriculture Animal Industry and Fisheries (MAAIF) land at Entebbe airport to Civil Aviation Authority to enhance development of a modern cargo centre, a Ferry port, standard airport hotel and car park. Government should consider shareholding in Air-Uganda and designate it as a national flag bearer.
Other logistical policy and investment issues must be urgently worked on. For instance, the technical and absorptive capacity in the road fund management through training and recruitment of technical staff must be implemented. The Kasese line and the Busoga railway loop and Pakwach line must be revamped. Portbell pier should be upgraded to meet increased capacity along the central corridor transit route. There is also an urgent need to upgrade Malaba- Kampala line to enable movement of bigger locomotives and longer trains including re-aligning and upgrading of Jinja Kampala section. Mukono Inland Container Depot as a dry port for rail cargo as a pilot project for inland dry port need to be gazzeted and developed with immediacy.
The Netherlands, a small country focused on logistics and is reaping big. They put up Schipol airport and port Rotterdam, effectively outcompeting Germany and other economic Ayatollahs’ like France and the United Kingdom in Europe. In the Netherlands, some 12,000 companies offer road haulage services, ranging from very small, one-truck outfits to large international players. Nearly 75% of all goods in Europe are transported by road, and some 30% of all cross-border road transportation of goods within the EU is carried by Dutch transport firms. Of these, approximately 500 major and medium-sized operators offer a full range of integrated logistics services. If Uganda focused on logistics, it would double jobs scale in a space of 2 years. Surely Uganda can pull this off!
A developed logistics industry comes with a myriad logistics support services that include banks, leasing companies, terminal facilities etc and pre-requisites like highly skilled, flexible, and multilingual labor force; presence of a pro-business government that fosters a favourable operating environment through business-friendly policies on customs procedures and taxation. I know people will be asking - Where will the country get resources/ money to do the above? With good business policies, FDI will flow to finance public works through leveraging public-private partnerships. Secondly, the road fund and energy fund can also be tapped. If we stave off corruption and incompetence and thus cut haemorrhage of resources, money will be available to do the above. Anticipated oil resources can partly finance this.
The Uganda National Chamber of Commerce and Industry will continue to assist Uganda’s business community to take advantage of the emerging immense business opportunities in the region. The reason we exist is to “ENHANCE BUSINESS OPPORTUNITY” through illuminating and amplifying the voice of the business community.
By Morrison Rwakakamba
Secretary General, Uganda National Chamber of Commerce and Industry