The Executive Director, Uganda Free Zones Authority (UFZA), Hez Kimoomi Alinda, has assured Parliament the merger of the Authority with Uganda Exports Promotions Board, will have minimal impact on the jobs of all the competent staff currently employed at the Authority.
Kimoomi made the remarks while appearing before Parliament’s Committee of Commissions, Statutory Authorities and State Enterprises (COSASE), where he had led in team to respond to queries raised in the December 2023 Auditor General’s report, and in his opening remarks, he commented on impact the latest status would have on the Authority’s mandate.
“I have no doubt in mind that all the skilled competent staff will retain their work under this new entity that will be created. It would mean that the two budgets get together,” said Kimoomi.
It should be recalled that in April 2024, Parliament approved the proposal by Government to merge the Uganda Export Promotions Board with the Uganda Free Zones Authority, forming a new entity now called the Uganda Free Zones and Export Promotions Authority, that will be housed under the Ministry of Trade.
David Bahati, Minister of State for Industries defended the merger arguing that it would enable Government to meet its target of increasing its exports, while Parliament’s Trade Committee recommended for the merger arguing that it would be critical at facilitating effective and efficient service delivery by clearly delineating the functions and mandates of the two agencies, thereby avoiding duplication of mandates which is one of the objectives of the merger.
During the interface in COSASE, Kimoomi explained that the Uganda Free Zones Authority is mandated to establish, develop, manage, market, control and supervise free zones in Uganda and these were created as an initiative by the East African Authority to win the region from the colonial curse of exporting raw materials, and manufacturers operating in these economic zones are exempted from all import duty and taxes for purpose of lowering the cost of production and adding value to the products to enable these products attract more value on the market.
He explained, “This exemption isn’t loss of tax rather it is a modality of creating tax harvest and creating employment. All inputs into free zones are zero rates for VAT. Unless if we externalize our economy, be very deliberate and intentional on manufacturing, and value addition in these regulated environment that will attract global patient capital we will still be here talking about the same things, ten years later. We still have opportunities, the country is still virgin for investment, we still have land which we can acquire.”
Medard Sseggona (Busiro East) questioned the Management of Uganda Free Zones Authority on the dismal performance on revenue collections noting, “You had budgeted to collect Shs420M and only managed to collect only Shs160Mn which is only 38%. What explanation do you have for such a miserable performance?”
Kimoomi attributed the poor performance on delays to complete the Entebbe International economic zone, whose completion they had predicted would raise revenue for the Authority.
“At the time we projected to collect Shs420M we had expected that part of the Entebbe International Airport would be completed so that we can collect more NTR in terms of licenses and also rental space. We have been developing this facility since 2020, seven production units with a trade house. Each of these production units has 780 square meters,” explained Kimoomi.
