BUBU policy firmly on right path By EroniE KamUKama

ekamukama@ug.nationmedia.com

In 2015, Cabinet approved the Buy Uganda Build Uganda (BUBU) policy. It had been

a long awaited policy. About nine years earlier, the private sector made two simple re-quests; implement a policy that encourages purchase of locally produced goods and services and amend the Public Procure-ment and Disposal of Assets Act (PPDA Act) to provide spe-cial preferences for local sup-pliers and service providers.

The Ministry of Trade, Indus-try and Cooperatives (MTIC) listened to the plea and formu-lated a policy in response. Two years later, Prime Minister Dr Ruhakana Rugunda launched the policy in Kampala, urging Ugandans to support it, given that it was expected to create more jobs, increase domestic revenue, tap into potential of local raw materials, improve standards of Ugandan prod-ucts and deal with the problem of trade deficit.

Immediately, the Ministry of Trade engaged stakeholders public and private sector play-ers to cultivate participation of national and resident firms in public procurement. Views collected facilitated work in collaboration with the Ministry of Finance, Planning and Eco-nomic Development to make acceptable guidelines for in-creased participation of the lo-cal private sector in public pro-curement. In the meantime, a huge campaign to spread word about the policy went on.

After almost a year’s work, guidelines on reservation schemes to promote local con-tent in public procurement were circulated and implementation has followed since. Reservation schemes are opportunities to trade with the public sector set aside for special interest groups in the national economy.

Today, both government and Ugandan producers seem to have played along in the implementation of the BUBU policy. In fact, the ministry of trade describes the uptake as at an “acceptable pace.”

“Today, local traders have seized opportunities in the ar-eas that were provided in the reservation guidelines of Feb-

ruary 15, 2018,” Trade minister Amelia Kyambadde says.

The guidelines provide for reservation of public contracts by threshold to nationals or resident providers. This ranges from Shs1bn and below for supplies and Shs45bn for road works and other public works whose estimated cost is below Shs10bn.

Also, in reserve is at least 30 per cent of the value of works through the subcontracting of sub works and supplies of ma-terials and equipment and ser-vices to nationals and resident providers.

These are works above Shs45bn and other works above 10bn. In addition to these, is reservation for procurement of uniforms, clothing materials, electrical cables, conductors, medicines and supplies.

The ministry of Trade di-rected all accounting officers to promote local content in public procurement through contract committees and members of the procurement and disposal Units in the country.

“Our local consumer goods and services are regaining good reputation nationally and regionally. Today, we have more than 3300 national standards and our conformity to standards is improving as illustrated by increased con-sumption of our locally pro-duced goods nationally and in

the region. Our trade balance with Kenya, our greatest trad-ing partner in the region has greatly improved from nega-tive to a positive trade balance in 2017 partly because of the acceptability of our products,” Ms Kyambadde says.

According to the ministry, the implementation of BUBU Pol-icy under public procurement is now at national level and done under guidelines which are mandatory and are be-ing incorporated into the new Procurement Bill to be tabled for approval in Parliament this year.

In the market, it is at this point that efforts are underway to engage supermarket own-

ers and traders in local markets to improve adherence to stan-dards on products, display and packaging.

Roofings Ltd is one of those companies that paints the pic-ture of the impact of the BUBU policy in the last two years. The 25-year old company makes an array of steel products includ-ing galvanized and pre-painted roofing sheets, eco tiles, hollow sections and mild steel plates.

“For the local manufacturers, it is a good policy. We have been benefitting especially for the last two years but not as much as we would like to. We are supplying to most of the projects maybe 5 to 7 per cent of the total requirement and we would like to see it as promised by His Excellency that we should see it go up to 30 and 40 per cent of locally manufactured goods to these projects,” Mr Oliver Lalani, the executive director of Roofings Group says.

Mr Lalani thinks everyone, in-cluding the government is try-ing their best to ensure proper implementation of the policy but adds that private sector and government must continue to shoulder each other.

“We are working with 64 per cent of our installed capacity in Uganda and we have a lot of ex-tra capacity to supply because we are not the only ones, there are other Uganda manufactur-

ers so we have got enough ca-pacity to supply all these proj-ects,” Mr Lalani says.

By press time, Mr Lalani could not share statistics on how much it has supplied to government since the policy implementation.

Currently, according to minis-try of Trade, there are 24 steel industries with an installed ca-pacity of 1.7m tons per annum from 866,000 tons per annum five years ago.

