Uganda’s factories seek cheaper credit and a bigger share of state buying

Uganda’s manufacturers buy more than 70% of the country’s electricity output, according to industry leader Abid Alam. Yet reliable power at competitive prices remains one of their central demands. At the opening of the 32nd Uganda International Trade Fair in Kampala, factory leaders put that tension alongside another obstacle: businesses making long-term investments must repay commercial loans over periods they say are too short.

According to Nile Post Uganda (direct), affordable finance and stronger support for domestic production dominated the opening at the Uganda Manufacturers Association (UMA) grounds in Lugogo. The 10-day fair, running from October 2 to 11, has attracted more than 1,000 exhibitors, with organisers expecting about 150,000 visitors. Behind the product displays is a broader challenge: how to turn Uganda from a market for imported goods into a larger producer and exporter.

Factories need time to repay

Alam, chairman of UMA’s Advisory Council, said manufacturing contributes 16.5% of gross domestic product—the value of goods and services produced in the economy—and supports more than two million jobs. He also credited the sector with more than 30% of national tax revenue. But high borrowing costs, energy prices and limited productivity continue to weigh on factories. Industrial investment needs patient capital, he argued: money that gives businesses enough time to recover their costs before repayment falls due.

His requests went beyond cheaper loans. Alam called for efficient transport, industrial land equipped with infrastructure, timely government payments and prompt refunds of value-added tax, a tax charged on sales. Consistent tax treatment and competitively priced electricity were also priorities. These demands focus on the conditions needed to keep production moving, alongside the push to expand manufacturing capacity.

Turning public spending into factory orders

UMA board chairman Aga Sekalala Jr urged the government to make Buy Uganda, Build Uganda more effective through public procurement—the goods and services bought by state institutions. As a major buyer, government could provide a substantial market for locally produced cement, steel, cables, pipes, paint and furniture, he said. He also sought predictable industrial electricity tariffs and affordable credit with longer repayment periods. His argument was that Uganda’s growth ambitions require more processing and finished products, rather than simply larger sales of raw materials.

Sekalala’s message: Uganda’s tenfold growth ambition depends on finishing more products, not just selling more raw materials.

Representing President Yoweri Kaguta Museveni, Trade, Industry and Cooperatives Minister Sanjay Tanna reinforced the call for value addition—processing materials into higher-value products. During a tour led by UMA Executive Director Dr Ezra Muhumuza Rubanda, he asked exhibitors about local sourcing. Tanna said stronger domestic supply chains would support jobs and keep more wealth within Uganda. The president’s message highlighted innovation and production in agro-processing, pharmaceuticals, steel and fertiliser, among other industries.

The fair also offers a direct test of consumer demand for Ugandan goods. Regina Namuwonge, who chairs UMA’s Communications, Marketing and Events Committee, said a new feature, Black Deals at UMA, brings together more than 4,000 verified offers from over 400 Ugandan manufacturers and traders. Organisers say shoppers can buy directly from producers at factory prices, putting the local-buying campaign into practice.

With Uganda targeting a $500 billion economy by 2040, the next test is whether calls for better financing, power and local purchasing translate into more factory activity. Alam set out a five-year goal of additional production shifts, more agricultural processing and greater output of medicines, electrical equipment and construction materials. Manufacturers also have obligations, he said: deliver quality, fulfil commitments, train workers, pay taxes and help smaller businesses become dependable suppliers.