TABLE OF CONTENTS

FOREWORD .................................................................................................................................................... II
LIST OF ACRONYMS ................................................................................................................................ III
EXECUTIVE SUMMARY .......................................................................................................................... IV
1.0 INTRODUCTION .................................................................................................................................... 1
1.1 TEXTILE POLICY VISION ......................................................................................................................... 2
1.2 MISSION STATEMENT ............................................................................................................................. 2
1.3 THE SPECIFIC OBJECTIVES FOR THE NATIONAL TEXTILE POLICY: .................................................... 2
2.0 SITUATION ANALYSIS: - STRENGHTS, WEAKNESSES, OPPORTUNITIES, AND
THREATS (SWOT) ANALYSIS .................................................................................................................. 4
2.1 STRENGTH ............................................................................................................................................... 9
2.1.1 Conducive business environment and Good Political will ................................................ 9
2.1.2 Availability of idle capacity in the private sector ................................................................ 9
2.1.3 Presence of trainable labour force. ......................................................................................... 9
2.1.4 Availability of abundant good quality cotton and adequate ginning capacity. ........ 10
2.1.5 Huge domestic/regional/International markets. .............................................................. 10
2.2 WEAKNESSES. ....................................................................................................................................... 11
2.2.1 Export of unprocessed cotton. ................................................................................................ 11
2.2.2 Low spinning and weaving capacity. .................................................................................. 11
2.2.3 High cost of finance. ................................................................................................................. 12
2.2.4 High energy costs. ..................................................................................................................... 12
2.2.5 High Transport costs ................................................................................................................ 13
2.2.5 High Transport costs ................................................................................................................ 14
2.3 OPPORTUNITIES. ................................................................................................................................... 14
2.3.1 Great market potential ............................................................................................................. 14
2.3.2 Commercial cotton farming ..................................................................................................... 15
2.3.3 Exploration of the organic cotton niche. .............................................................................. 15
2.4 THREATS ................................................................................................................................................ 15
2.4.1 Unfavourable Competition ....................................................................................................... 15
2.4.2 Counterfeit and Second Hand articles. ............................................................................... 16
3.0 GUIDING PRINCIPLES .................................................................................................................. 16
4.0 POLICY MEASURES FOR THE REVIVAL OF THE TEXTILE SUB-SECTOR ................ 17
4.1 TO IMPROVE THE LOCAL BUSINESS ENVIRONMENT. ......................................................................... 17
4.2 TO SUPPORT TECHNOLOGICAL UP-GRADATION AND MODERNIZATION............................................ 17
4.3 TO STRENGTHEN TEXTILE SUB-SECTOR SUPPORT INSTITUTIONS ..................................................... 18
4.4 TO INCREASE THE RAW MATERIALS SUPPLY BASE ............................................................................. 19
4.5 TO ENHANCE HUMAN RESOURCES DEVELOPMENT .......................................................................... 19
4.6 TO SUPPORT A REGIONAL COTTON-TEXTILE SUB SECTOR DEVELOPMENT STRATEGY. ................. 20
4.7 TO STRENGTHEN DOMESTIC MARKET DEVELOPMENT. ................................................................... 21
5.0 IMPLEMENTATION, MONITORING AND REVIEW MECHANISM ..................................... 21
6.0 CONCLUSION ....................................................................................................................................... 22
ANNEX: IMPLEMENTATION STRATEGY .......................................................................................... 23
 FOREWORD
Transformation of Uganda’s economy is one of the fundamental goals and commitment of
the Government of the Republic of Uganda.

Uganda is a cotton producing country that once recorded an annual production of 254,000
bales, and with the potential of producing 1,000,000 bales at full employment level.
However over 90% of the lint produced in Uganda is exported at a miserable price of less
than US$ 1 per Kilo, and is entirely dependent on the increasingly fluctuating international
commodity prices. This has resulted into loss of value to Uganda since conversion of such
lint translates into 8-10 fold growth in value when conventional cotton is processed fully
into garments. The persistency of the above situation limits the tax-base, exports,
purchasing power, employment creation, and generally inhibits economic transformation
which in part explains the deteriorating terms of trade for Uganda with all major trading
partners.

Following the coming into force of the National Industrial Policy in February 2008, priority
Sub Sector Policies like the National Textile Policy, had to be formulated in order to realize
its broader objectives. The “National Textile Policy, a Framework for the Textile Sub
Sector Transformation, Competitiveness and Prosperity” is formulated with the view to
enhancing the performance of the agro-based industries in the country, so as to increase
value addition on locally available raw materials and export of manufactured goods. This
National Textile Policy contains a framework to guide specific policy actions/interventions
for the revival and sustainability of investments in the sub sector in addition to offering
policy makers and private sector operators a coherent direction to guide co-ordinated
performances and implementation of the policy.

I am aware that, the National Textile Policy is a product of extensive and prolonged
consultations involving Government officials, private sector executives, academia, donor
community, and mass media. In this sense the process has been as important as the product
in building consensus on the measures and strategies needed and set out to meet Uganda’s
vision. The process has also been able to align both private and public sectors in a solid
partnership for implementing and executing this policy document.

Finally, I am pleased to present to the people of Uganda, The National Textile Policy, and I
appeal to all the stake holders to ensure its speedy implementation to transform Uganda
from a peasant society into a modern, industrial, and prosperous country.

For God and my country

Yoweri Kaguta Museveni

PRESIDENT OF THE REPUBLIC OF UGANDA

ii
 LIST OF ACRONYMS

AGOA Africa Growth Opportunity Act

ATM African Textile Mills
CDO Cotton Development Organisation
COMESA Common Markets for Eastern and Southern Africa
EAC East African Community
EPA Economic Partnership Agreement
EU European Union
GATT General Agreement on Tariff and Trade
GOU Government of Uganda
ICT Information and Communication Technology
LAP Libyan Africa Investment Portfolio
MAAIF Ministry of Agriculture Animal Industry and Fisheries
MES Ministry of Education and Sports
MFA Multi Fiber Agreement
MFPED Ministry of Finance Planning and Economic Development
MTTI Ministry of Tourism Trade and Industry
NYTIL Nyanza Textile Industries Limited
PPDA Public Procurement and Disposal of Assets
RIUMP Regional Industrial Upgrading and Modernisation Programme
SADC Southern African Development Cooperation
SME Small and Medium Enterprise
TEMAU Textile Manufacturers Association Uganda
TEXDA Textile Development Agency
UDB Uganda Development Bank
UDC Uganda Development Corporation
UEPB Uganda Export Promotion Board
UGIL Uganda Garment Industries Limited
UIA Uganda Investment Authority
UIRI Uganda Industrial Research Institute
UNBS Uganda National Bureau of Standards
UNIDO United Nations Industrial Development Organisation
UPE Universal Primary Education
URA Uganda Revenue Authority
USE Universal Secondary Education
WTO World Trade Organisation

iii
 EXECUTIVE SUMMARY

Uganda is a cotton producing country that has recorded an annual

production of 254,000 bales as the highest output in the last five years, with
the potential of producing 1,000,000 bales at full employment level.
However over 90% of the lint produced in Uganda is exported at a miserable
price of less than US$ 1 per Kilo, resulting into loss of value to Uganda
since conversion of such lint translates into 8-10 fold growth in value when
conventional cotton is processed fully into garments while for the case of
organic cotton the value can grow to 15 fold. The export of lint has therefore
over the years resulted into complication of the “Prosperity for All” program
in that, farm gate prices for cotton continues to degenerate due to limited
competition for the lint owing to minimal local value addition.