Ms Kyambadde says the ex-ponential increase in capacity for iron and steel as well as ce-ment has been precipitated by the large government projects in the offing, including roads, bridges, dams, (Karuma dam, Isimba, Bujagali and others) and the planned oil and gas pipeline.

Uganda Manufacturers As-sociation (UMA) chief execu-tive officer Mr Daniel Birungi is certain some gains have been made with the BUBU policy, es-pecially for the sectors under reservation schemes.

“These sectors have exhib-ited growth in terms of job numbers, tax contribution and also electricity usage. Electric-ity usage is important because it is a metric for level of produc-tivity and further investment in machinery because of course if there is a spike in consumption, it shows a change in my pro-duction,” Mr Birungi says.

Objective. The BUBU policy main objective is to promote the consumption and use of locally manufactured goods and services.

FRIDAY, MARCH 1, 2019 47

Buy Uganda Build UgandaBuy Uganda Build Ugandasupplement

Prime minister Ruhakana Rugunda (right) is joined by Trade minister Amelia Kyambadde to launch the Buy Uganda Build Uganda policy in Kampala in 2017. FILE PHOTO.

KEY ISSUEThe challenges hurt far beyond manufacturing sector. ms Kyambadde says there are gaps in the legal framework, including the PPDa act, the investment Code act, and the Public Private Partnership act. She also points out the slow mindset change towards local products and services, lack of modern leather tanning facilities and final-leather making factories. artisanal industrial subsector in the production of furniture and fabricated goods is yet to grow capacity.

“For the local manufacturers, it is a good policy. We have been benefitting especially for the last two years but not as much as we would like to,”

Mr Oliver Lalani, executive director of Roofings Group.

48 supplement. FRIDAY, MARCH 1, 2019

Buy Uganda Build UgandaBuy Uganda Build Uganda

By amELia KyamBaDDEeditorial@ug.nationmedia.com

The Buy Uganda Build Uganda (BUBU) policy was formulated by the

government through the Min-istry of Trade, Industry and Co-operatives and approved by Cabinet in 2015.

The policy together with its implementation strategy was subsequently launched in 2017.

The BUBU policy is premised on PPDA Act 2014, under which amendments are being made to among others provide for reservation scheme regula-tions to give force of law to the policy.

Objectives of the policya) Promotion of consumption

of local goods and services. b) Promotion of conformity

to standards to guarantee qual-ity goods and services.

c) Provision of capacity build-ing programmes to local sup-pliers of goods and services.

AchievementsImproved capacity of local producers and service pro-vidersIron and steel sector. Cur-rently, there are 24 steel indus-tries with an installed capacity of 1.7m tons per annum from 866,000 tons per annum five years ago.Cement. Currently, Uganda has five cement factories pro-ducing 4.43 million MT per an-num, an improvement from 2 million MT five years ago.

This exponential increase in capacity for iron, steel and ce-

ment has been precipitated by the large government projects in the offing, including roads, bridges, dams (Karuma dam, Isimba, Bujagali and others) and the planned oil and gas pipeline.Textile sector. Uganda has produced an average of 130,000 bales equivalent to 24,050 tons of cotton per year.

Currently, there are 39 gin-neries with an installed ginning capacity of close to one million bales.

Total spinning capacity is 12.2 tons per day. The yarn pro-duced is mostly consumed lo-cally for production of fabric.

Uganda also has a total weav-ing capacity 80,000 meters per day and knitting capacity of 8.2tons per day.

Government security agen-cies including police, UPDF and prisons are procuring their garments from local textile in-

dustries. Leather sector. Currently, there are seven operational tanneries in Uganda, two of which process a small propor-tion of their hides and skins to finished leather.

Uganda has an installed tan-ning capacity of 1.08 and 2.0 million hides and skins per year respectively.

There are seven medium sized footwear factories and more than 800 micro and small-scale footwear entrepreneurs in the country producing about 1.5 million are produced in the country.

The production of shoes is still at artisanal level.

Improved quality and stan-dards of local products

In the last two years, UNBS has supported 904 SMEs in product certification pro-cesses.

SMEs are now accessing mar-kets locally mainly in hotels and supermarkets and some are ex-porting in the region as a result of compliance.

Increased shelf space of local products in supermarkets as a

result of increased capacity and improved standards.

