The story of manufacturing in Uganda is one of transformation, resilience, and potential. From its agrarian roots to a thriving manufacturing economy though not yet at its full potential with an average capacity utilization of 54.3%, Uganda’s industrial journey reflects broader economic shifts and societal changes over the decades. This brief explores the historical context, development milestones, challenges faced, and recommendations for a thriving manufacturing sector in Uganda.
Historical Context
The Industrial Revolution in Uganda can be traced back to the colonial periods when the country was predominantly reliant on agriculture a time when traditional small-scale industries revolved around agro-based products basically cotton ginning, coffee processing, fish processing, and grain milling. The post-colonial period witnessed the government pushing for industrialization, although growth remained stifled by political instability during the times of President Apollo Milton Obote, Idi Amin Dada, and the liberation war of the current ruling government under the leadership of President Yoweri Kaguta Museveni coupled with the limited infrastructure that supported industrialization such as electricity, Roads, Market access, technological developments, financing solutions and many other factors.
The initial industrial landscape, dominated by small-scale operations, began to change significantly in the 1990s. The introduction of fish processing for both local and international markets marked a pivotal turning point, signalling the country’s ability to innovate and adapt. These thriving industries laid the groundwork for more robust manufacturing activities, driven by the demand for diverse products.
Development Over the Years.
Post 1986 liberation war, Uganda progressed through the industrial revolution and it was applauded for its economic policies of government divestiture, privatization, and currency reforms and these saw certain sectors experience accelerated growth. A case in point is the textile and garment industries were among the pioneers of this shift such as Nyanza Textile Industries Limited 1954, although they have faced challenges in recent years due to competition and changing consumer demands over imports. Meanwhile, beverages such as Crown Beverages and Coca-Cola company established in the 1990s and tobacco industries such as British American Tobacco in the 2000s carved out impressive niches, contributing significantly to economic diversification.
Uganda’s industrial growth is the rapid expansion of the chemical industry, which began producing a diverse range of products from pharmaceuticals ( Abacus Parenteral Limited 1995 and Rene Industries Limited 1998 to household materials. This expansion showcased the country’s capability to meet both local needs and export demands. The mineral sector also emerged, exemplified by the establishment of steel rolling mills and metalworking industries such as the East African Steel Corporation by the Madhivani group (1960s), the Alam group of companies (1987), the Roofings Group (1995), Steel and Tube Ltd (2004) and Tembo steel mills (2004), thereby establishing a solid industrial base.
Kampala then emerged as Uganda’s primary industrial hub, shifting the focus from Jinja, which was once the epicentre of industry. This transformation was largely attributed to Kampala’s strategic location and improved infrastructure, particularly with the establishment of the Kampala Industrial and Business Park (KIBP) in Namanve. KIBP became a central site for various industries, attracting both local and foreign investors, and significantly contributing to the country’s manufacturing output.
This exacerbates the regional disparities in industrial development which have been stark, especially in northern Uganda, which has lagged due to decades of conflict led by the Lord’s Resistance Army (LRA). The LRA’s insurgency hindered growth and investment in the region, leaving it with minimal industrial activity compared to the central region where Kampala is located. However, with the return of peace, efforts are underway to revitalize northern Uganda, aiming to unlock its development potential through infrastructure improvements and investment incentives. As of February 2025, there are ongoing initiatives to further enhance industrial activities across Uganda, with a focus on creating a more balanced economic landscape that includes all regions.
Employment Patterns
The growth of the manufacturing sector has significantly impacted employment from the traditionally unskilled labour force to the skilled labour force with an increase in the number of school-going population to acquire the necessary skills needed for a robust industrialization Agenda. In 2007, the sector employed 72,200 individuals (UBOS), which increased to 130,000 by 2010 (UBOS) to the current figure of 3.5 million (7%) of the total population employed and indirectly about 3 million Ugandans, although a traditional gender bias remains evident with a largely male-dominated workforce. The importance of large firms is underscored, as those employing over 100 people dominate, reflecting the need for standard production to satisfy rising demand. Manufacturing contribution to GDP has consistently risen from 6.3% in 1982 to the current 15.6% as of 2024, contribution to domestic tax revenue of up to 30% of total revenue and now consuming up to 70% of electricity generated locally.
The Uganda Manufacturers Association (UMA) plays a critical role in the evolution of the manufacturing sector in Uganda as the largest and most influential member organization representing manufacturers’ voices and interests. With membership growing from 26 companies in 1988 to over 1,961 today, UMA has advised the government on transformative policies that support local industries ranging from tax policies and administration to standards compliance, and regulatory oversights. UMA has also promoted the initiative, “Buy Uganda Build Uganda” (BUBU), an initiative aimed at promoting exports through value addition and import substitution through encouraging foreign direct investment thus encouraging the consumption of locally produced goods, vital for reducing the import bill and creating more jobs.
UMAs INITIATIVE TO SUPPORT SUSTAINABLE MANUFACTURING SECTOR
Policy research and Advocacy. UMA is committed to promoting policies that foster the growth of local industries and ensure sustainable development. UMA works closely with the government and other stakeholders to advocate for tax incentives, better trade policies, and improved infrastructure, which are essential for manufacturers. Additionally, UMA encourages businesses to source materials locally, reducing reliance on imports and supporting the local economy. Their efforts also include pushing for protective measures like the East African Community Common External Tariff, which safeguards Ugandan industries from unfair competition. Through these initiatives, UMA aims to strengthen the economy and promote responsible manufacturing practices.
