13 March 2019

Uganda: Chinese Supermarkets Shun Local Goods - Traders

When Dorothy Kimuli started her company Kims Natural Chilli Sauce some years back, her dream was to capture the local market. Her first target was supermarkets whose shelves were full of imported chilli.

"I started with high hopes. I believed that since I was dealing in organic chilli, my goods would be quickly taken up by local supermarkets, something that was not to be," she said.

Kimuli explained that her goods were first rejected by supermarkets because they were not certified by Uganda National Bureau of Standards (UNBS) and, therefore, did not meet standards.

"Actually at first, I did not have any certification but I worked with Uganda Small-Scale Industries Association, (USSIA), and UNBS and I was certified. Some supermarkets later accepted and put my goods on their shelves. The demand has been good but the Chinese have completely refused to take on most local products," she said.

"Those who pretend to buy just buy a dozen or two which they put on their shelves; they will pay you when all the stock is completely finished, this becomes costly to small-scale traders and I think it's a way of putting local goods at bay."

Her complaints came up during 'Make BUBU work for the growth and competitiveness of Uganda's small and growing businesses' conference organised by Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI), USSIA and Federation of SMEs -Uganda (fsme).

She also said that Chinese supermarkets also hide behind 'international standards'. They claim that although local manufacturers have UNBS certification, it is not enough. Veronica Namwanje, the executive secretary, USSIA, said although the BUBU policy provides an important regulatory foundation for the support of production, purchase, supply and consumption of locally made goods and services; it is non-binding.

"SMEs are at the mercy of supermarkets; there is nothing binding and it should be noted that when the BUBU policy was developed for implementation between 2014 and 2019, some 20 per cent procurement by value would be of local products and services, and 50 per cent of shelf space in supermarkets would be populated by local products but nothing has been achieved," she said.

Namwanje added, "Five years later, this is yet to be realised. In fact, none of the supermarkets has met the requirement to have 50 per cent of their shelf space populated by local products."

USSIA said some hotels, on the other hand, still employ the services of foreign suppliers even for services such as security and front-door operations. According to Namwanje, government procurement whose requirement is 20 per cent by value is too low even compared to other partner states for example Kenya, which requires 40 per cent of public procurement budgets for local products and services.

"Therefore, in order to enforce these requirements, a law should be enacted to make them mandatory and subject to a penalty upon failure to adhere to these requirements," she said.

Faith Lumonya, a programmes officer with Seatini, said facilitation of the district commercial officers (DCOs) to execute their duty of securing shelf space for MSMEs' products in supermarkets within their districts should be done.

She observed that in order for the DCOs to effectively deliver on their mandate and further deliver on the directives of the minister, they require effective facilitation. Currently, only 25 of the 127 districts have DCOs.

While effort has been made by a number of local producers to supply the few supermarkets that have allowed them some shelf space, many consumers are not aware which products are locally made and which products are not.

Lumonya said, "We applaud government for its effort to launch the BUBU logo and recommend that all locally made products should be labelled with this BUBU brand mark to indicate it to consumers."

Seatini believes this will not only go a long way in ensuring that products are marketed as BUBU products but that it will also support the awareness creation campaign for the BUBU policy.

According to USSIA, micro, small and medium enterprises employ more than 2.5 million people and are responsible for the production of approximately 80 per cent of the country's value added products.

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