ISSUE 64 | JUNE 2024

AN OFFICIAL NEWSLETTER OF THE FEDERATION OF UGANDA EMPLOYERS

FUENEWS

THE VOICE OF EMPLOYERS

FUE CEO MESSAGE

Dear Esteemed Member,

According to the International Labour Organisation (ILO), the labour participation rate is a measure of the proportion of a country’s population that engages actively in the labour market and provides an indication of the size of the supply of labour available to engage in the production of goods and services relative to the population. The National Labour Force Survey 2021 conducted by the Uganda Bureau of Statistics (UBOS) reports that the total working population of Uganda is 55% accounting for over 23.5 million of the estimated total population of 42.9 million people.

As a tripartite partner and key stakeholder on labour and employment matters, FUE represented Employers at the 112th Session of the International Labour Conference (ILC) convened annually in June. The ILC is the parliament of labour mandated to discuss pertinent issues in the world of work consisting of plenary sessions, side events and discussion sessions between Employers, Government Officials and Workers’ representatives. In accordance with Article 7 of the ILO Constitution, elections for members of the ILO Governing Body for a three-year period were conducted. I am delighted to have been elected as a deputy member of the ILO Governing Body 2024-2027 and believe this milestone presents valuable opportunities for our service to the Employers’ fraternity. Additionally, the inaugural forum for the Global Coalition of Social Justice was organised to share insights on making social justice the basis for lasting peace, shared prosperity, equal opportunities and a just transition to more sustainable societies. We believe that collaborations between tripartite partners is significant to create a conducive work environment to enhance job creation, boost entrepreneurship and decrease dependence on the informal sector to advance economic growth.

The World Day Against Child Labour (WDACL) 2024 was focused on celebrating the 25th anniversary of the adoption of ILO Convention No. 182 on the Elimination of the Worst Forms of Child Labour that was ratified at the 87th session of the ILC in 1999. One of the key highlights of the ILC was the WDACL side event which called upon stakeholders to accelerate action to end child labour in line with Sustainable Development Goal Target 8.7. We stay committed to working with the ILO and other partners to eradicate forced labour, modern slavery, human trafficking and child labour to preserve the future working population of Uganda.

Thank you,
Together for Employers.

Douglas Opio

The Chief Executive Officer, FUE

CONTENTS

  • FUE CEO Message
  • The 112th International Labour Conference
  • The World Day Against Child Labour 2024
  • FUE Hosts Bipartite ADR Training
  • Employers’ Industrial Relations Clinic
  • Managing Innovation For Business Growth In Uganda
  • The National Budget Highlights For The 2024/2025 Financial Year
  • State Of The Nation Address 2024
  • Call For Participation In The Employers’ Salary Survey 2024
  • Enhance Relationship Management Practices For Business Growth And Sustenance
  • Upcoming Events
1

THE 112TH INTERNATIONAL LABOUR CONFERENCE

The International Labour Conference (ILC) is the International Labour Organisation (ILO’s) highest decision-making body that establishes and adopts international labour standards and is a forum for discussion of world of work issues. The 112th session of the ILC was convened from 3rd to 14th June in Geneva. Our Chief Executive Officer, Mr. Douglas Opio represented Employers on the Ugandan delegation with other tripartite partners that attended the conference.

At the conference, Employers, Government officials and Workers representatives from the 187 ILO member states gathered to discuss a wide range of world of work issues in plenary sessions and committee meetings. The sessions included a standard-setting discussion on protection against biological hazards, a recurrent discussion on the strategic objective of fundamental principles and rights at work and a general discussion on decent work and the care economy.

A key highlight from the conference was the Inaugural Forum of the Global Coalition for Social Justice. The Forum gathered over 250 partners of the Global Coalition for Social Justice, during the ILC. Open to Coalition partners and ILO accredited tripartite delegations to the ILC. The programme of the Inaugural Forum is structured as a continuation of the ongoing collaborative effort initiated by partners on the thematic development of the Coalition. The session focused on specific actions taken by partners to promote social justice, in alignment with the Coalition’s thematic areas. It featured three thematic dialogues on:

  • Building the resilience of societies

  • Improving the coherence between economic and social policies

  • Fostering social dialogue for shared prosperity

These engagements are crucial to foster partnerships and collaboration among tripartite partners to ensure smooth work operations, boost maximum productivity, uphold labour standards and achieve decent work for all. 