Following the coming into force of the National Industrial Policy in February
2008, it became apparent that to implement the Industrial Policy, sub
sector policies had to be formulated as well. The Government of Uganda
identified the cotton-textile sub sector as a priority with the view to
enhancing the performance of the agro-based industries in the country, so
as to increase value addition on locally available raw materials and export of
manufactured goods to improve the balance of payments position that has
over the years deteriorated owing to the pre-dominance of raw material
exports. In order to improve efficiency and competitiveness of textile
industry on a sustainable basis; the key areas inhibiting the optimal
performance of the textile sub sector have been identified as: lack adequate
management expertise, poor technology, absence of trained technical
workforce, unfair trading practices and absence of level playing field due to
market distortions arising from export incentives especially in Asia, high
cost of doing business due to very high cost of finance and supportive
infrastructure; low industrial productivity, weak domestic trade policies that
encourage imports at the expense of local sourcing.

The Ministry of Tourism, Trade and Industry after an extensive consultative

process covering other Ministries, agencies, academia and the private sector
which revealed that there are overwhelming economic justifications for the
revival of the cotton and textile sector in Uganda, has formulated a National
Textile Policy and Strategy. Special attention has been given to retention
and attraction of new investment into the sub sector, developing human
resources to address shortage of trained personnel in clothing and textile
technology, technological up-gradation, critical infrastructure development,
addressing cost of doing business, resolving present market distortions that
result into unfair competition between locally made textiles and imports and
supporting local textile sourcing by the public sector. It is evident that

iv
addressing the inhibiting factors to optimal performance of the textile sector
in Uganda will translate into optimal performance of the textile sub sector
that is key in the poverty eradication campaign in Uganda given that abject
poverty is most prevalent in cotton producing areas relative to other parts of
the country. Above all, improved market share by local producers shall
eventually enable expansion of firms and attraction of new investment into
the sub sector to increase local lint value addition which is required
critically for Uganda to take full advantage of the great market potential
existing in EAC, COMESA, SADC, E.U, AGOA and many others.

The situational analysis indicated that the Ugandan textile sub-sector is

positioned as follows:

Strengths:
o Conducive business environment and good political will; the
government economic policy encourages value addition to agricultural
commodities, such as cotton, and employment generation towards
poverty alleviation.
o Availability of idle capacity in the private sector; Idle infrastructure
includes, Lira Spinning Mill, African Textile Mill, Mulco, and LAP
Textiles Limited.
o Presence of trainable labour force
o Availability of abundant good quality cotton and adequate ginning
capacity
o Huge domestic/regional/international markets

Weaknesses:
o Export of unprocessed cotton
o Low spinning and weaving capacity
o High cost of finance
o High infrastructure costs
o Weak linkages along the value chain
Opportunities:
o Great market potential
o Commercial cotton farming
o Exploration of the organic cotton niche

Threats:
o Unfavourable competition
o Counterfeit and second hand articles

Based on the analysis of the critical focus areas, the vision, objectives and
recommendations for reviving the textile sub-sector have been formulated as
below and the details are in the main body;

v
Vision:
„To create a strong and vibrant textile and clothing industry with
sustainable capacity utilisation and enhanced investment, through the
textile value chain‟

The specific objectives:

They are inter-linked and summarized into a three –step development
strategy; short, medium and long-term development objectives as follows:

(i) The first stage is the improvement period of 1 - 2 years, that will
include;
 To improve the capacity of production, marketing and competitiveness
of the existing textile enterprises;
 To reduce the cost of doing textile business in Uganda by
benchmarking against regional and international best practices, and
enhancing the up-gradation and modernization of equipment,
 To stabilize the home and regional markets by curbing undervaluation
and under declaration of imports as well as enhancing public sector
business support to the textile sector,
 To control the influx of second hand clothes and counterfeits which
shall result into attraction of more local and foreign direct
investments in the sector;

(ii) The second stage is the expansion period within 3-5 years that will:
 Focus at improving the quality and quantity of products from the
textile sub-sector by developing textile industrial parks that, attract
garmenting as well as developing a strong multi-fiber raw material
base for the sector given, the labour intensiveness of the activity and
therefore relevance to the economic emancipation of especially women
and the youth in Uganda.
 Target to increase the spinning and milling capacity from the present
20 Million meters per annum to 180 Million meters per annum in five
years.
 Make ICT an integral part of the entire value chain of textile
production and thereby facilitate the sector to achieve international
standards in terms of quality, design and marketing.
 Support the industry to withstand pressures of import penetration
and maintain a dominant presence in the domestic market.

vi
 (iii) The third stage is the period of steady and sound development
within 5 years and beyond that will:
 focus at increasing down stream linkages within the cotton and
textile sector especially on cottage industrial production
enhancement for ancillary products associated with cotton and
textiles like thread making, garment accessories, food oils
extraction, animal feeds making and so on
 Involve and ensure the active cooperation and partnership of local
Governments, financial institutions, entrepreneurs, farmers and
civil society in the fulfilment of these objectives.

Recommendations:

The proposed recommendations and measures have been reconciled with

the approved National Industrial Policy for Uganda. The priority focus areas
indicate possibilities to use support of existing horizontal policies and to
motivate entrepreneurs/ investors to be more active in the textile sub-
sector. These are particularly aimed at;
 Improvement of the Business Environment;
 Technological Up-gradation and modernization.
 Strengthening textile sub-sector support institutions
 Increase the raw materials supply base
 Enhance Human Resources Development
 Regional Strategy Development
 Strong Domestic Market Development.

In addition, solutions to boost the textile sub-sector that were identified in

the “Mbale Public Private Partnership Meeting of 6th August 2008” for the
revival of the textile sub-sector in Uganda have been included in the
Implementation Strategy.

