Tuesday, 30 August 2016

National Automotive Industry Council of Uganda



 
National Automotive Industry Council of Uganda

Following the drafting of the Public Private Partnership Strategy of the Automotive Industry in Uganda, Automotive Industry Development Alliance (AIDA) is establishing a National Automotive Industry Council to support some of the proposed programs and frameworks.
The National Automotive Industry Council of Uganda (NAIC) is established to implement best practices and guidelines in the automotive industry and bring together automotive subsector associations, automotive industry leaders, stakeholders, auto suppliers, authorities and agencies. Membership of the Council will be drawn from stakeholders in the automotive industry.

NAIC will be a club of dedicated automotive industry leaders and professionals which will be assisted by the contributions from expert advisory groups in specialist areas. Priorities will be set by an executive led by a Chairman. We are continuously tasked by industry players and consumers to improve and protect and promote the sector at all levels. The council will identify issues and facilitate capability development efforts to uplift standards in Uganda’s automotive industry.

NAIC will represent the interests of the automotive industry sector on a national basis such as taxation, representation on national policy making bodies, policy and planning, trade, insurance, trade bodies, statistics, research & publications, regulations, corporations, public, financial Services, road safety, automobile engineering, consumer groups, auto manufacturers, industry infrastructure, police, traffic authorities, finance and administration, organizations, associations, chambers of commerce, government agencies and departments.

The council will be effectively represented from areas like used vehicles dealers, used vehicle bond companies, used spare parts dealers, new auto spares dealers, new vehicles country agents, light trucks, personal vehicles, commercial passenger vehicles, passenger bus transports, taxis, boda-boda motorcyclers, petrol stations, road safety organizations and activists, police, road construction companies, street parking managers, vehicle security companies, automotive technical institutions, insurances, tax consultants, research institutions and academia, driving schools, automotive associations, body collision repairers, garage service companies, towing recovery, mechanics, supporting industry infrastructures and suppliers, and other relevant bodies and personnel, etc.

Our Vision: Our vision is that every significant automotive entity has a strong presence in Uganda’s automotive industry. NAIC will have effective representation of Uganda’s automotive industry, working closely with industry leaders and member associations to promote choice, diversity and partnership in the automotive industry and to improve Uganda’s automotive industry for a sustained intellectual national leadership. The Council will be funded from membership fees, contributions and a suggested percentage (%) levy on the CIF value of all automotive imports into the Country.

Our Mission: NAIC will serve and support its members by:
  • Establishing a national advocacy for the automotive industry sector in Uganda
  • Providing strong and effective representation of the automotive industry sector to Uganda Government and other stakeholders
  • Promoting choice, diversity and autonomy
  • Highlighting the contribution of automotive industry sector to Uganda’s economy
  • Securing appropriate level of Government support for stakeholders in the automotive industry in Uganda





Public Private Partnership in the Automotive Industry in Uganda






Public Private Partnership in the Automotive Industry in Uganda

Enhancing Policy Dialogue and Advocacy through automotivesubsectorassociations and stakeholders

Public Private Partnership in transport and automotive industry in particular (PPPA) is often defined as primarily a set of institutional relationships between the Government and various actors in the private sector. The Government of the Republic of Uganda seems to recognize the dominance private sector participation in the automotive industry. On this basis, Automotive Industry Development Alliance (AIDA) is proposing to automotive industry stakeholders to forge and formulate the Automotive Industry PPP Strategy and Implementation Guidelines, as a means of improving the sector and augmenting the limited public resources with the private sector’s resources.

The Automotive Industry PPP Guidelines will provide a framework structured and managed by the Public Private Partnership in Automotive Industry (PPPA) Committee or PPPA Technical Working Group PPPA/TWG and the Ministry of Transports and Works, together with its partners.

One of the effective strategies is when sector industry associations, privatecompaniesand investors, stakeholders and operators engage in industry sector planning through coalitions working inpartnership with government with the overall goal of enhancing regulatory reform, policy, incentives and endorsement to improve the automotive industry sector that will in turn create an organized industry.

The Government retains the core state functions, services and assets that are to provide the services expected of the State. The PPPAStrategy and Guidelines will be informed by several other national policy documents, development plans and international best practices. These include:

§  National PPP framework,
§  National Transport Policy Framework,
§  MOWT Strategic Plan, and
§  Public Private Partnership in Transport Discussion Papers,
§  National Development Plan (NDP), and
§  MOWT Roadmap.
§  Private Sector Manifesto
§  International Best Practices and Evidence-based practices for Automotive Sector Governance


A strategic public-private partnership relationship will ensure a sustainable transport in Uganda. With strong political commitment and clear objectives and priorities; the appropriate mix desired for attaining efficient mobility in Uganda’s urban system would be ensured. It is recommended that Government should concentrate on legislation, regulation and creating conducive environment and less of being an operator; it should forge partnerships with the private sector and other stakeholders in policy formulation, reform and implementation. The road transport sub-sector accounts for more than 90 percent of internal passenger and freight movement in Uganda.

The Public Private Partnership in the Automotive Industry Strategy and Guidelines will set out its Vision, Mission, Objectives, Rational and Principles that define parameters as way to ensure sound strategic intend and focus needs and challenges of the automotive industry sector.