During ILC 2024, the ILO Governing Body elections were conducted for a three-year period with our CEO, Mr. Douglas Opio being elected as a deputy member from 2024-2027. We believe this opportunity is significant milestone to enable the Federation serve Employers’ interests and needs at international level.

Recommendations from the ILC included progress towards regulating biohazards, a review of work conditions in the care sector and the key role of fundamental principles and rights in a rapidly changing world of work.

WORLD DAY AGAINST CHILD LABOUR 2024

The Uganda Bureau of Statistics National Labour Force Survey 2021 revealed that 6.2 million (40% of the 15.7 million) children aged 5-17 years were involved in child labour excluding those doing household work, with more boys (50.4%) than girls (49.6%) working. On 12th June annually, the World Day Against Child Labour (WDACL) is commemorated to accelerate efforts to end child labor globally. The WDACL theme 2024 was, ‘Let’s act on our commitments: End Child Labour!’. In Uganda, the commemoration event was organised by the Ministry of Gender, Labour and Social Development with FUE, Enabel, ILO and the European Union representatives in attendance at Mestil Hotel.

FUE started taking action in fighting child labour in 1999, by withdrawing children from tea, rice, and sugar plantations and putting them back in school. Employers have also been supported through child labour due diligence trainings to take practical steps to implement sustainable farming practices. Additionally, in partnership with the ILO and other stakeholders, various projects have been implemented to accelerate the elimination of the worst forms of child labour child labour.

At the ILC side event for WDACL, Our CEO, Mr. Douglas Opio was a panelist discussing the topic, ‘Eliminating Child Labour-Progress, Challenges and the Way Forward’. This knowledge sharing session was key to deliberate on implementation of actions to eliminate child labour and promote the universal ratification of Convention 138.

Its significant to note that child labour is a disadvantage to the future working population of any country. We call upon Employers to desist from recruiting children and invest in community empowerment, offer education opportunities and sensitise their staff about the dangers of child labour.

FUE HOSTS BIPARTITE ADR TRAINING

Alternative Dispute Resolution (ADR) is referred to as the process of settling disputes out of court. FUE was delighted to host a bipartite training on ADR for board members of National Organisation of Trade Unions (NOTU) and Central Organisation of Free Trade Unions (COFTU) on Tuesday 4th June at Eureka Hotel. The objective of the training was to build capacity on handling ADR for Employers and workers. Participants were from NOTU, COFTU and FUE.

The training involved a detailed presentation on the four core mechanisms of ADR including Negotiation, Arbitration, Conciliation and Mediation. The principles of ADR such as reconciliation, accountability, truth-telling and reparation were highlighted as results of a transparent process. Participants also had the opportunity to share previous cases where they applied ADR, the advantages, demerits, and lessons learnt for future references.

Furthermore, FUE presented the Draft DI-ADR Guide that was developed in partnership with the Danish Industry (D.I) that will act as an instruction manual for a smooth ADR process specifically when solving work-based disputes.

Employers are encouraged to apply ADR to mitigate workplace conflicts and grievances to save time and costs as well as maintain the reputation of the organisation.

If you would like a customised training on ADR, contact info@fuemployers.org | 0392 777 410 for more information.

EMPLOYERS’ INDUSTRIAL RELATIONS CLINIC

One of FUE’s core services is to provide Employment Relations and Legal services to organisations. On 27th June 2024, we conducted the Employers’ Industrial Relations Clinic from 8:30am (EAT) at the FUE Training Centre in Kiwanga-Namanve. The theme of the clinic was, ‘Procedural and Substantive Fairness in Employment Decision-Making’. Legal Officers, Human Resource Practitioners and Line Managers were in attendance.

Participants were equipped with practical skills to effectively address labour challenges, share experiences and foster collaboration with all stakeholders. The training provided valuable insights into creating a harmonious working environment for the management and staff to boost maximum productivity. Employment law compliance was also emphasised as a significant tool to ease daily work operations.

A conducive work environment is a prerequisite to increased productivity, staff retention, business growth and economic development. We remain committed to ensuring Employers invest in good industrial relations.

MANAGING INNOVATION FOR BUSINESS GROWTH IN UGANDA

According to statistics from the Innovation in Business Statistics written by WifiTalents, 82% of companies report that innovation is critical to the continued success and growth of their organisations. On Wednesday 12th June 2024, we conducted a virtual sensitisation on, ‘Managing Innovation for Business Growth in Uganda’ in partnership with Tinkr. Business Leaders, Human Resource Practitioners and Line Managers were in attendance.

