The Monitor (Kampala)

28 September 2009

Uganda: Government Renews Support for Local Textile Industry

Kampala — Government has pledged full support for the development of the textile industry.

Industry and Technology State Minister Rev Simon Lokodo and his Trade counterpart Gagawala Wambuzi said on September 24 the country's textile industry has the potential to grow and create numerous job opportunities for Ugandans as well as satisfy the domestic apparel demand.

The two, who officiated the opening of an event at the Textile Development Agency (Texda) in Kampala, reiterated the need for scaling up production in the cotton sub-industry to support the development of the textile sector.

"This is an opportunity that should not go to waste," Rev Lokodo said of the need to promote forward linkages in cotton production.

The sentiments come though, when the cotton sub-sector is still grappling with challenges including low market prices against high production costs and climatic changes that have tended to disfavour constant production.

As the two ministers made the remarks, the country was at the same time patching-up losses after the heavily state financed Apparel Tri-Star plant at Bugolobi, which was to support the cotton industry was shut due to poor management and financial swindling- a development that was wholly blamed on then Managing Director, Vellupilai Kananathan.

By the time of its closure in October 2006, the Tri-Star investment that received a government guaranteed loan of $5 million (about Shs10 billion) from the Uganda Development Bank, had only exported products worth $4.5 million (approximately Shs9 billion) duty-free to the American market under the African Growth Opportunity Act (AGOA).

Kenya, Uganda's closest trading partner had by the same time, exported products worth $278 million (about Shs556 billion).

The shutting down of the plant that had been granted a tax waiver on all imported production equipment thwarted efforts by government to provide a steady market for more than 5 million struggling cotton farmers across the country.

The refurbished Textile Development Agency located in Kampala, the ministers said, would offer an opportunity for interested Ugandan entrepreneurs to manufacture high quality hand-woven fabrics and garments.

The company is set to offer training services to small-scale women entrepreneurs in handloom weaving; dyeing, printing, surface design and basic design.

Besides, it will train entrepreneurs on garment construction, new product development and business management skills.

"Let us face reality, get to work and let the world know that Uganda has something to offer to the global market," Trade State Minister Gagawala Wambuzi said.

He said he has on multiple occasions been humiliated by the increasing demand for Ugandan products yet the country has little to sell to the world market.

Uganda under the AGOA pact was given by the American government a leeway to export products including apparels to the US market at zero duty.

Government solely blamed its failure to meet the market demand on non-tariff barriers in the market, which made it difficult for Ugandan products to penetrate into the American shops.

The ministers said they would recognise and support through tax exemptions and holidays entrepreneurs involved in apparel production.

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