“For Uganda to attract genuine investors, it must maintain robust regulatory regimes that ensure quality and brand protection, which is the primary role of the PPDA.”

– Matsiko Ben Kahunga

In his article published in The Observer and David Monitor recently, David Bwambale raises a very pertinent issue about the ‘decree’ from the Public Procurement and Disposal of Public Assets Authority (PPDA) that nullifies the requirement for authorised distributors in respect to vehicle supplies into the country.

This is Circular No 7 of 2023. And his focus on the motor industry is very instructive, in the context of Uganda. If this is let to run, it means Uganda will be considered a no-man’s jungle by motor vehicle manufacturers, thus the country will be flooded by all manner of things, including as Mr Bwambale rightly argues, used vehicles debadged and rebranded and imported here as new. No reputable brand owner will want to play in such a market.

This has far -reaching implications both at the macro-level for the economy and at the meso level for the motor vehicle sector.  At the meso level, besides the issue of cost, quality and aftersales service which a freelance importer of new vehicles will not provide, there is the key element of tropicalisation. In motor vehicle industry jargon, this refers to elements of engineering and mechanics that make a vehicle suitable for the conditions in the tropics, including the terrain and roads. 

Let us take a ten-tonne cargo truck. One engineered for the tropics will have a water-cooled engine, with a heavy-duty radiator to withstand the high temperatures and other elements of tropical markets. It will have a high ground clearance to be able to navigate the bumpy pot-holes of our roads: both country and urban; heavy duty rigid-frame chassis; heavy-duty suspension (springs and shock-absorbers); a naturally-aspirated engine for places like Uganda which need no turbo-charged engines, thanks to sufficient air supply by virtue of proximity to the Equator.

Even in such high terrain places as Kapchorwa or Kisoro. Its cabin will have laminated tempered glass; cabin seats will have fabric material as opposed to synthetic leather; wide, 240-degree sun visors and other such basics, all tailored to the conditions of the tropics, including sun-resistant paint for the cabin and the body.

Even such engineering variables as engine torque, gradability do count. Gradability is the steepest inclination a truck will climb when fully-loaded to the recommended pay-load. These and other features are only possible when a manufacturer has an authorised distributor in a given market. It is only the authorised distributor who will do vehicle tests on the key variables in a structured manner, picking data to feed into the engineering, research and development aspects at the manufacturer’s plant. It is usually technical specifications and manufacturer’s authorisation and aftersales product support that score high in bid evaluation for motor vehicles. Price plays a secondary role.

At the macro-level, this threatens the development of local content and eventually manufacturing. Local content refers to the components of this truck that can be sourced or manufactured locally. A Kenya-assembled truck for example, will have the engine, transmission, chassis, electrical system, imported from Japan, as the key components. The rest of the components are sourced from local developers.

This is only possible in a situation where the brand owners and manufacturers have an authorised distributor in the country, whose engineers work closely with the engineers of the franchisor developing local content. Local skills, jobs and expertise are grown this way. Technology transfer happens this way.

Eventually, franchise manufacturing follows. Economies grow this way. Beyond the sector itself, this Circular will have the unintended effect of sending out the wrong signal about our Ugandan exports in other sectors. If this market is open to all and sundry, and cares less about quality and brand protection, what will make them care about the quality and sanctity of their own exports? It is a free fall for all, be it imports or exports. Very dangerous situation, PPDA. Reason this Circular must be retracted. It is in our national interest.

We cannot project an image of a care-free market and expect investors worth their dollar to take Uganda serious. True investors value and respect jurisdictions with functioning regulatory regimes. And this is the raison d’etre of PPDA.

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