Institutional Setup and Responsibilities for the PPPA

Institutional setup is to be designed to cover all the concerned stakeholders in such a way that each handles the roles within its competency and within the context of the prevailing laws. i.e
1.      Automotive Industry Associations
2.      Motor Industry Sector Associations
3.      Trade Associations
4.      Corporate Companies
5.      Development Partners
6.      CSOs
7.      Vocational and Technical Institutions and Associations
8.      Consultancies and Research Organizations
9.      Etc

In executing its functions, the PPPA will be supported by the PPPA Project Steering Committee or PPPA/TWG, which will be composed of permanent members representing the various functional departments of the Ministry, and relevant bodies or associations representing the Private Sector, as well as ad hoc members that may be appointed from time to time for specific purpose of their expertise. Until such time that there is deep experience in the management of PPPA, there may be a need for occasional hiring of specialized advisors and expertise such as engineers,consultants, financiers, insurance experts, economists, sociologists, business people, logistics and transports specialists to support the PPPA Unit in the development and implementationPPP programs.

As far as possible, each private sector association should develop the necessary in-house skills and structures to carry out its own duties. The most important aspect to consider in determining capacity requirement is to recognize that it is crucial for the PPPA Unit to have multiple skills, which include expertise in the areas of auto industry, private sector governance, engineering and auto mechanics, business development and economics, government relations and regulatory affairs. Additionally, anotherimportant consideration in determining the capacity requirement for A/PPP is to know what the key success factors are for PPP Units in general.
                                                                                                  
The A/PPP Strategy will be born out of the commitment of the MOWT to deliver on its mandate “to oversee, monitor and regulate automotive sectors in the provision of transport services and ensuring quality, safety, standards, affordability and sustainability”.Despite its dominance in the economy and employment sector, the automotive industry sector is highly fragmented in Uganda. Apparently, there is no current specific data for the various subsectors of the automotive industry in Uganda. This may raise issues relating to monitoring, regulation, quality, safety, standards and consumer protections.

The Automotive/PPP Framework is underpinned by the following assumptions and observations:

1.      That there exists a multiplicity of automotive agencies and automotive groups;
2.      That there is erratic funding of public road agencies;
3.      That there is escalation of prices of new vehicles and their spare parts;
4.      Mobility crisis in rural areas;
5.      That most roads require rehabilitation instead of routine maintenance;
6.      That there is increasing rate of road accidents and high fatalities;
7.      There are limitations on the part automotive industry sector in terms of its governance;
8.      That private sector is well positioned in terms of its financial, commercial and managerial sources to bring about significant and sustainable improvements in the automotive sector;
9.      That the entry of the private sector into the partnership is sufficiently profitable;
10.  That appropriate framework is needed to ensure predictable and consistent implementation and regulation of the Automotive/PPP strategy;
11.  That appropriate allocation of risks between the public and the private operator is possible;
12.  That there is efficiency gain to be derived as a result of the partnership;
13.  That the automotive industry sector is a significant contributor to the economy but it is highly fragmented and inadequately represented;
14.  That there is little or no regular formal interaction between traffic regulators, police and the general automotive industry players, stakeholder and consumers;
15.  That there is complex vehicle registration criteria and processes;
16.  That there is inconsistentenforcement of laws and regulations, leading to corruption and misuse of regulation as source of income;
17.  That there is a widening automotive industrysector whichis underrepresented, fragmented and insufficiently regulated;
18.  That is there is low compliance of international environmental laws and standards in the automotive industry sector;
19.  There is there is a big gap and poor or no aftersales services from the main auto manufacturers and the automotive end users;
20.  A sizeable percentage of Uganda’s workforce is employed in the automotive industry;
21.  More than 70% of Ugandan vehicles are used machines;
22.  More than 80% of Ugandan vehicles are from Asian countries with Japan dominating the industry;
23.  The auto industry generates billions of shillings in direct and indirect taxes to Uganda’s Treasury;
24.  There is poor or no automotive industry R&D center in Uganda which is coupled with shortage of modern engineers with industrial, mechanical and electronic knowledge;
25.  Increased globalization exposes Uganda’s automotive industry to economic instability and regulatory pressure meaning Uganda must prepare now for continuing global changes;
26.  Current taxes and policies create vague environment for automotive investment in Uganda.
27.  The pace of global change will intensify, driven by customers, markets, safety standards, technology and new global OEM and Suppliers entrants;
28.  Uganda requires a comprehensive strategy focusing locally and regionally to strengthen its automotive industry for the future;
29.  There is a growing middle class and growing population with more women owning cars.
30.  There are no formal national periodical automotive industry analysis reports to inform policy, planning, investment and governance.

From the above therefore, there is need to collectively manage the automotive industry sector to help maintain the safety and standard of the industry. Recognizing the complexities in the provision and maintenance of transport, there is further need to evolve effective, reliable and functional management objectives and policies that could yield public-private partnership framework in Uganda’s automotive industry. With the Automotive PPP Strategy, the MOWTtogether with its agencies will be passing the operational issues to the private sector/operators through their respective associations, while retaining and increasing its focus on core responsibilities of regulation, big infrastructures, supervision and provision of core services such as policies and compliances, in line with directive of the National Transport or Automotive Policy. On the basis of this line of argument, efficiency gain is obvious. However, this initiative has to be accompanied by equally important improvements in various management processes and systems of stakeholders on this program.