The high costs associated with standardising and certifying products through the Uganda National Bureau of Standards (UNBS) are hindering many agro-processors in northern and north-eastern Uganda, Monitor has learnt.
During a three-day orientation conference for agro-processors dealing in cassava, shea butter, and oil seeds, which began on September 23, many participants expressed frustration over certification costs and delays.
They said these limit market access and suppress production. The conference, held in Gulu City, was organised by the International Trade Centre (ITC), a joint agency of the United Nations and the World Trade Organisation, in partnership with UNBS. It targeted micro, small, and medium enterprises (MSMEs) across the Acholi, Lango, and Karamoja sub-regions.
Mr Phillips Okot Ongom, the general manager of Pajule Farmers’ Marketing Co-operative Society, said many small-scale processors are reluctant to pursue certification due to financial constraints.
‘The cost of certification and standardisation is not pocket-friendly, especially considering our low profit margins. The procedures are also lengthy and expensive,’ Mr Okot said.
Ms Nowella Ojara, the team leader at Divine Organic Foods, cited poor budgeting and limited financing as additional barriers to certification. Nearly two years ago, ITC launched the Strengthening Agribusiness Resilience and Competitiveness (STAR) project, funded by the Korea International Cooperation Agency, to build the resilience and competitiveness of agribusinesses and smallholder farmers in the cassava, shea, and oilseed sectors.
However, challenges around product certification remain a major bottleneck, limiting market access, competitiveness, product quality, and safety.
Mr Allan Wayira, STAR project programme officer, said a key challenge is limited access to accurate information and low capacity to comply with certification standards. ‘
Strengthening knowledge and building practical skills are essential for SMEs to comply and grow. That’s why the conference focused on standards compliance, certification readiness, and the implementation of Good Manufacturing and Hygiene Practices (GMP and GHP),’ he explained. But Ms Desire Kenganzi, a certification officer at UNBS, criticised some agro-processors for prioritising profit over consumer safety.
‘Many manufacturers no longer care about quality. They focus on profits and ignore due diligence. If proper certification was followed, toxic products wouldn’t reach the market,’ she said.
She added that processors had been assessed on GMP, GHP, and certification procedures through tailored training. However, certification fees, ranging from Shs500,000 to Shs1,000,000, remain a significant burden for rural enterprises. Mr Michael Ochora, a shea butter processor from Agago District, said knowledge gaps and resource constraints hinder efforts to meet national standards.
‘We lack the practical tools and knowledge to meet both mandatory and voluntary standards. Certification costs make things worse, many genuine processors can’t afford it, so their products miss out on better markets,’ he said.
Hundreds of agro-processors across the region dealing in cassava, shea butter, and oil seeds such as sunflower, simsim, and soybeans continue to lament their lack of competitiveness and market access.
According to UNBS, unless small-scale processors prioritise certification and standardisation, access to external markets will remain limited.
Mr Abubaker Bakulumpagi, principal certification officer at UNBS, said uncertified products cannot compete locally or internationally.
‘Many small-scale processors don’t label or certify their products. Others under-declare ingredients to evade taxes or avoid certification costs, which compromises safety and marketability,’ he said.
Mr Bakulumpagi warned that misleading product labelling and undeclared ingredients pose serious health risks, with uncertified food products contributing to growing healthcare costs and avoidable deaths.
‘People are consuming substandard products unknowingly, and it’s leading to illnesses and fatalities. That’s why we’re losing loved ones, we’re careless with our money and health,’ he added.
UNBS estimates that 54 percent of products on the Ugandan market are counterfeit or substandard, costing the country an estimated Shs6 trillion annually, about three percent of the national budget, in lost revenue.
In October 2024, the Speaker of Parliament, Ms Anita Among, emphasised the need for legal reforms to address counterfeit products.
The proposed Anti-Counterfeit Goods and Services Bill, 2024, aims to rid the market of substandard goods. The Anti-Counterfeit Hub Africa reports that more than half of Uganda’s 45.6 million people cannot distinguish between genuine and fake food products. Traders and manufacturers often exploit consumer ignorance to sell expired or substandard goods.
Complex formalisation process Despite government efforts to promote agro-industrialisation as a path out of poverty, MSMEs continue to face challenges in formalising operations. Processors cited the difficulty of complying with multiple regulatory bodies, including the Uganda Registration Services Bureau, Uganda Revenue Authority (URA), and the National Social Security Fund (NSSF),as additional burdens.
‘Formalisation requires a business environment that supports voluntary compliance. If the costs of formalisation exceed the perceived benefits, no one will make that transition,’ said Mr Ochora.
According to URA data, in FY2019/2020, wholesale and retail trade contributed Shs4.85 trillion (28.35 percent) to total tax revenue. The manufacturing sector contributed Shs3.49 trillion (20.43 percent). Despite these contributions, the formal tax base remains narrow, with modest gains over recent years.
The Uganda Investment Authority (UIA) reported that in FY2021/2022, 2,107 manufacturing firms employed 150,685 Ugandans. While income tax turnover improved slightly, reaching Shs22.1 trillion in 2020/2021, up from Shs19.3 trillion in 2019/2020, compliance remains a challenge.
UIA’s 2023 State of Investment Memo urged the government to simplify the tax regime for SMEs, reduce collateral demands, and create safeguards to encourage formalisation.