Shelf space for Ugandan products in supermarkets now stands at 40 per cent. Products range from honey, sugar, de-tergents, cosmetics, food stuffs among others

Ugandans have taken control of the supermarket business and are largely selling Ugandan products. Examples are Qual-ity, Capital shoppers, Megha Standard, Master supermarket and many other small scale businesses.Support to local agro-pro-cessing. In order to support local farmers, government has initiated the Agriculture Value Chain Development Project (AVDP) to the BUBU policy and reserved $3.5 million for the purchase of local products e.g. local seed multipliers, local fertilizers and seed dealers and agro-processors.

Specifically, all procurements below $200,000 in this project will be competed for by local firms.Furniture and Metal works. With the increased growth of the construction sector in Uganda now standing at 33 per cent, there has been increased capacity and improved qual-ity for local furniture and meal works producers.

MDAs have commenced procuring office furniture from Uganda Prisons Industries and other suppliers of locally made furniture in accordance with the President’s directive.

Schools are also procuring desks locally

Medical supplies/Pharma-ceutical products. Following implementation of the reserva-tion schemes, National Medical Stores locally procured medi-cal supplies worth Shs156.056b from local companies in FY 2017/18.Civil works. In the FY 2018/18, UNRA awarded contracts worth Shs3.7 trillions. Out of this, con-tracts worth Shs450b (12 per cent) were reserved to national providers. In addition, a total of Shs423billion (11 per cent) was awarded to local providers through mandatory sub con-tracting by foreign providers. Energy supplies. Before issu-ance of the guidelines on res-ervation schemes, 90 per cent of the cables for construction of power lines were imported from China and India.

Currently, Uganda Electric-ity Distribution Company Ltd reserves the procurement of cables to manufacturing com-panies in Uganda.

In FY 2017/18, UEDCL pro-cured energy equipment worth Shs1.1bn from local compa-nies.

This is an edited version of the statement issued by the Minister of Trade, Industry and Coopera-tives ahead of the BUBU expo.

Govt committed to promoting local products

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Analysis. BUBU policy is premised on PPDA Act 2014, under which amendments are being made to among others provide for reservation scheme regulations to give force of law to the policy.

OIL AND GASaccording to statistics by the Petroleum authority of Uganda, local companies have supplied local products Shs$37.24 million equivalent to Shs141b (28 per cent) out of $133 million equivalent toShs500b, which has been spent in the oil and gas sector by the end of calendar year 2018.

Officials from Southern Range Nyanza show Trade minister Amelia Kyambadde a sample of the military wear they produce from Jinja, during the official launch of the BUBU Policy in March 2017. COURTESY PHOTO.

FRIDAY, MARCH 1, 2019 supplement. 49

Buy Uganda Build UgandaBuy Uganda Build Uganda

By iSmaiL mUSa LaDUiladu@ug.nationmedia.com

This year’s Buy Uganda, Build Uganda (BUBU) expo is a demonstration of how far the

policy meant to spur domestic con-sumption of goods and service has progressed.

According to the Assistant Com-missioner for Trade, Mr Abdul Kasule, the inaugural BUBU Expo 2019, which will take place at Kololo Independence Grounds under the theme: ‘Showcasing Uganda’s po-tential’ is part of the wider efforts to exhibit the potential and abilities of local producers to satisfy the domestic needs.

BUBU policy was formulated by the government through the Min-istry of Trade, Industry and Coop-eratives and approved by Cabinet in 2015.

The policy together with its im-plementation strategy was subse-quently launched by Prime Minister Dr Ruhakana Rugunda in 2017.

The BUBU policy is premised on PPDA Act 2014, under which amendments are being made to among others provide for reser-vation scheme regulations to give force of law to the policy.

It is intended to promote con-sumption of locally produced goods and services. While doing so, Mr Kasule, says it should be in conformity to standards and re-quired quality expected of goods and services.

For this to happen, during the two years of implementation of the BUBU policy, efforts to improve capacity of local producers and ser-vice provider were hasten.

And the targeted audience in-cluding the processors, manufac-turers and industrialist as well as those involved in services have taken heed of the government call and made strides in terms of packaging, quality and delivery of goods and services.

Government on the other hand, has kept its promise of promoting and supporting BUBU policy. For example, building the capacity of agencies such as PPDA, URA and URSB have been effectively done.

As a result, in the financial year 2017/18, UNRA awarded contracts worth about Shs3.7 trillion and of that amount, about Shs450b (about 12 per cent) was reserved for local contractors. And another Shs423b (about 11 per cent) was put aside for national providers.

