Local firms protest against foreign investors incentives
By Stephen Wandera Ouma
Local investors have appealed to the government to adjust its investment policies they say favours their foreign counterparts. Speaking to the East African Vanguard in several interviews some local companies are at a verge of closing business due to unfavourable investment climate that has compromised the Buy Uganda Build Uganda (BUBU) policy championed by President Yoweri Museveni. It is aimed at boosting local production, creating jobs and in the long run reducing Uganda’s import bill.
“When a foreign investor comes to Uganda, the fellow is given free land and a tax holiday for ten years among other incentives. For us you have the burden of paying Value Added Tax (VAT), Withholding Tax among others. We buy material from the same source and you expect us to compete on market,” said Mr. Peter Samula, the Managing Director, Gayaza Electronics Works Ltd.
He added, “My products are more expensive than the ones of the foreign investor. We have tried to complain to the Ministry of Trade, Industry and Cooperatives as well as Ministry Finance, Planning and Economic Development but no help. They say it is a matter of amending a number of laws that is the mandate of Parliament.
Top Manager, Jesssani Foods Industries Ltd, manufacturers of sweets, biscuits among other confectionaries, who not to be named said due high tax, the company cannot export its products.
“We cannot export to South Sudan, DR Congo, Rwanda and Burundi because our products are expensive as compared to our competitors from India, Kenya and Tanzania. VAT here is 18 percent while in Kenya and Tanzania is 16 percent,” he said. Adding, “It is cheaper to import sugar from Brazil and Dubai while we grow plenty of sugar cane locally. To make matters worse, some top government officials smuggle sugar into the country which destabilizes the market.”
He also blamed Uganda National Bureau of Standards (UNBS) for the annual certification fee levied on every product.
“I pay UNBS Shs15 million every year for certification. The period should be extended to cover at least two to three years,” he added.
Birime Construction Limited, called on the government to award local contracts as a mitigation measure. Most of the construction contracts are awarded to foreign firms who subcontract locals to do trivial work. The foreign firm have bigger technical capacity and funds unlike their local counterparts.
“I know that there is provision of local content as government policy. My appeal is, local firms have Uganda at heart, we work knowing this our country, on behalf of local firms in the construction sector, I appeal to UNRA, to consider us patriots unlike other foreign firms. Give us more, what we earn remains in the local circulation” said Mr Birime Patrick, the Managing Director, Birime Construction Limited.
When contacted, Mrs Harriett Nabatanzi said the ministry is aware of the investors’ concerns and are being addressed.
Buy Uganda Build Uganda (BUBU) policy provides for 30 percent the contracts awarded to foreign firms given to local companies.
Mr Birime said, “The BUBU policy is good but not enough, we deserve more to fast track local capacity.
He argues, “If local firms are not promoted faster, the foreign companies will always take away money meant to develop our mother land. This could be one of the worsening inflations”
Birime added, “However, we thank the National Resistance Movement (NRM) government for recognizing local firms. At least we have something in the pocket.”