The National Textile Policy shall be implemented on the basis of an effective

and efficient Public-Private Partnership model within a time frame of five
years. The Ministry of Tourism, Trade and Industry will lead the
implementation of National Textile Policy while collaborating with other
Ministries, agencies and private sector that have a direct role in its
implementation

vii
1.0 INTRODUCTION

After an extensive consultative process involving Ministries, Government

agencies, the academia and the Private Sector, the National Industrial Policy
was completed and approved by Government in 2008. This Policy that
complements the various National Policies and Strategies, whose major
priority is to enhance competitiveness of Uganda‟s products and services in
the domestic, regional and international markets, sets out the strategic
direction for industrial development in Uganda for the next ten years. One of
the proposed policy actions under the National Industrial Policy is to
develop action agendas for key industrial development sub-sectors, textiles
being one of them. The textile industry in Uganda has largely remained a
low technology labour intensive sector and this has made it attractive as a
first stage in industrialization hence the need for a National Textile Policy.

Textile manufacturing in Uganda is dependent on cotton lint fiber

processing by either the handful vertically integrated big textile millers or by
rudimentary processors that are engaged in hand loom weaving. In both
cases, the products are largely more coarse count textile and garment
products that can be easily produced by the prevailing technologies in the
sector as well as the medium staple cotton that is grown in Uganda.

Uganda Government considers the textile sub sector as one of the strategic
areas in the economic and social transformation of the country, owing to the
fact that the sub sector is supported by wholly locally grown raw materials
(cotton lint) that undergoes enormous transformation by processing, thereby
creating opportunities for Ugandans across the value chain; from the cotton
farmers to fabric/garment retailers.

In all her recent development programmes, like the “Prosperity for All”
Government of Uganda is stressing value addition on all locally available
raw materials. Owing to the significance of the textile sub sector in the
socio-economic transformation of Uganda and the fact that it is still
consuming a paltry less than 10% of Uganda‟s lint production, it is therefore
imperative to evolve a textile sub sector policy that shall facilitate the
necessary interventions. This policy is also critical to spur additional
investments into the sub sector with the view to enhancing cotton lint
processing in Uganda.

1
1.1 Textile Policy Vision
To create a strong and vibrant textile and clothing industry with sustainable
capacity utilisation and enhanced investment through the textile value
chain.

1.2 Mission Statement

To stimulate and support sustainable value addition through the textile
value chain with the ultimate objective of creating employment, enhancing
human resource skills and capabilities, product up-gradation and
diversification through Research and Development, increasing exports and
contributing to the economic growth and prosperity of the country.

1.3 The specific objectives for the National Textile Policy:

Given that the textile sub-sector in Uganda is still very weak and fragile, the
specific objectives of the textile policy are inter-linked and summarized into
a three –step development strategy; short, medium and long-term
development objectives that will enable the conversion of all lint produced in
Uganda into good quality yarn for the production of fabrics and creation of a
dynamic apparel manufacturing sector to transform fabric to clothing and
garment accessories of acceptable cost and quality for domestic, Regional
and international markets:

(i) The first stage is the improvement period of 1 - 2 years, that will
include;
 To improve the capacity of production, marketing and competitiveness
of the existing textile enterprises;
 To reduce the cost of doing textile business in Uganda by
benchmarking against Regional and International best practices, and
enhancing the up-gradation and modernization of equipment,
 To stabilize the home and regional markets by curbing undervaluation
and under declaration of imports as well as enhancing public sector
business support to the textile sector,
 To control the influx of second hand clothes and counterfeits which
shall result into attraction of more local and foreign direct
investments in the sector;

(ii) The second stage is the expansion period within 3-5 years that will:
 Focus at improving the quality and quantity of products from
the textile sub-sector by developing textile industrial parks that
attract garmenting as well as developing a strong multi-fiber
raw material base for the sector given the labour intensiveness

2
 of the activity and therefore relevance to the economic
emancipation of especially women and the youth in Uganda.
 Target to increase the spinning and milling capacity from the
present 20 Million meters per annum to 180 Million meters per
annum in five years.
 Make ICT an integral part of the entire value chain of textile
production and thereby facilitate the sector to achieve
international standards in terms of quality, design and
marketing.
 Support the industry to withstand pressures of import
penetration and maintain a dominant presence in the domestic
market.

(iii) The third stage is the period of steady and sound development
within 5 years and beyond that will:
 focus at increasing down stream linkages within the cotton and
textile sector especially on cottage industrial production
enhancement for ancillary products associated with cotton and
textiles like thread making, garment accessories, food oils
extraction, animal feeds making and so on and
 Involve and ensure the active cooperation and partnership of Local
Governments, Financial Institutions, entrepreneurs, farmers and
Civil Society in the fulfilment of these objectives.

3
 2.0 SITUATION ANALYSIS: - STRENGHTS, WEAKNESSES,
OPPORTUNITIES, AND THREATS (SWOT) ANALYSIS

The production of cotton in Uganda is characterized by small-holder

producers many of whom lack appropriate farming skills. In many cases,
farmer groups are not well organized and the organizational structures
themselves are weak while in most of the cases, there are no farmer groups
at all. This aspect constrains capacity building for farmers and their ability
to adopt new technology. Due to weak organization, farmers also have
limited influence on policy decisions.

Smallholder farmers also face a problem with low yields mainly due to poor
agronomic farm practices. The African average yield is 379 kg/ha which is
way below competing countries such as China with 1270 kg/ha, Israel with
1700 kg/ha and a world average of 589 kg/ha. Among the important factors
that contribute to low yields are poor quality planting seed, the absence of
price assurance mechanisms and the collapse of an effective credit input
system mainly due to the lack of collaterals by small-holder farmers. To
compound the situation, extension services for farmers in most of the
member countries are extremely weak.

An analysis of the cotton value chain reveals that key farm practices such
as thinning and stamping are usually overlooked by small-holder farmers. It
also suggests that there is limited use of fertilizers and agro-chemicals due
to their high cost. Agro-chemicals and farm labour dominate the overall cost
structure associated with cotton farming. Cotton Development Organization
(CDO) has taken up the up-hill task of addressing the distortions in the
Cotton Value Chain which is why this Policy shall focus at exclusively value
addition. The diagram 1 below reflects a typical cost structure of the cotton
chain.
Diagram 1: Cotton Value Chain Cost Drivers

Agro-
Labour
chemicals
22.9% 77.1%

Weeding
Land Planting Seeding Thinning
Preparati Stamping 15.7% Spraying Fertilizer Harvesting
on 6.1% 15.3% 0% 17.8%
0% 31.2% 0%
13.9%

100% Labour
Labour is inexpensive ($0.25/hr)
but, the quality of labour and
productivity continues to be low

4
The cotton – to – clothing sector or supply chain in Uganda and indeed the
other East African countries has not achieved its true potential. The supply
chain can be divided into four major sub-sectors for ease of analysis and
understanding the constraints to growth. The principal sub-sectors are
cotton growing – mainly by smallholder cotton farmers, ginning, spinning;
and textile, garment and apparel manufacture. The Diagram 2 below
presents the various components of the cotton – to – clothing supply chain.

