KAMPALA, May 8 (Xinhua) -- Uganda Free Zone Authority (UFZA), a state-run agency on Tuesday signed a memorandum of understanding (MOU) with multinational audit firm Ernst & Young to boost investment in the country's free zone parks.
Richard Jabo, the UFZA executive director, said the two institutions will share information and jointly participate in capacity building seminars to update and skill their workers on new tax developments.
"Since most of our work deals with sensitive tax matters, we need to have very skilled personnel and the partnership will help to sharpen and also create a pool of needed skilled labor," Jabo said.
A Free Zone is a designated area where goods are regarded as being outside the customs territory, as far as import duty is concerned.
It usually takes the form of manufacturing or processing facilities, science and technology parks or a tourism development zone.
Jabo said under the agreement, Ernst & Young will advise their clients to consider investing in the country's free zone parks.
He said government's objective is to attract 1 billion U.S. dollar worth of investments from the private sector by 2020, and build two public free zone parks to boost value addition, innovation and exports.
"Investors who manufacture from within the parks will be exempted from import duties for raw materials, and enjoy economies of scale accruing from planed production zones," he said.
According UFZA, about 12 private developers have been licensed and are operating free zone parks across the country, dealing mainly in agro-processing.
Mohammed Ssempijja, an Ernst & Young tax partner said the agreement will give the two institutions a platform to share ideas and insights that can help develop the economy.
"When you look at our economy, the growth prospects are limited, so as we are advising our clients, we shall also be telling them to consider investing here," Ssempijja said.
He said if optimized, the free zones will help government in promoting export of goods and services, promote investment from local and foreign sources, and also accelerate export led industrialization.
"The parks are meant to attract more investors in the industrial sector, boost production especially for the export market, and also create more jobs needed for our economy, and this MOU will help to speed that up," he said.
Ssempijja noted that Uganda's export of goods and services have stagnated for the last two fiscal years, as the country appears to have reached the limits of supply capacity in the main export industries.
"Our economy is heavily dependent on imports and import demand has continued to expand, widening the balance of payments. Therefore, if we are to achieve sustainable growth and development and structural transformation in Uganda, we must strengthen our external performance," he said.
Uganda's central bank figures show that the trade deficit in goods and services has almost tripled to nearly 3 billion dollars in 2015/16 from 1 billion dollars in 2005/06.
