This archive report was first published on 24 June 2020.
On June 24, 2020, Daniel Birungi, the executive director of Uganda Manufacturers Association, spoke to Bamuturaki Musinguzi about the effects of the coronavirus pandemic on the manufacturing sector.
Uganda's manufacturing sector is still recovering from production shocks caused by supply chain disruptions, limited access to materials, and repayment of loans with no production.
Despite easing of some movement restrictions, operations at factories are still adjusting to the new normal, with delivery delays of externally sourced raw materials and machinery due to closed borders.
UMA has developed Standard Operating Procedures for factory-level mitigation of the Covid-19 pandemic, in collaboration with the Health ministry.
The association has also developed a Covid-19 Occupational Safety and Health Workplace Readiness Assessment, undertaken by a multidisciplinary team of the Ministry of Health and UMA.
Supply and demand disruptions highlight the urgent need for better railway and water transport systems as cheap alternatives, according to Birungi.
UMA is firmly pro-water and railway transport, as long as the cost of utilising these does not exceed the current costs on road transport.
The association has cautioned that prices of locally-produced goods will rise in the coming months should the pandemic restrictions persist.
Manufacturing is a highly capital-intensive endeavour, often financed by bank loans given the limited individual liquidity in Uganda.
UMA has lobbied government to rationalise the Central Bank Rate (CBR) and the Financial Institutions Act, and to lower the CBR by at least three per cent to stimulate private sector credit growth.
The government has shared conditions for applying for the stimulus package for industries facing constraints, including deferral of payment of statutory dues.
However, the 90-day period for deferrals is too short, according to UMA members, and the sector players will also be required to comply with their obligations effective July 1, 2020.
UMA has learnt several lessons from this pandemic on the country's industrialisation policies, including the need to develop local capacity and the importance of developing whole value chains.
