The government has issued an ultimatum to local manufacturers of Cement that it will open it will expose them to foreign competition by allowing imports of cement in three weeks.
The warning was issued by Trade and Industry minister Amelia Kyambadde in a meeting with cement manufactures following public outcry over the escalation of the cost of cement. In a space of about 2 months, a 50kg bag of cement has shot up from UGX30,000 to between UGX36000 to UGX40,000..
Kyambadde observed that they have discovered that high demand for cement to huge projects outside Uganda was the biggest casue of the shortage. She advised manufacturers to increase production to cover up for the decicit or face foreign competition.
“Due to public outcry and the country’s concern we have met with our cement manufacturers and we noticed that our manufacturers have tenders with some outclients outside the country whom they give a bigger number of metric tons of cement. We have advised them to give them to cutback om those supplies until demnd stablses bunches as the domestic demand normalizes” said minister
“We have given our local manufacturers an ultimatum of 3 weeks and in case they fail we might be propelled open the industry to the private sectors and start importing cement, we would have done this already but since we have to protect our local industries and factories this is why we have given them this grace period in case the problem persist by May we shall let it private sector” added minister
According to Kyambadde, price hiking is due to high cement demands due to huge projects that are running in the country such as construction of Jinja bridge, Karuma dam, Isimba dam and Oil and gas industry, exports in the region (Uganda exports to Democratic Republic of Congo (DRC), Rwanda, Central Africa Republic (CAR), Burundi and South Sudan), unstable power, some factories shut down like Tororo and because of this construction rates in the country have dropped 1% from 30% to 29%. although many people are now in the real estates.
“Am glad that all these projects had my cry of Buy Uganda Build Uganda (BUBU), in the past big projects used to export cement but after BUBU all big projects now support our local industry however it looks too awkward that our local manufacturers didn’t prepare for this, so we are giving them a grace period to sort themselves” added minister.
However manufacturers also asked for a 10% tax reduction on clinker (a row material used in cement manufacturing) which they export which the minister promised to see finance minister to see it coming to pass. According to Hima Cement factory the shut down has hindered them from producing at 100%, the few output cannot allow them satisfy their market so but their major concern was about Umeme’s unreliable power which has also created retardation in production. U
There are also unconfirmed report that whole sellers are raising prices to cover ip for incresse cost of transport since NRA no longer allows them to carry excess tonage to protect roads.