Diagram 2: The Cotton – to – clothing supply chain

Weaving Fabric
Cotton Ginning processing/
Spinning
growing Cotton lint Finishing
Knitting

Garment
production
by tailors
or garment
Made-ups
factories

Garment
Wholesalers Wholesalers Retailers
Importers

Retailers
Consumers

Consumers

Whereas the sector in the region has considerable growth potential it must
essentially become competitive to perform on the world market. In this
regard, efforts will focus on enhancing industry performance and
competitiveness through improved farm productivity, ginning and
manufacturing efficiency. Similarly, efforts will be directed at enhancing the
sector‟s sustainability through institutional development and capacity
building of stakeholders. The governance structures for farmer organization,
processing and marketing; and the concomitant management systems will
also be strengthened.

5
If the textile industry does not grow, it will be a threat to the thousands of
small-scale farmers who rely on it and will result in the eminent death of the
industry itself. The AGOA facility offers preferential market access for
clothing and some textiles upon which Sub-Saharan countries can rebuild
their industries.

For now however, the industry is mono-product both in Uganda and East
Africa generally. Apart from making it susceptible to attacks from imports it
denies Uganda an opportunity to participate in the market for high value
products such as made-ups and clothing. As reflected in Diagram 3 below,
the value addition is highest in the made-up and clothing segments of the
textile market. The made up products are the fastest growing segment of the
world textile market.

Diagram 3: High Value Addition in the Textile Chain

Commodity Brands

Grey Printed Made-ups and

Clean Cotton

Raw Yarn Fabric dyed Clothing

cotton Fabric

Value Index

100 200 260 400 880

115

At present, whereas the sub sector is considered to be underperforming

relative to her full potential, she employs at least 2.5 Million Ugandans,
mostly women and youth, across the value chain with the potential to more
than double the number at full employment level.

The Ugandan textile sub sector was founded in the 1950s and 60s,
spearheaded by the Uganda Development Corporation (UDC) that worked
hand in hand with international partners like the Calico Printers of the
United Kingdom and YAMATO International as well as other Asian families
to establish mills across Uganda.

6
The other Textile Mills, other than the defunct Rayon Textiles in Kawempe
and the Uganda Garment Industries Limited (UGIL) that were established
under the above arrangement are located up-country, near sources of either
raw materials or energy. These included Nyanza Textile Industries Limited
(NYTIL) in Jinja, Mulco Textiles in Jinja, African Textile Mills (ATM) in Mbale
and Lira Spinning Mill in Lira.

Under the auspices of UDC as the vehicle for industrialization in Uganda, a

National Textile Board was established in the late 1960s to guide textile
industry activity in Uganda that focused at import substitution.

Following the Nationalization Policy in the early 1970s, the textile mills in
Uganda were nationalized like any other investments in Uganda, marking
the beginning of the sub sector‟s journey to total collapse by the early 1990s
when all mills had virtually closed. At its peak in 1972/3 the textile industry
consumed approximately 400,000 bales of cotton

By the divestiture of the government owned mills, machinery was obsolete

due to a long period of disrepair and mismanagement across the board
which is why the only two functional mills in Uganda, Phenix Logistics and
Southern Range Nyanza have had to invest in excess of United States
Dollars Thirty Million to modernize and up-grade equipment. Following the
investment, annual output aggregates to about 25 Million meters, which in
value terms translate into about 10% of the local market size of about 350
Billion Shillings per annum. Due to market distortions, the current
consumption of cotton lint is about 15,000 bales per annum against the
highest annual production of 250,000 bales per annum in the last five
years.

Production in the sector is still largely for the local and regional markets,
focused at production of suiting and uniform materials, corporate
promotional wear, bed sheets, curtains, Institutional and Armed Forces
Uniforms and a wide range of knits and smart coarse casuals. In addition,
one of the operational firms has managed to venture into international
market exports based on exportation of value added organic garments
niche. It is important to note that conventional cotton garment exports into
the international market have been impeded by the high cost of doing
business in terms of high transportation, energy and finance cost that result
into low competitiveness of garment exports from Uganda.

Additionally, absence of formal training in clothing and textile technology in

Uganda increases cost of labour as millers have to train labour force on job
which also reduces productivity. Rampant counterfeits, second hand
clothing and undervaluation/declaration of imports have continue to
undermine the sub sector‟s performance, constraining rapid expansion in

7
addition to perpetuating presence of idle capacity in form of facilities like
Lira Spinning Mill, African Textile Mill, Mulco and Rayon Textiles.

There are presently 2 functional mills and LAP Textiles that directly support
the livelihood of 3000 Ugandans whose aggregate annual income is in
excess of UGX 2.5Billion. These two mills consume about 15,000 bales per
annum with the capacity to consume over 50,000 bales on accomplishing
targeted investment plans in the next five years.

The operation of the Mills is powered by energy supplied from the national
grid and owing to the high cost of energy in Uganda, energy remain one of
the major costs of production, accounting for over 20% of the production
cost for the millers, aggregating to at least 3.5 billion annually.

The major bottleneck in the value chain is at spinning and weaving levels as
the existing mills can not process more than 10 percent of the cotton lint
currently being produced in Uganda. The value chain analysis indicates that
with added capacity at spinning, weaving and finishing stages, more
revenue can be generated and more jobs could be created internally in
Uganda beyond the present 2.5 Million across the value chain. Both GOU
and the private sector have plans and budgets to further improve
production and value addition in the chain and to make the sector more
competitive.

Uganda is a member of various trading regimes that include but unlimited

to the East African Customs Union, COMESA, EPAs, AGOA and others that
guarantee broad market access potential. At a more regional level, for
example, COMESA offers a market of 400 Million people that require at least
2.4 Billion meters of fabric per annum, at an average per capita
consumption of 6 meters only. On the other hand, under the AGOA
initiative as well as under EPAs, Uganda has duty and quota free access to
both United States of America and Europe. However, access to both markets
has been constrained by inability to have from within Sub Saharan Africa
the internationally acceptable fabric quality that can support local/sub
Saharan production of exportable garments. This therefore condemns the
entire region to third country fabrics from Asia that have failed to sustain
the Ugandan AGOA export efforts even when Government took deliberate
efforts to do so under Apparel Tri-star Limited.

Whereas the available global textiles and clothing markets offer credible
potential for the revival of the cotton and textile sub sector, it‟s imperative to
note that the global textile industry has undergone major changes.
Following the expiry of the Multi-Fiber Agreement (MFA), new challenges
have emerged particularly for African producers. Whereas competing
countries particularly from Asia and the Far East have seen their exports to

8
USA and Europe grow significantly, Africa has lost its market share. This
trend is expected to persist unless the industry in Africa becomes
competitive.

2.1 Strength

2.1.1 Conducive business environment and Good Political will

The free market economic reforms introduced in the 1990‟s have over the
years created macro economic stability in Uganda which has endeared the
country to global investors. In addition, partnership with the private sector,
as an engine of growth, is at the centre stage of Government policy
development, implementation and monitoring. The government economic
policy encourages value addition to agricultural commodities, such as
cotton, and employment generation towards poverty alleviation.
Furthermore, the political leadership in Uganda is unequivocally committed
to industrialization, economic transformation, and modernization.