During the webinar, participants were enlightened on the types of innovation such as product, process, business model, organisational and social innovation. Implementing and adapting existing solutions in the new context, incremental, radical and disruptive innovation were discussed as the different degrees an organisation can approach during the innovation process. In addition, Employers were implored to ensure a balance between quality and innovation that are fundamental to offering value to their clientele.

An organisation’s ability to innovate is recognised as a key factor for sustainable growth, increased employability and socio-economic transformation. We applaud Employers that have embraced innovation and applied new ways of work in business operations.

To request a training customised to your organizations’ needs, contact Yusuf Nsubuga, the Training Manager on yusuf.nsubuga@fuemployers.org

THE NATIONAL BUDGET HIGHLIGHTS FOR THE 2024/2025 FINANCIAL YEAR

On Thursday, 13th June 2024, the National Budget estimate for the Financial Year (FY) 2024/2025 was presented by Hon. Matia Kasaija, the Minister of Finance. The theme for 2023/24 Budget is, ‘Full Monetization of the Ugandan Economy through Commercial Agriculture; Industrialization; Expanding and Broadening Services; Digital Transformation, and Market Access’.

According to the background to the Budget for FY2024/25, the main thrust of strategy is on maintaining peace and security, road maintenance and construction of a few strategic roads, rehabilitation of the Meter Gauge Railway and construction of the Standard Gauge Railway, electricity transmission and utilization of existing energy stock, investing in wealth creation initiatives, investing in the people of Uganda through education, health and water, preparedness and management of natural disasters as well as management of international commitments. This budget is the fifth and the last part for the implementation of the Third National Development Plan (NDPIII). The state of development outcomes and service delivery indicators at the end of FY 2024/25 will confirm the extent to which the development targets which were set in the NDPIII were achieved.

The size of the economy is now estimated at Shs 202 trillion (USD 53.3 billion) up from Shs 184.3 trillion (USD 48.8 billion) in the previous financial year while GDP per capita is USD 1,146 compared to USD 1,081 registered in financial Year 2022/23 as highlighted in the budget speech. While reading the budget for next financial year, Hon. Matia Kasaija revealed that Uganda’s GDP is projected to grow by 6 percent the next financial year compared to 5.3 percent in FY2023/24. He said the improved performance of the economy is attributed to the higher growth in all sectors of the economy. The growth in the services sector has been impressive, mainly driven by strong recovery in retail and wholesale trade, tourism, communication and real estate activities. Additionally, industrial growth was mainly driven by manufacturing, construction and mining while agricultural growth was increased through production of food, cash crops and livestock. Other factors which supported strong economic growth include: Low inflation and relatively stable exchange rate which have allowed good investment planning and supported export competitiveness, increased investments in the oil and gas sector related projects supported by Foreign Direct Investment, higher external demand for Uganda’s products including agricultural and industrial products, recovery of tourism supported by increased investment in tourism infrastructure and marketing, peace and security for persons and their property.

In line with the budget projections, Uganda’s growth strategy for the next financial year and in the medium term is anchored on four key growth drivers i.e. Agro-industrialisation, Tourism, Mineral development specifically in the oil and gas sector in addition to Science, Technology and Innovation (STI). These are the core sectors that are expected to propel Uganda to a 500-billion-dollar economy in the next one-and-a-half decade.

The total resource envelope for the Financial Year 2024/25 amounts to Shs 72.137 trillion which is expected to be raised from both domestic and external sources in the following proportions.

  • Domestic revenues amount to Shs 31.982 trillion, of which Shs 29.366 trillion will be tax revenue and Shs 2.616 trillion will be non-tax revenue
  • Budget Support – Shs 1.394 trillion
  • Domestic Borrowing – Shs 8.968 trillion
  • Treasury bonds for settlement of Government outstanding obligations to Bank of Uganda as at 30th June 2024 – Shs 7.779 trillion
  • Domestic Refinancing of maturing domestic debt – Shs 12.022 trillion
  • Petroleum Fund drawdown – Shs 115.4 billion
  • Project support (external financing) – Shs 9.583 trillion
  • Local Government revenue collections – Shs 293.9 billion

The total government expenditure for FY 2024/2025 is projected at Shs 72.137 trillion; of which the total appropriation is Shs 37.56 trillion and statutory expenditure is Shs 34.756 trillion.

