The Ugandan government has resolved to start the commercial production of motor vehicles after the process had stalled for years.
In a meeting chaired by the country’s president Yoweri Museveni on Monday, the Ugandan cabinet directed the ministry of finance to set aside over 20 billing shillings (about 5.6 million U.S. dollars) next financial year to kick start the construction of an assembly plant. The idea of Uganda manufacturing cars started in 2011 when students at the country’s Makerere University built the Kiira EV (Electronic Vehicle) and the solar-powered Kayoola EV bus in 2016. Following these successes, the government in 2014 allocated land in the eastern district of Jinja to Uganda’s Kiira Motors Corporation and China Engineering Limited to build car manufacturing plants, with a plan of starting production by this year. Work had not yet started.
In the Monday meeting, according to a government statement issued on Tuesday, Cabinet approved a road map for the commercialization of the Kiira EV Project, noting that it must be phased. The Ugandan government said the car assembly project would stimulate investment in the production of among others car components, creating over 2,000 direct jobs and 12,000 indirect jobs. According to Kiira Motors Corporation, the assembling plant is expected to have an installed capacity of 5,000 vehicles. The market entry point, according to Elioda Tumwesigye, Uganda’s minister of science, technology and innovation, would be assembling cars in partnership with reputable car manufacturing companies. “This should progressively position the Kiira Vehicle plant for growth in cutting-edge vehicle technology innovation,” Tumwesigye was quoted as saying by the state-owned New Vision on Wednesday.
Uganda is optimistic that the growing middle class in the country and in the region would provide market for the cars. Uganda’s population is estimated at over 35 million people and that of the East Africa totals to over 150 million people.According to government figures, Uganda imports 50,000 cars annually. At the regional level, the number of vehicles imported into East Africa each year has grown to over 250,000 and is expected to climb to 500,000 by 2030. The East African region brings together Uganda, Kenya, Tanzania, Rwanda, Burundi, and South Sudan. The region relies on imported used vehicles mainly from Japan. Sales of new cars are low and are mainly purchased by government and international agencies. The move by Uganda came as the East African leaders are pushing for the development of the automotive manufacturing industry in the region.
The leaders have set a target that by 2019, they will start phasing out the importation of used cars. Uganda has already proposed to ban the importation of all vehicles of eight years old or more. Some legislators have welcomed the government’s proposal, arguing that it will resolve the problem of importation of old vehicles after tax measures failed. “Why should we be a dumping ground? When you go to some countries — let me use the example of Namibia — you cannot import a vehicle which is more than five years old whereas in Uganda you can import a vehicle of 1998,” Henry Musasizi, the head of Parliament’s finance committee told Daily Monitor. Kenya and Rwanda have already banned the importation of cars that are more than 10 years old on the road. The push to ban the importation of used cars has had car manufacturers contemplating to set up their businesses in the region. Some are already setting up assembly plants in the region.