2.1.2 Availability of idle capacity in the private sector

Uganda has only two functional vertically integrated textile mills and several
garmenting factories which are all operating below capacity. Mills like
Mulco, African Textile Mills, Rayon Textiles as well as Lira Spinning Mill are
closed even though their aggregate capacity triples the utilized/functional
capacity at full employment. These mills can be revived only with the
presence of an enabling policy regime for textile sector that guarantees
returns to investment. In addition, LAP Textiles Limited has taken over
former Apparel Tri-star Limited with the view to establishing a vertically
integrated mill, over and above her desire to purchase controlling stake in
Southern Range Nyanza Limited and Phenix Logistics Limited. These efforts
are still constrained by the absence of an acceptable policy environment to
justify the business move.

2.1.3 Presence of trainable labour force.

Following the introduction of the Universal Primary Education (UPE) and

Universal Secondary Education (USE), enrolment has increased to 7 Million
pupils in primary schools from 2.5 Million, with about half a million joining
secondary schools every year.

9
The above state of affairs offers an incredible opportunity for a robust
human resources base for trainable labour after a minimum of O-Level of
education, who can be trained on-job, for the entire sector to guarantee a
reliable base for human resources for present and future investors into the
sub sector.

2.1.4 Availability of abundant good quality cotton and adequate

ginning capacity.

Uganda‟s cotton is of medium to long staple lengths. In the last five years,
the highest annual cotton production registered was 254,000 bales (each
cotton bale weighs 185Kg) while during the same period, the highest annual
local value addition registered was 15,000 bales. This clearly represents the
great potential Uganda still has in the area of value addition on cotton since
far less than 10% of annual out-put is processed locally.
There is adequate ginning capacity, which has increased from 100,000 bales
to 1,000,000 bales in Uganda. More over, the Cotton Development
Organization is striving to re-discover the pre-1972 annual production levels
of over 500,000 bales per annum with anticipated production for 2008/9
estimated to be 300,000 bales.

2.1.5 Huge domestic/regional/International markets.

Uganda has a population of 30 million people, requiring 180 million

meters per annum at the average of 6 meters per capita. This translates into
a market of about Uganda Shillings 350 Billion per annum. At an East
African level, the Region has a population of 120 Million people which
translates into a market size of 820 Million meters per annum and in value
terms this translates into 1.4 Trillion shillings. At COMESA level, the
population is 400 Million people, at a per capita annual consumption of 6
meters, this result into a market size of over 4 Trillion Shillings. This
market size is quite significant to justify promising investment in Uganda; in
addition to the European Union and AGOA market potential; both of which
offer quota and duty free market access.

10
2.2 Weaknesses.
2.2.1 Export of unprocessed cotton.

More than 90 percent of Uganda‟s lint is exported by the about 20 cotton

lint exporters and or cotton ginners. Although most of Uganda‟s cotton lint
is sold at a premium on the world cotton market, the value is far much
lower that what the country would have earned had there been sufficient
value addition. Whereas 1kg of exported cotton fetches approximately US $
1, the two made-up garments, like shirts made from the same quantity of
cotton lint can fetch at least US $8. This is in addition to the other merits
associated with local cotton processing like creation of employment. This
therefore means that, whereas Uganda earned United States Dollars
46,990,000 when she produced highest in the last five years some 254,000
bales of cotton, the same level of cotton production had the capacity to
generate United States Dollars 375,920,000! The Table 1 below
summarizes the challenges of value loss that Uganda continue to suffer
from the export of unprocessed or semi processed cotton products.

Table 1
Sr.No Level of Transformation Returns in US$ per Kilogram
1 Lint >2
2 Yarn 3
3 Fabric 5
4 Garment 8-10

Source: TEMAU presentation during the 30th April 2008 Cotton and Textile
Sector Stakeholders meeting held at Hotel Africana, Kampala, Uganda.

2.2.2 Low spinning and weaving capacity.

Technology is another key area of concern which needs upgrading to

enhance the competitiveness of the over all textile industry. The present
combined annual production for the two functional mills plus the
production made by the informal sector that comprises of small scale hand
loom and cottage operators is still averaged at a paltry 25 Million meters
capacity. This underpins the very low spinning and weaving capacity despite
the presence of an abundant raw material base. The situation is further
worsened by the high investment cost required to establish meaningful
spinning or weaving units that stand at an international average of at least
United States Dollars 10 Million which create a major entry barrier into a
sector already requiring major investment in capacity expansion and
modernization of equipment.

11
2.2.3 High cost of finance.

While bank borrowing and share listing on the stock exchange market are
globally acceptable as the main source of investment capital, both sources
are not within the reach of the textile sector/investor in Uganda. Whereas
there are several international banks operating in Uganda, interest rates
remain very high and range between 18-24%. On the other hand, the only
Government owned development bank available- Uganda Development Bank
(UDB), her level of capitalization cannot even revamp a single mill! To
worsen the story on financing, no single textile mill has so far listed on
Kampala Stock Market as the performance of the two millers is still average
to be attractive for public investors as opposed to the other listed
companies. The resultant effect has been the perennial lack of
modernization and or development finance for the sector as opposed to the
competition in Ethiopia or Asia that enjoy development finance at 7% per
annum interest and less than 5% respectively in local currency courtesy of
Government intervention to deliberately develop and transform the sector.
There is need to replace the old mills, upgrade production and process
technologies and introduce computer aided design facilities.

2.2.4 High energy costs.

2.1 The energy cost has increased to an all time high in Uganda in the
last three years and currently, Ugandan energy rates are the highest in the
region, accounting to at least 15-20% of the overall production cost.
Besides, reliability of electricity service is as important as its cost. The loss
in production time and output from outages, the loss of equipment from
power surges and the efficiency loss caused by interruption and uncertainty
constitute severe competitive disadvantages. Interruptions in supply are
particular disruptive to dyeing and washing operations. In many parts of
Uganda where interruptions in supply are common, firms often rely on
back-up generators. The need for these generators adds to energy costs.

12
 Diagram 5: Textile Value Chain Cost Drivers

Need to bring power pricing

structure within range of
competing countries

Material Labour Electricity Maintenance Overhead

31% 20% 35% 35% 6%

Lint Cotton Combing Twisting Weaving Dyeing

Lint
20.6%Cotton Combing
25.0% Twisting
10.1% Weaving
16.6% Dyeing
25.0%
20.6% 25.0% 10.1% 16.6% 25.0%

Labour Electricity Maintenance Overhead Profits

17% 24% 7% 29% 23%

Depreciation Admin Financing Other

26.3% 21.1% 47.4% 5.3%

High Cost of Financing

Interest Rates: Approximately 18%

Collateral Requirement: About 180%

Source: Global Development Solutions, LLCTM

13
2.2.5 High Transport costs

The land locked nature for Uganda pose significant challenges on the cost of
doing business in especially the textile sector that is increasingly under
global stress following the end of the Multi Fiber Agreement on Textile and
Clothing (MFA) in 2005 that marked the end of the quarters. The situation
is further aggravated by the poor state of the roads and railway, cost of
trucks and fuel cost that explain the very high internal and external
transport costs relative the other regions which impact on price paid to the
farmers.

