Bank of Uganda Governor Prof. Emmanuel Tumusiime-Mutebile has urged government to stop promoting the Buy Uganda Build Uganda (BUBU) policy which was launched in March this year, aimed at promoting Uganda’s locally produced goods and making them competitive on both domestic and foreign markets.
The BUBU policy was a presidential directive and was launched by Prime Minister Dr. Ruhakana Rugunda with the aim to develop a vibrant and dynamic private sector that transforms local products in order to meet the required standards.
However, Prof. Tumusiime-Mutebile said that Uganda risks jeopardizing its success in exporting to regional markets through similar protectionist trade policies.
The Governor’s remarks Tuesday were contained in a speech read for him by David Ssajjabi, the Deputy Director in charge of Economic Research at BOU. This was at the ongoing 12th Private Sector Foundation Uganda Trade Facilitation Expo 2017 at UMA exhibition hall.
At the launch of the BUBU policy, Trade Minister Amelia Kyambadde said it would boost Uganda’s economic growth, create jobs and also produce local entrepreneurs.
Tumusiime-Mutebile added that if BUBU policy is implemented to offer domestic products preferential treatment on the domestic market over the East African community (EAC) partners it would be inconsistent with the East African Community customs union protocol which promotes trade across borders of the partner states.
The EAC Customs Union Protocol prohibits partner states from undertaking any administrative measures which discriminate in favor of its own producers at the expense of those of its partners.
“BUBU offers trade protection through administrative measures rather than through tariffs hence being inconsistent with the EAC Customs Union Protocol,” Tumusiime-Mutebile said in his speech.
He pointed out that the BUBU campaign is not compatible with an export promotion strategy but promotes import substitutes.
“We therefore need to focus on the potential and fast repercussions of the proposal on Uganda’s exports because if implemented it could invite retaliation from other partner states in the EAC putting at risk our access to the regional market,”he added.
However, the Executive Director Private Sector Foundation Uganda Gideon Badagawa said that the BUBU campaign will go on given that some of the EAC bloc members have the same running, such as Kenya and Rwanda.
Despite Tumusiime-Mutebile’s concern, other regional analysts are calling for the Buy East Africa Build East Africa Policy, which should encourage the region’s people to consume products produced locally by member states.