Trade Ministry Develops Eco-Friendly Guidelines for Industrial Parks, Free Zones

The Ministry of Trade, Industry, and Cooperatives has developed guidelines for the development of Uganda’s industrial parks and free zones to rectify past mistakes and promote sustainable development.

Over the years, several industrial and business parks have suffered from poor design and planning, with some even being established in eco-sensitive areas. These parks often lacked essential amenities, leading to inefficiencies and environmental degradation.

Francis Mwebesa, the Minister of Trade, emphasized the essential role of the new guidelines in guaranteeing the quality and functionality of Industrial Parks and Free Zones. He underlined that these guidelines are not only rooted in international best practices but are also tailored to meet Uganda’s specific needs and aspirations.

“The new guidelines emphasize sustainability and eco-friendly practices,” Mwebesa said. “They aim to ensure that future industrial parks are not only well-planned and equipped with necessary infrastructure but also contribute positively to the environment. This initiative represents a significant step forward in fostering economic growth while safeguarding ecological integrity.”

Mwebesa made the remarks while launching the guidelines in Kampala.  He added that the new guidelines for development also provide for special economic zones, export processing zones, free trade areas, and other models for industrial business activities.

The released guidelines elaborate on several key issues, including planning, eligibility criteria, site selection, and feasibility studies. They also cover land management aspects such as land acquisition, infrastructure planning, zoning, plot arrangements, and the governance of natural resources.

The guidelines further outline the responsibilities of each stakeholder, including developers, regulators, and both local and central government bodies, at every stage of industrial park development. They emphasize that industrial parks should be versatile in their use, but must include at least a manufacturing/processing or tourism/hospitality component to enhance economic diversity and regional development.

“…No encroachment on protected or similar areas and also look at upward integration between the zone/ parks and the local economies,” the guideline emphasizes. “When designing an industrial park program, the government should set realist expectations and conduct thorough analysis…the analysis should include various scenarios including those looking at various green growth potential on and environmental impacts based on an extended cost-benefit analysis…” it adds.

Hez Kimoomi Alinda, the Executive Director of the Uganda Free Zones Authority, highlighted that environmental, social, and governance factors are increasingly driving the agenda for industrial parks and free zone development. Alinda said there is a growing realization that global patient capital is increasingly focused on fueling sustainable growth initiatives.

“The overreaching objective of these guidelines…address the environmental sustainability concerns of our industrialization trade and development. And this is well aligned to our free zones operation,” Alinda said. 

Alinda further emphasized that the crucial question now is whether the guidelines will be effectively implemented and whether there is sufficient commitment from both the government and industrialists. He expressed concern that without a willingness to act, the guidelines risk becoming another well-intentioned document that sits unused on shelves.

Dagmar Zwebe, the Country Director of the Global Green Growth Institute which funded the development of the guidelines, said that Uganda’s journey towards becoming a middle-income country hinges significantly on industrialization. She noted that while Uganda can benefit from lessons learned in other countries, it is crucial to contextualize these lessons to suit Uganda’s specific conditions.

Zwebe highlighted the importance of selecting optimal locations for industrial parks, citing past examples such as Namanve and Mbale where poor placement of industries has been evident. She stressed the need for careful planning to avoid environmental degradation and to maximize the socio-economic benefits of industrial development.

Zwebe added that setting up industries and parks must also prioritize additional amenities, taking into account the environmental risks such as air and water pollution associated with industrialization. She emphasized the importance of resettling people to ensure their safety during these developments. She noted that Uganda should strengthen its polluter-pay policies to ensure that potential damages caused by industrial activities are considered as part of the investment.

To Zwebe, a green industrial park enables businesses to collaborate with local communities in reducing waste and pollution, while efficiently sharing resources to minimize costs and environmental impact. She emphasized that such parks can attract both local and foreign investments by providing consistent and stable service provision, thereby fostering economic growth and sustainability.

Geraldine Ssali, the Permanent Secretary at the Ministry, noted that the guidelines will help implement the 2020 National Industrial Policy and boost productivity. She added that this aligns with the objectives of the upcoming National Development Plan VI, which focuses on industrialization and productivity.

“In February this year, Uganda achieved a trade surplus with the European Union for the very first time. How do we sustain this position? We need to move into production and value addition, which calls for the development of industrial and business parks. However, these areas must not just appear haphazardly; we need to plan for them, hence these guidelines,” said Ssali.

The Uganda Free Zones Authority has over the years emphasized the need for Uganda to deliberately create large-scale industrial zones as a strategy to reduce the country’s trade deficit, particularly with some of the regional markets.  The said free zones are designated areas that offer a transnational business environment outside of a country’s customs territory, aiming to encourage domestic manufacturing and value-added investment. 

As part of its industrialization plan, Uganda has already approved over 25 industrial and business parks across various sub-regions of the country. Some of these parks have already been opened, while others are yet to become operational.

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