2.2.6 Weak linkages along the value chain

2.2.6.1 There is very little to no cooperation among the various stakeholders

within the value chain. This undermines business collaboration that is
necessary for the growth of the sub sector as there is no information sharing
for market access yet this is critical for success since this can enhance intra
industry linkages.

2.2.6.2 Supporting services like international sourcing and buying houses

are still missing while specialized services in fashion and designing
are inadequate and therefore require expansion and integration
within the value chain to grow national capacity in these fields.
2.2.6.3 Human resource skills: Even though the government has
emphasized UPE and USE, beyond this there is a need to
emphasize vocational training in the area of textile and clothing
technology. Currently, there is no proper training in textile and
clothing technology.

2.3 Opportunities.

2.3.1 Great market potential

The East African Community is evolving into a Common Market by 2010

while COMESA is also expected to have a Customs Union by the same date,
India, Canada, Japan have also opened up for additional market access in
addition to AGOA and EU. Most critical, is the fact that export potential at
present is based on third country fabrics from China which can sustain
investment in garmenting in the immediate and near future in addition to
the same situation warranting investment in vertical integration since this
third country sourcing shall stop in 2015..

14
2.3.2 Commercial cotton farming

Government is committed to producing 1 Million bales of cotton by 2015.

This means that the successful Ethiopian Model of cotton production being
controlled by commercial farmers up to 50% of annual output can be
realized given that returns to investment in cotton farming warrant massive
production. This approach would resolve the challenges of extension
services presently expected from Government since the commercial farms
shall constitute centres of excellence.

2.3.3 Exploration of the organic cotton niche.

The world organic lint demand is currently 32,326 metric tons expected to
grow at the rate of 50% per annum. A third of the global output is produced
in East Africa. In value terms, organic cotton fetches up to 40% above
conventional cotton prices while yarns and fabric derived from organic
cotton fetches up to ten times. Therefore, it is opportune for the sector to
attract investment in vertical integration to add onto local value addition
being done by only one firm at the present.

2.4 Threats

With the coming into force of the World Trade Organization (WTO), the
General Agreement on Tariff and Trade (GATT) was adopted and its customs
valuation system based on invoice declaration. This gave an opportunity to
unscrupulous business people to under invoice from time to time, which
coupled with export incentives in much of Asia work to make imports
artificially competitive.

2.4.1 Unfavourable Competition

Following the end of the Multi Fiber Agreement (MFA) in January 2005 and
the coming into force of the Customs Union on 1st January 2005, the textile
industry is under threat. The MFA had initially encouraged Chinese and
Asian companies to set up facilities in Africa but, many such firms have
relocated back to their countries of origin where labour, overall production,
transportation and handling costs are lower and productivity is higher than
in Africa in addition to them enjoying export incentives of up to 8% in some
instances. The cumulative effect of both developments has exposed the
local textile sector to untold competition, since leading textile manufacturers
like China and India have taken over the textile business

15
2.4.2 Counterfeit and Second Hand articles.

2.4.2.1 Counterfeits

All major local brands have had their brands copied by unscrupulous
business people. Unfortunately, the present legal framework is not strong
enough to prevent the practice from spreading resulting into huge losses to
investors in the textile sector. Therefore, it is critical to have the present
Counterfeit Bill passed into law at the earliest opportunity.

2.4.2.2 Second hand articles

Under the East African Community the Common External Tariff on second
hand clothing is USD 30 per Kilogram or 45% which ever is higher.
Whereas this would look prohibitive, there is need to have a five years
phase-out strategy for the importation of second hand articles so that by
2015, there is no more importation of second hand clothes into the East
African Community. This approach is what has transformed and developed
the Ethiopian textile and clothing sector that hitherto faced problems akin
to what Uganda presently face.

3.0 GUIDING PRINCIPLES

(i) Continued commitment to stable supply of raw materials.

(ii) Creating capacity for financing textile sector transformation
through value addition on lint.
(iii) Promotion of supporting institutions and related industries of
textile sub-sector, like training institutions, garments
manufacturing through public private partnership model.
(iv) Creating national capacity to source exportable quality fabrics to
sustain profitable exports to existing and future market
opportunities.
(v) Create an attractive market environment through the control of
smuggling, under declaration, proliferation of counterfeits which
allows mills to offset rising costs with higher capacity utilisation.
(vi) Fast tracking the development of critical infrastructure to address
the cost of doing business to enable Regional/International
Competitiveness: Railway and Energy.
(vii) Emphasize environmental protection for sustainable development,
especially upon Uganda‟s breaking through into the niche organic
market export.

16
4.0 POLICY MEASURES FOR THE REVIVAL OF THE TEXTILE
SUB-SECTOR

There is need for backward integration within Uganda supported by a

package of intervention. Value-addition is a pre-requisite for Uganda to
sustain her position in the global textile arena and industrialization in
general. In the textile sector, value-addition can be achieved via two pronged
approach; firstly by improving the product mix, e.g. spinning both low
counts yarns and finer cotton yarns, and secondly by moving into exports of
high value items e.g. garments and made-ups. The following strategies and
measures will be undertaken by the Government to enhance the
development and revival of the textile sub-sector:

4.1 To improve the local Business Environment.

The Textile sub-sector has a vast market and it is labour intensive rather
than technology intensive which means that it provides more employment
opportunities. On one hand, the sector has a wide range of forward and
backward linkages. It is therefore a key sector to industrialization as well as
exploitation of local resources to promote exports.

The Government shall establish a conducive and competitive fiscal regime

that is necessary for the optimal growth of the textile sub sector in Uganda.

4.2 To support Technological Up-gradation and

modernization.

Despite the presence of an abundant raw material base and the

considerable efforts made to increase the production to the pre-1972 levels;
the spinning and weaving capacity of the sector is still very low. The policy
will:

 Continue the efforts to modernise and up-grade technology to

international levels by supporting investments in vertical
integration.

 Facilitate harmonious development of cluster- based production

facilities focused at optimizing production and adopting
appropriate technology to meet the Regional and International
demand for high value and large volume products.

17
  Promote Uganda as an attractive investment destination and
shall establish economic zones necessary for the attraction of
foreign direct investment in the sub sector.

