Textile industries - The opening of Woolworths' biggest store in Africa outside South Africa raises debate as to what this means for Uganda's textile industry, a sector that once thrived in the seventies but now hangs by a thread. Woolworths' store in Naalya follows the entry of Mr Price, a South African store, and other firms from Kenya. Ali Mufuluki, the CEO Woolworths stores Uganda, said their expansion drive is down to Uganda's growth potential. "The Ugandan economy is growing very fast and retail trade is doing impressively, which drives our need to deepen and increase our grand presence in the country," Mufuluki said.

However, with companies like the mighty Nyanza textile already out of the market, there are worries the popularity of companies like Woolworth could hurt other local players.

Economic experts see more benefits, though. They point to an enlarged tax revenue base as one of the benefits. These international companies also motivate local traders to offer good-quality products to meet international standards.

On the other hand, however, these international firms are a threat as it means that those local companies that cannot invest in their businesses to meet international standards and match the competition could be driven out of the market. Dr John Mutenyo, an economist and a senior lecturer at the school of Business and Economic Management, Makerere University told The Observer that companies like Woolworths shouldn't be looked at as a big threat. "Local producers are most likely to learn from the good quality of Woolworths and strive to have their quality improved."

Lawrence Bategeka, the acting principal and a research fellow at the Makerere University Economic Research Policy Centre, also thinks there are bigger opportunities that come with these international firms. He says the local textile industries should instead be boosted to lure these foreign companies to relocate their industries to manufacture from the country instead of importing already-made materials to sell in their stores here.

"We can't say the coming of Woolworths is killing the local garment industry. Instead, such companies come with opportunities; the onus is on us to nurture our local textile industry, make it profitable for the likes of Woolworths and Mr Price to relocate their industries to this country," said Bategeka.

Experts do not agree that the customer who goes to Woolworths is the same customer that goes for the local garment, and therefore there might not be direct competition. Woolworths targets mainly middle-income groups. For instance, foot wear for children goes between Shs 80,000 to about Shs 200,000. A trouser can go for Shs 250,000 and beyond.

Meanwhile, Bategeka says the government should help local garment manufacturers boost their trade to match Woolworths' quality. He says the government can ensure cheap electricity to the manufacturers, easy access to credit, irrigation facilities, manpower resource, and quality planting materials.

Alon Mwesigwa

The Observer/20/01/2012