Uganda has resolved to start the commercial production of motor vehicles after the process had stalled for years.
In a meeting chaired by president Yoweri Museveni on Monday, the Cabinet directed the ministry of finance to set aside over Ush20 billion
($5.6 million) next financial year to kickstart the construction of an assembly plant.
Following these successes, the government in 2014 allocated land in the eastern district of Jinja to Uganda’s Kiira Motors Corporation and China Engineering Limited to build car manufacturing plants, with a plan of starting production by this year.
In the Monday meeting, the Cabinet approved a road map for the commercialisation of the Kiira EV Project, noting that it must be phased.
The Ugandan government said the car assembly project would stimulate investment in the production of among others car components, creating over 2,000 direct jobs and 12,000 indirect jobs.
According to Kiira Motors Corporation, the assembling plant is expected to have an installed capacity of 5,000 vehicles.
Uganda is optimistic that the growing middle class in the country and in the region would provide market for the cars.
According to government figures, Uganda imports 50,000 cars annually.
At the regional level, the number of vehicles imported into East Africa each year has grown to over 250,000 and is expected to climb to 500,000 by 2030.
The East African Community member states -- Uganda, Kenya, Tanzania, Rwanda, Burundi, and South Sudan -- are pushing for the development of the automotive manufacturing industry in the region.
The region has set a 2019 target to start phasing out the importation of used cars.
Uganda has already proposed to ban the importation of all vehicles of eight years old or more.
Some legislators have welcomed the government's proposal, arguing that it will resolve the problem of importation of old vehicles after tax measures failed.
Kenya and Rwanda have already banned the importation of cars that are more than 10 years old.
The push to ban the importation of used cars has had car manufacturers contemplating to set up their businesses in the region.
Some are already setting up assembly plants in the region.