4.3 To strengthen textile sub-sector support institutions

Across the globe, countries that are having strong textile sub sectors have
transformed largely because of the excellent support functions that the
support organizations related to textiles have performed. Therefore, for
Uganda to enhance the performance of the textile sector, Government shall:

i. Strengthen Textile Development Agency (TEXDA), a textile training

agency currently funded by UNIDO under Ministry of Tourism, Trade
and Industry to work in partnership with Textile Manufacturers
Association of Uganda (TEMAU) to offer support services to the sub
sector in the areas of training in various textile and garments programs
such as surface design, basic dyeing and printing; handloom weaving;
business management; branding, merchandizing and others.

TEXDA was established in 1999 as UNIDO project with a view to

enhance the competitiveness of the textile sector at both local and
international markets. Government procured land in Bukoto-Kampala
for this establishment. Today this center has in stock various types of
equipment utilized during trainings in weaving, surface design and
garment making. In addition, it provides advisory services to
entrepreneurs, access to state of art equipment, raw materials
production and research facilities.

Once the training institute is constructed, it can also be responsible for

integrating micro and small entrepreneurs, designers and tailors into the
national value chain especially then that the Private Sector Foundation
and Government have already formed clusters for the SMEs on one hand
and on the other; the medium and large millers are in principle agreeable
to integrate the SMEs with the view to completing a national value chain.

ii. The government will continuously improve funding for lead agencies for
the textile sub sector development like Uganda Export Promotion Board
UEPB, Uganda National Bureau of Standards UNBS, Cotton
Development Organization CDO, Uganda Revenue Authority URA and
others with the view to enabling them adequately perform their
mandate.

18
iii. Government shall strengthen the Department of Industry and
Technology to oversee the development of the Textile and Garment
Sector in Uganda.

4.4 To increase the raw materials supply base

i. Following the surging market potential for textiles and apparel, now
valued at over 1 Trillion Dollars per annum, leading producers of textile
is Asia and South America are competing for the decreasing cotton lint.
It is therefore strategic for Uganda to pursue the vision for producing
more cotton to realize the pre 1972 production capacities. This would
ensure a sustainable supply of cotton lint for the present and future
millers

To ensure sustainability of cotton production, Government shall

encourage private sector commercial cotton farming as a means of
mitigating the dangers associated with the dependency on peasant
growers of cotton based on rain fed agronomical practices.

ii. Silk is another fiber produced in a few districts in the country mainly in
the western and central parts of the country. If the silk sector is
developed, there is potential to spur village level processing especially
the cottage industry which would offer income opportunities for women
and youth.

Government shall support the silk and other fiber production and
processing in Uganda.

4.5 To enhance Human Resources Development

The most crucial factor in value addition is the development of human

resource capacity. Currently the operating mills in the country have local
workers who have no formal or have little education in textile processing.
They have developed their skills over the years through on-job training.
Most of these skilled local workers are not aware of the latest developments
in their field where as in the leading textiles producing countries the skills
such as fabric processing and finishing, weaving and spinning are
transferred through training on state of the art equipment and modern
facilities.

19
This requires restructuring of the existing textile mills (i.e. balancing,
modernization and rehabilitation which is a regular requirement of any
industry) so as to enable the processing, finishing, weaving and spinning
segment to not only cater to the needs of the local apparel industry but also
increase the share of processed fabric and garments available for regional
and international exports.

In this regard, the existing training facilities would have to go through a

revamping process by updating their syllabi, bringing it in line with the
current and future industry requirements.

The Government therefore shall:

(i) Strengthen the existing institutions offering textile science and

technology courses such as Busitema and Kyambogo Universities,
vocational training centers to conduct courses in textile
technology, fashion and textile design.

(ii) Support the strategic idea of COMESA owning a Regional Training

Center for Textile Technologists. This will enable Ugandans train at
a world class institution which will, in the medium term, answer
the persistent shortage of world- class technical manpower.
(iii) Facilitate specialized training of public servants handling matters
related to the textile sub sector for effective management,
implementation and monitoring the development of textile sub –
sector.

4.6 To support a Regional cotton-textile sub sector

development Strategy.

Government shall

 Continue to negotiate and promote Uganda‟s membership to key

trading blocs based on the principle of mutual benefit with the
trading partners;
 Collaborate with other Regional Programs like PACT and Regional
Industrial Upgrading and Modernisation Programme, (RIUMP) of
COMESA in the development of the textile sector;
 Support the development of a Regional Strategy in the
development of the textile sector like one being developed by
COMESA.

20
  Support strategic alliances with textile majors at a Regional and
International level with focus on business and new markets
development;

4.7 To Strengthen Domestic Market Development.

In all countries that have transformed the textile sector, the stepping stone
for the transformation has been increasing local consumption of textiles
especially by the organized public sector. Government shall provide
affirmative action to local suppliers under Government procurement, while
ensuring conformity with existing National Laws focusing at:

(i) Supporting the “Buy Local and Build Uganda” strategy. In this, all Public
Sector procurement for all types of textiles shall be sourced from Uganda
save for where no local capacity to produce exists

(ii) Supporting the introduction of School Uniforms as a requirement for

Universal Primary and Secondary Education (UPE& USE).

(iii) Supporting the amendment to the Public Procurement and Disposal of

Public Assets Act (PPDA Act) to establish a mandatory requirement for all
Government Institutions to source textiles requirements locally save for
where no local capacity exits.

5.0 IMPLEMENTATION, MONITORING AND REVIEW

MECHANISM

The Ministry of Tourism, Trade and Industry will lead the implementation of
National Textile Policy while collaborating with other Ministries, agencies
and private sector organizations that have a direct role in its
implementation. These will include; Ministries of Finance, Planning and
Economic Development, Agriculture, Animal Industries and Fisheries,
Education and Sports, Energy and Mineral Development, Gender, Labour
and Social Development, Lands, Housing and Urban Development, Water
and Environment, Local Government and Foreign Affairs; as well as other
Government Agencies and the Private sector.

The Department of Industry and Technology will be strengthened to serve

and facilitate the developmental needs of the sector and will continuously
monitor the implementation of the National Textile Policy.

21
6.0 CONCLUSION

Under the National Industrial Policy, the principle focus for industrial
growth in Uganda includes the growth and development of the textiles and
garments sub sector. Although there are several challenges to the optimal
growth of the sub sector, the prospects for the sub sector‟s development are
good. This can be achieved through the comprehensive implementation of
missing policy gaps that presently inhibit optimal development of the sub
sector that include:

 Improvement of the Business Environment;

 Technological Up-gradation and modernization.
 Strengthening textile sub-sector support institutions
 Increase the raw materials supply base
 Enhance Human Resources Development
 Regional Strategy Development
 Strong Domestic Market Development.

The Government is committed to providing a conducive environment to

enable the Uganda Textile Industry realise its full potential based on a
Public-Private Partnership arrangements. In fulfilment of these objectives
the Government will enlist the cooperation and involvement of all
stakeholders to ensure an effective and responsive delivery system.