Promoting Green Manufacturing and Environmental Responsibility. Adopting Sustainable Practices. The Uganda Manufacturers’ Association (UMA) actively promotes sustainable practices, including energy efficiency, waste management, and reduced emissions in manufacturing processes. The association helps its members adopt clean production technologies and green practices to minimize environmental impact while encouraging the use of renewable energy sources like solar and biomass to lower carbon footprints. Notably, many Ugandan manufacturers are embracing solar energy for their production, with UMA reporting that approximately 15% of manufacturers have integrated renewable energy solutions into their sustainability efforts.
Skills Development and Capacity Building. Training Programs. UMA enhances manufacturers’ skills through workshops and training focused on best practices, innovation, and sustainability. These programs empower them to adopt sustainable practices and technologies in their operations. Additionally, UMA collaborates with educational institutions and international organizations to boost technical skills development, strengthening the capacity of Ugandan workers. A key initiative is the Skills Development Program, in partnership with the Uganda Industrial Research Institute (UIRI) and Makerere University, aimed at improving engineering and manufacturing skills for local industries.
Promoting Sustainable Supply Chains. Encouraging Sustainable Sourcing. UMA advocates for sustainable and ethical sourcing of raw materials by urging manufacturers to partner with local suppliers and implement eco-friendly practices throughout the supply chain, from procurement to delivery. The organization focuses on enhancing quality standards and certifications to align products with international sustainability benchmarks, such as ISO 14001 for Environmental Management Systems and ISO 9001 for Quality Management Systems. A key initiative includes collaborating with the Uganda National Bureau of Standards (UNBS) to assist Ugandan manufacturers in meeting these standards, thereby facilitating their access to global markets.
Infrastructure Development and Investment Promotion. Advocating for Industrial Parks. UMA champions the establishment of industrial parks and free trade zones equipped with essential infrastructure—such as electricity, water, and transportation—to enhance the efficiency and sustainability of manufacturing operations. These initiatives aim to attract investment, support local businesses, and generate job opportunities. Additionally, UMA emphasizes investing in green technologies, like energy-efficient machinery and waste-to-energy solutions. Notable examples of this infrastructure development include the Kibuli and Jinja Industrial Parks, which foster a sustainable manufacturing environment.
Access to Financing and Resources. Financial Support for Sustainability Projects: UMA collaborates with financial institutions and development partners to facilitate funding for sustainable projects in the manufacturing sector, including clean energy initiatives and equipment modernization. By focusing on small and medium-sized enterprises (SMEs), which comprise over 50% of Ugandan manufacturers, UMA plays a vital role in promoting sustainable industrial growth. Through strategic partnerships, UMA enables these SMEs to secure essential financing for equipment upgrades and capacity-building initiatives that support sustainability.
Increasing Export Promotion and Market Access. UMA advocates for policies that enable Ugandan manufacturers to access regional and international markets while promoting fair trade practices and sustainable exports. By pushing for higher quality standards and improved packaging, UMA enhances the competitiveness of Ugandan products in key industries like agriculture, textiles, and food processing. As a result of these efforts, Uganda’s manufacturing exports grew by 15% in 2023, driven by better quality and a commitment to sustainable practices, according to Uganda Revenue Authority data.
Challenges Facing the Manufacturing Sector
Despite the promising trajectory, Uganda’s manufacturing sector faces numerous challenges.
Unfavourable Tax Policies. The high tax burden on manufacturers limits profitability and reduces competitiveness.
Administrative Hurdles. The complex regulatory environment and administrative bottlenecks create barriers to efficient business operations.
Compliance and Standards. Meeting local and international standards can be a tedious process, often hindering the ability of manufacturers to compete globally.
Market Access Issues. Limited access to regional and international markets impacts growth potential, as the influx of substandard goods from other regions creates unfair competition.
Infrastructure Deficiencies. Inadequate infrastructure, particularly in transportation and energy, hampers productivity and the ability to scale operations.
Informal Sector Growth. The prevalence of informal businesses undermines formal operations, leading to lost tax revenue and market distortions.
Recommendations for a Thriving Manufacturing Sector
To unlock the potential of Uganda’s manufacturing sector, several strategic actions are necessary.
Policy Reform. Simplifying tax regimes and reducing the overall tax burden will encourage growth and attract investment. Streamlined regulations can facilitate easier entry and operation for businesses.
Infrastructure Development Investment in infrastructure transport, energy, and technology is crucial. Enhancing logistics and transportation networks will reduce costs and improve efficiency.
Capacity Building. Training programs aimed at enhancing the skills of the workforce can improve productivity and foster innovation. Industry-academic partnerships should be encouraged to ensure alignment between education and market needs.
Support for Small and Medium Enterprises (SMEs). Providing easier access to financing and resources can empower SMEs, enabling them to thrive and contribute significantly to the economy.
Market Expansion Initiatives. Engaging in trade agreements and regional integration can open new markets for Ugandan manufacturers, significantly enhancing export capabilities.
Promotion of Local Products. Continued advocacy for the BUBU policy will create a fairer playing field for local products and help build consumer confidence in locally manufactured goods.
Investment in Research and Development. Encouraging innovation and research within the manufacturing sector can drive new product development and improve efficiency.
The evolution of the manufacturing sector in Uganda reflects a journey of potential, rich with opportunities amid challenges. To build upon the progress made and ensure sustainable growth, concerted efforts from the government, industry players, and stakeholders are essential. By addressing the existing issues and strategically positioning the sector, Uganda can transform its manufacturing landscape, enriching the economy and improving the livelihoods of its people. Through innovation, collaboration, and targeted interventions, the future of Uganda’s manufacturing sector looks bright, promising enhanced industrial capacity, job creation, and economic resilience.
Director Policy Research & Advocacy – Allan Ssenyondwa – Uganda Manufacturer’s Association