“Therefore, the total value of contracts awarded to the local providers is equal to 24 per cent of the total procurement budget,” Mr Kasule says. Similarly, the value of stock procured by National Medi-cal Store from local manufacturers was worth about Shs156b. Initially all this money would have been spent buying this item outside the country.

Another scenario to demon-strate government efforts in the implementation of BUBU policy is well exemplified by Uganda Elec-tricity Distribution Company Ltd (UEDCL).

Mr Kasule said before the issu-ance of the guidelines on reserva-tion schemes, up to 90 per cent of the cables for construction of power lines were imported from China and India. But not anymore.

In addition, UEDCL has also re-served the procurement of trans-formers, transformer wiring and electrical switch gears and all the repairs involved to the local provid-ers. As a result of that, the power transmission company awarded a contract of about Shs1.1bi to the national companies.

Uganda Electricity Transmission Company Ltd (UETCL) reported that contracts worth Shs11.5b were awarded to the national providers as a result of the preference and reservation schemes.

And then there is also the Uganda Police Force. Southern Range Nyanza Ltd and other local textile industry players are some of the beneficiaries tapping govern-ment security agencies, including police, UPDF and prisons uniform deal. All the security agencies pro-cure their garments from local tex-tile industries.

Some industry players have dedi-cated a whole new production line for this purpose thus far making fabrics for the security agencies.

More progressAs a result of BUBU policy, iron

and steel sector is expanding, tex-tile sector has produced an aver-age of 130,000 bales equivalent to 24,050 tons of cotton per year and leather Sector is making unbeliev-able progress.

So far the country has an installed tanning capacity of 1.08 and 2.0 million hides and skins per year re-spectively.

There are seven medium sized footwear factories and more than 800 micro and small-scale footwear entrepreneurs in the country pro-

ducing about 1.5 million are pro-duced in the country.

There has also been increased shelf space of local products in su-permarkets as a result of increased capacity and improved standards. Shelf space for Ugandan products in supermarkets now stands at 40 per cent according to Mr Kasule. Products range from honey, sugar, detergents, cosmetics, food stuffs.

Ministries, departments and agencies of government are now procuring office furniture from Uganda Prisons Industries and other suppliers of locally made fur-

niture in accordance with the Presi-dent’s directive.

Govt agencies applauded for supporting local investors

Directive. President Museveni issued a directive to all government organisations to support the policy of buying Ugandan products.

Oner Mango juice produced by Riham. BUBU policy promotes value addition to agricultural products. COURTESY PHOTO

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“Government has kept its promise of promoting and supporting BUBU policy. For example, building the capacity of agencies such as PPDa, Ura and UrSB have been effectively done. as a result, in the financial year 2017/18, Unra awarded contracts worth about Shs3.7 trillion and of that amount, about Shs450b (about 12 per cent) was reserved for local contractors. and another Shs423b (about 11 per cent) was put aside for national providers. Therefore the total value of contracts awarded to the local providers is equal to 24 per cent of the total procurement budget,”

Mr Abdul Kasule, head of BUBU Implementation Unit in the ministry.

LOCAL PRODUCTSThe BUBU policy is premised on PPDa act 2014, under which amendments are being made to among others provide for reservation scheme regulations to give force of law to the policy. it is intended to promote consumption of locally produced goods and services.

The policy together with its implementation strategy was subsequently launched by Prime minister Dr ruhakana rugunda in 2017.

BUBU expo to showcase local capabilities

Dairy products are among the local products to be exhibited at Kololo during the BUBU expo.

COURTESY PHOTO

By iSmaiL mUSa LaDUiladu@ug.nationmedia.com

In 2017, the government intro-duced Buy Uganda Build Uganda Build Uganda (BUBU) policy,

aimed at promoting the locally pro-duced goods and services.

Despite being criticised by some members of the public, the govern-ment is determined to promote the policy as it is already beginning to pay off some dividends.

Without such proactive policies, the country’s industrial and man-ufacturing base could remain re-dundant or worse still under siege forever.

Endorsement by the Private Sec-tor Foundation Uganda (PSFU), the private sector apex body and the backing of the Uganda Manufac-tures Association (UMA), a body bringing together industrialists and manufacturers in the country, is a massive indication of confidence in the policy, regarded by several reputable analyst as the economic game changer.

To keep building the momen-tum, the Ministry of Trade, Industry and Cooperatives together with other a section of private sectors and a range of ministries, depart-ments and agencies of government have organised the inaugural Buy Uganda Build Uganda (BUBU) Expo 2019.