22
 ANNEX: IMPLEMENTATION STRATEGY

Strategic Output Main activities to achieve the Support Time Costs

Objective(s) outputs Institutions Frame
To improve the A conducive and To amend the Income Tax and Value MFPED, FY
local Business competitive fiscal Added Tax Acts to enable new vertically MTTI 2009/10
Environment. regime that is integrated textile mills investing US$
necessary for the 25 Million in plant and machinery,
optimal growth of using local cotton as the key raw
the textile sub material and the existing operational
sector in Uganda mills to be accorded the following
created. incentives:
 10 years Corporation Tax Holiday.
 5 years Value Added Tax exemption
on all in-puts/raw materials (dyes
and chemical, artificial yarn fibres
used for blending, utilities, garment
accessories) spare parts and sales of
textiles span, weaved and wet
processed in Uganda.
To mainstream and provide annualized MFPED FY US$5Milli
technology up-gradation funds for the 2009/10 on.
textile sub-sector in the sums of US$ 5
Million that should be availed to
commercial banks/Uganda
Development Bank for on-ward lending
to vertically integrated textile mills
doing cotton value addition at a
maximum 10% interest rate per
annum in Uganda Shillings to enable
further mills rehabilitation and value

23
addition Provided That financing
eligibility shall be subject to
independent viability evaluation by the
bank in issue and the project
promoters shall at times be required to
prove 50% contribution to access up to
a maximum of USD 3Million
development finance.
To pay for electricity charges beyond MFPED 2009/2010 UGX
US$ 5 Cents per KWH for vertically 2.4Bn.
integrated textile mills for a period of
three years or until the Bujagali Dam
power is available on the national grid(
whichever fall fast).
To establish a revolving Cotton Buffer MFPED FY US$3
Stock Fund of US$ 3Million per 2009/10 Million
annum managed by Uganda
Development Bank/intermediating
commercial banks that shall avail to
millers cotton finance at 1-3% interest
per annum to enable textile millers buy
cotton lint without blocking business
working capital throughout the year.
The cotton financing shall be managed
under a Collateral Management Regime
by a reputable international firm to
ensure accountability and
sustainability.

24
To strengthen To transform the Textile Development MTTI, FY UGX. 1.5
textile sub- Agency (TEXDA) into a fully fledged MFPED 2009/10 Billion.
sector support Garmenting, Fashion and Design
institutions Vocational Training Institute based on
a Public Private Partnership Model
working with Textile Manufacturers
Association of Uganda (TEMAU) as the
lead private sector Agency with the
view to training at least 100
technicians (87% of the SME
Garmenting Operators are women) per
annum to bridge the skill gap prevalent
in the sub sector at present.

To link TEXDA to training MTTI, MES FY

arrangements that are available to 2009/10
Uganda on a bilateral or multilateral
basis with the view to encouraging
skills development in the country.

To build capacity for the public sector MTTI, FY

officials to understand the salient MFPED, & 2009/10
characteristics of the cotton-textile MES
sector in terms of technical, fiscal
policy, environment and international
trade aspects.

To improve funding for the lead MTTI, FY2009/10

agencies for the textile sub sector MFPED &
development. Such lead agencies MES.
include UNBS, UEPB, UIRI,
Department of Textile Technology,
Faculty of Science, Kyambogo and

25
 Busitema Universities.

To strengthen the Department of MTTI, &

Industry and Technology to serve and MFPED.
facilitate the developmental needs of
the Textile and Garment Sector in
Uganda

To increase the Sufficient raw To support private sector commercial MFPED & FY2009/10
raw materials materials for the cotton farming. MAAIF
supply base mills supplied.
To support the silk and other fiber MAAIF
production and processing

To support new technologies in the MTTI,

area of fiber research and development MAAIF, UIRI,
as the case is for the banana fiber MES
textiles

To enhance Productivity To strengthen the existing institutions MTTI, FY2009/10

Human upgrading and offering textile science and technology MFPED, .
Resources skills courses such as Busitema and MES
Development development Kyambogo Universities, TEXDA
enhanced training Institute to conduct courses in
textile technology, fashion, textile
design and international marketing
and merchandising.

MFPED, FY2009/10
To support and fast track the strategic MTTI .
idea of COMESA establishing and
owning a World Class Regional

26
 Training Center for Textile
Technologists with the support of the
University of North Carolina at
Busitema University.

To facilitate specialized training in MFPED,

textile technology of staff in the MTTI,
Department of Industry and
Technology, MTTI for effective
management, implementation and
monitoring the development of textile
sub –sector

To support a A vibrant To continue negotiating and promoting MFPED, On-going

Regional Cotton competitive and Uganda‟s membership to key trading MTTI,
– Textile Sub- sustainable blocs based on the principle of mutual
sector cotton-textile sub benefit with the trading partners.
Development sector evolved.
Strategy
To promote Uganda as an attractive MFPED, On going
investment destination and establish MTTI
economic zones necessary for the
attraction of foreign direct investment
in the sub sector and cluster based
enterprises.
To lobby other Partner States within MTTI, On-going
the EAC/COMESA for the creation of a MFPED
regional approach to the development
of the textile sector through the review
of the present Common External Tariff
Structure “sensitive” categorization of
textile imports into EAC so that a

27
 minimum dutiable value of US$ 5
Dollars per Kilo of textile imported into
EAC is established on which a 70%
Import Duty should be charged to
mitigate the excesses of gross under
valuation of imports from especially
Asia that distort global textile trade,
which, coupled with export incentives
given to exporters in Asia undermine
competitiveness of Sub Saharan textile
manufacturers.
To Strengthen Increased market MFPED & 2009/2010
Domestic share for the To amend the Public Procurement MTTI,MFPED
Market locally and Disposal of Public Assets Act
Development. manufactured with the view to supporting the
textiles. “Buy Uganda-Build Uganda” sourcing
strategy.

Pressures of To support the introduction and MFPED, F/Y

import mainstreaming of School Uniforms MTTI & MES 2009/10
penetration and a provision to all children attending
dominant Universal Primary and Secondary
presence in the Education (UPE& USE) in Uganda.
domestic market
contained and
maintained
respectively.
To create the necessary awareness MTTI
and supportive measures for the
sustainability of local sourcing of
textiles and garments by the public
and private sector to enhance
efficiency, productivity and quality,

28
 environment and Human Resource
Development.

To establish a Comprehensive National MFPED, 2009/2010

School Uniforms Decentralized MTTI, MES
Garmenting Program necessary for
kick-starting nation-wide garmenting
activity across the country for rural
transformation.
(i) Under this program, the Textile
Manufacturers Association of
Uganda shall assist local
business communities across
Uganda create 20 Model
Factories of at least 50 machines
each with the capacity to stitch
uniforms for the entire country
in five years of this Policy
implementation.(Industrial
Zoning and Clustering program
implementation)

To fast track enactment of key MFPED, 2009/2010

commercial laws: Counterfeits, UNBS, MTTI
Competition, Intellectual Property
Rights and others to address the
present distortions resulting from
obsolete legislation.

29