Kampala, Uganda | THE INDEPENDENT | The Uganda Free Zone Authority (UFZA) has signed a memorandum of understanding with the National Enterprise Corporation (NEC) to construct a public free port zone at Entebbe International Airport.
NEC is the commercial arm of the Uganda People’s Defense Forces (UPDF). The deal signed recently will see NEC construct the initial phase of the zone that is expected to create about 200 direct jobs upon completion. It is still not clear how much it will cost government to construct it.
A free zone means a designated place in which companies are taxed very lightly or not at all to encourage economic activity. Countries use such places to encourage companies to produce for export.
The MoU was signed by UFZA Executive Director Richard Jabo, and the Managing Director of NEC, Lt Gen. James Mugira, at NEC offices in Bugolobi, Kampala.
A statement from UFZA indicated that the authority had acquired five acres of land from Civil Aviation Authority (CAA) for development of Free Port facilities in 2018.
“This is part of the Master Plan for the rehabilitation and expansion of Entebbe International Airport. Works on Entebbe Airport Free Zone will commence upon conclusion of the Feasibility and Master Plan in quarter two of the 2019/20 [financial year],” the statement said.
The sectors expected to set up in the zone include food processing (fish, beef and dairy), horticulture (flowers, fruits and vegetables), logistics (cold storage, warehousing and transhipment), and mineral processing.
Most of these would benefit from the closeness to the airport since the target is for export. The Free Zones are schemes set up by Government to boost export-oriented investment.
According to UFZA 2017/18 report, the number of declared Free Zone areas grew to fourteen as at June 2018.
The growth, the authority reports, came along, for the first time, with some exports attributed to free zones, which, indeed, was a positive development on the aim of the free zones establishment.