This, according to Ms Amelia Kyambadde, Minister of Trade, Industry and Cooperatives is one of the initiatives aimed at creating more awareness about the BUBU policy, which will take place at Kololo Independence.

The three-day exhibition will be held from March 7 to March 9 un-der the theme: ‘Showcasing Ugan-da’s potential’. The exhibition will provide a platform to showcase lo-cally produced products.

It will also feature the National Women Entrepreneurs’ Confer-ence as well as awards dinner to recognise the BUBU compliant government institutions, local pro-ducers and service providers with quality products and competent local service suppliers. This will be in addition to a networking confer-ence between government and the local private sector players.

Ms Kyambadde says the ex-hibitors have been drawn from a broader scope comprising con-struction, energy, textile, station-ary, footwear, agricultural products, dairy, and pharmaceuticals among others.

“We are targeting more than 300 MSMEs as exhibitors and over 140,000 show-goers during the three days.”

She adds: “I urge all Ugandans to turn up in big numbers at Kololo Independence Grounds to ap-preciate the potential we have in Uganda.”

Corporate social responsibility During the three days of the

expo, a number of institutions will offer corporate social responsibility services.

There will be free medical ser-vices from Nakasero Hospital, as well as free eye checkup, thanks to Dr Agwarwal’s Eye Hospital. Also in attendance will be the Makerere Joint AIDS Program, Reproduc-tive Health Uganda, AAR Health-care, Point of Touch Nutrition and Health Services, Naguru Hospital; AHF Uganda Cares, Elpa Uganda and Uganda Blood Transfusion services.

Free hands on skills training in cosmetics will be provided. On those very days lesson on juice and soap and brickets making will be offered by Uganda Industrial Re-search Institute.

And free registration of busi-nesses by Uganda Registration

Services Bureau will also be on the cards. You will also have an oppor-tunity to be advised on electricity use by Electricity Regulatory Au-thority.

PatriotismBuy Uganda Build Uganda Policy

according to Ms Kyambadde is the highest level of Patriotism, “that we must all embrace as citizens, investors and stakeholders in the Ugandan economy.” With BUBU the country will attract more invest-ment and reduce on her import bill. It will also help us strengthen our national capacity to undertake ma-jor national infrastructural projects with appreciable national content.

Pearl Dairies (Lato milk), Roof-ings Group, Atiak Sugar, Southern Range Nyanza Ltd, Riham Group, Alam Group, Vivo Energy, Plascon

Ltd, Nile Agro, Premier Distillers, Steel and Tube and among others are some of the example that ex-emplifies BUBU policy.

As for the private sector, BUBU policy is one of the best thing that has ever happened to the country. With it, the economic opportuni-ties are abound. And for that, they pledge to embrace it and urge the population to follow suit for its benefits is for everybody in terms of employment, increased invest-ment and revenue which in turn will be used in building of social amenities and other facilities that enhance quality of life.

Implementation The guidelines on reservation

schemes to promote local content in public procurement have been circulated to all accounting officers who have brought this to the atten-tion of all contract committees and members of the procurement and disposal unit of the procuring and disposing entities in the country.

The implementation of BUBU policy under public procurement is at national level and done under guidelines, which are mandatory and are being incorporated into the new Procurement Bill to be ta-bled for approval in Parliament this year. As for the ordinary channels of commerce where the population gets consumer goods, efforts are underway to engage supermarket owners and traders in local markets to improve adherence to standards on products, display and packag-ing.

Buy Uganda Build UgandaBuy Uganda Build Uganda

50 supplement. FRIDAY, MARCH 1, 2019

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Growth . The implementation of BUBU policy has enormously contributed to the growth of local industries.

MAIN OBJECTIVES OF BUBU POLICYThe Buy Uganda Build Uganda (BUBU) policy was formulated by government through the ministry of Trade, industry and Cooperatives and approved by Cabinet in 2015. The policy together with its implementation strategy was subsequently launched by Prime minister Dr ruhakana rugunda in 2017.

The BUBU policy is premised on PPDa act 2014, under which amendments are being made to among others provide for reservation scheme regulations to give force of law to the policy. The following are the objectives of the policy;

a) Promotion of consumption of local goods and services.

b) Promotion of conformity to standards to guarantee quality goods and services.

c) Provision of capacity building programmes to local suppliers of goods and services.