Uganda: Museveni Advisor Calls for More Government Procurement of Locally Made Medicines

Senior Presidential Advisor for Political Mobilisation Moses Byaruhanga has called for increased government procurement of medicines manufactured in Uganda, saying the policy can create jobs, conserve foreign exchange and strengthen the country’s industrial base.

Byaruhanga made the remarks last week during a meeting with the leadership of the Uganda Pharmaceutical Manufacturers Association (UPMA) and the State House medical team at Serena Hotel in Kampala.

The meeting reviewed progress in the government’s policy of supporting domestic pharmaceutical manufacturers and discussed challenges affecting the sector’s growth and competitiveness.

Byaruhanga said the engagement followed an earlier meeting he held with local pharmaceutical manufacturers in 2015 while contributing to preparations for the 2016 presidential elections.

He recalled that at the time, National Medical Stores (NMS) had a budget of about Shs110 billion, equivalent to approximately US$70 million, but only between five and 10 per cent of its procurement was sourced from local pharmaceutical manufacturers.

He said he subsequently engaged local manufacturers to understand why Ugandans were not investing sufficiently in an industry with a guaranteed government market.

According to Byaruhanga, manufacturers said they faced stiff competition because government procurement involved international bidding, exposing local firms to companies from countries such as India and China, where pharmaceutical production benefits from economies of scale.

He said the concerns were presented to President Yoweri Museveni, who in 2016 directed that medicines manufactured locally should be procured through domestic bidding.

“The purpose was to create a market for the domestic manufacturers, which could create domestic and local jobs, and also use local utilities like electricity, water and local raw materials where possible,” Byaruhanga said.

Byaruhanga said the policy has contributed to a significant increase in the share of medicines procured locally by NMS.

He said local procurement rose from about five per cent during the initial engagement to 60 per cent in the 2024/25 Financial Year.

He added that by March 2026, NMS had procured about 64 per cent of its medicines from local manufacturers during the 2025/26 Financial Year.

The increase, he noted, has occurred alongside a substantial expansion in the NMS budget, which has grown from about US$70 million in 2015 to nearly US$200 million.

“Now we are spending more locally, instead of taking all the dollars outside the country and also creating more jobs,” he said.

However, Byaruhanga said the government needs to address emerging challenges if the progress made in domestic pharmaceutical manufacturing is to be sustained.

One of the issues raised during the meeting was the number of pharmaceutical products, or molecules, eligible under the domestic procurement arrangement.

Byaruhanga said the State House medical team had raised concerns that the list had remained at 37 products for nearly a decade, despite the growth of Uganda’s pharmaceutical manufacturing capacity and the availability of additional locally manufactured medicines.

“The President’s directive did not limit the list. It said anything locally manufactured, the government doesn’t import. And that must be maintained,” Byaruhanga said.

He directed that the matter be followed up with relevant government agencies to ensure that locally manufactured medicines meeting the required quality standards are prioritised in government procurement.

He also raised concerns about off-take agreements, saying such arrangements should not create monopolies by granting one local manufacturer exclusive access to a government market for products that are already being manufactured by other Ugandan companies.

Instead, he said, off-take agreements could be used to encourage investment in new pharmaceutical products that are not currently manufactured locally.

“We want fair competition among local manufacturers. The off-take agreement can work easily if something is not locally manufactured,” he said.

Speaking on behalf of UPMA, the association’s chairman and Managing Director of Rene Industries, Rishi Vadodaria, welcomed the engagement with Byaruhanga and the State House medical team.

Vadodaria said UPMA represents more than 20 pharmaceutical manufacturers whose combined investments exceed US$500 million.

He said the industry employs more than 5,000 Ugandans directly and more than 20,000 indirectly, while supporting other local industries through the purchase of packaging materials, bottles, corrugated boxes and other locally produced inputs.

According to Vadodaria, local manufacturers produce a wide range of pharmaceutical products, including tablets, capsules, liquid medicines, external preparations, veterinary products, injectables, syringes and other surgical implements.

He credited the government’s Buy Uganda, Build Uganda (BUBU) policy and domestic procurement arrangements with supporting the expansion of Uganda’s pharmaceutical manufacturing industry.

Vadodaria, however, called for the list of locally procurable medicines to be expanded from 37 molecules to at least 100, saying this would allow domestic manufacturers to supply a larger share of the government market.

He also asked the government to review the use of off-take agreements where they affect manufacturers already producing the same medicines locally.

The manufacturers also raised concerns over taxes and regulatory costs associated with importing specialised equipment used in pharmaceutical production.

Byaruhanga said the government would engage the Uganda Revenue Authority (URA) and the Uganda National Bureau of Standards (UNBS) over the issues raised by the manufacturers.

Vadodaria specifically cited taxes imposed on specialised clean-room equipment, saying the additional costs increase the capital required to establish pharmaceutical manufacturing facilities.

He said establishing a new pharmaceutical manufacturing facility can require an investment of between US$8 million and US$10 million, making import duties, VAT and withholding tax on specialised equipment a significant cost for investors.

Byaruhanga said the concerns raised by UPMA would be followed up with the relevant government institutions.

Byaruhanga also announced that State House was strengthening its engagement with the pharmaceutical sector through a dedicated pharmacy desk.

He said the desk would provide a platform for continuous engagement between the State House medical team and pharmaceutical manufacturers as the government works to address outstanding challenges affecting the industry.

UPMA representatives at the meeting included Secretary General and Executive Manager of DEI BioPharma Dr Adrian Kivumbi Ddungu, Managing Director of Abacus Parenteral Drugs Ltd Ramesh Babu, Dr Sam Kitatta of ORO Pharma Group under the National Enterprise Corporation (NEC), and Irene Mbabazi, Personal Assistant to the UPMA chairman.

The State House medical team included Senior Pharmacist Dr Esther Kisakye, Senior Presidential Advisor on Pharmacy Dr Margaret Naluyima and paediatrician Dr Sekina Hussein, among others.

The meeting comes as Uganda seeks to expand domestic pharmaceutical manufacturing and reduce reliance on imported medicines, with manufacturers pushing for a larger government market, lower production costs and a more predictable procurement environment.

By Nile Post.