Tax Measures for Financial Year 2024/25 to realise the targeted domestic revenues worth Shs 31.982 trillion.

  • Imposition of excise duty on powdered beer at Shs 1,000 per kilogram
  • Imposition of excise duty at a rate of 0.5 percent of the value of withdrawals of money from other platforms other than mobile money. This does not apply to withdrawals from agent banking or banking halls
  • Increase excise duty on petrol by Shs 100 per litre
  • Increase excise duty on diesel by Shs 100 per litre
  • Increase excise duty on imported wines from 80 percent or Shs 8,000 per litre to100 percent or Shs 10,000 whichever is higher
  • Imposition of excise duty on adhesives, grout, white cement and lime. The objective is to align the tax treatment of these products with that of cement.
  • The supply of electric motorcycles, vehicles manufactured or fabricated in Uganda and their respective charging stations and batteries for electric motorbikes, charging stations and related services are exempt from tax. The objective is to facilitate the growth of e-mobility and affordability of electric cars and motorcycles and protect the environment.
  • Provision of taxable goods/ services by an employer to an employee will attract VAT

The following tax incentives have been provided:

  • Investors are exempted from tax capital gains arising from the sale of holdings in private equity or venture capital funds regulated by the Capital Markets Authority. The intention is to incentivise private equity or venture capital investments in Uganda
  • Tax holidays have been provided on the income of a person who manufactures and fabricates electric motor vehicles, electric motorcycles, electric batteries and electric vehicle charging equipment, as well as the income of a person who develops, establishes or operates a medical facility or hospital facility
  • The government has extended the waiver of penalties and interest on arrears outstanding by June 2023. This waiver will apply when the taxpayer pays between July and December 2024
  • A 10% withholding tax has been introduced on commission paid to the banking agents and fintech agents (payment service providers)

Additional revenues will be generated from compliance measures undertaken by URA. These include:

  • Expanding URA presence and coverage by opening up 5 liaison offices
  • Strengthening the enforcement and use of Electronic Fiscal Receipting and Invoicing System (EFRIS) and Digital Tax Stamps (DTS) and the rental tax solution
  • Strengthening the exchange of information with other tax authorities to combat illicit financial flows and under-declarations
  • Strengthening enforcement interventions
  • Shs 2.946 trillion has been allocated to the Health sector to enhance the health of Ugandans
  • Shs 2.497 trillion has been allocated to the Education
  • Shs 355.79 billion has been allocated for social protection
  • Shs 516.78 billion next financial year for climate change mitigation, natural resources, environment and water resources management
  • Shs 1.059 trillion has been provided for Parish Development Model
  • Shs 100 billion has been allocated for ‘Emyoga’ to support more Ugandans to create wealth and boost their incomes
  • Shs 55 billion has been allocated to Uganda Development Bank to provide relatively affordable capital to businesses
  • Shs 1.878 trillion has been allocated towards deepening agro-industrialisation with increased focus on commercialisation and value addition in agriculture
  • Shs 427.21 billion has been allocated for procuring and distribution vaccines against foot and mouth disease
  • Shs 289.6 billion has been allocated for the tourism development programmes
  • Shs 1.629 trillion has been allocated for several critical interventions associated with tourism including, construction of tourism roads, road rehabilitation and upgrade under Kampala Capital City Authority, support to Africa Cup of Nations 2027 and completion of key stadia, among others
  • Shs 55 billion has been provided to Uganda’s Missions Abroad to support the Uganda Tourism Board (UTB) to market Uganda to potential tourists, market our exports and attract more investors
  • Shs 50 billion allocated to Presidential Initiative on Banana Industrial Development (PIBID) to complete the capitalisation of the company to transition into a self-sustaining business
  • Shs 75 billion has been allocated to improve coffee value chain development
  • Shs 3.3 billion has been allocated for Space Programme activities next
    financial year
  • Shs 41.55 billion has been allocated for interventions for further mineral development
  • Shs 920.86 billion for the oil and gas sector to, among others, prioritise the development of the East African Crude Oil Pipeline (EACOP) hub in Tanga
  • Shs. 4.989 trillion has been allocated for infrastructural development including construction of new strategic roads, rehabilitation of the Metre Gauge Railway, and commencement of construction of the Standard Gauge Railway
  • Shs 162 billion has been provided for completion and operationalisation of Kabalega International Airport in Hoima
  • Shs 246 billion to continue developing the ICT and digital transformation
  • Shs 982.56 billion has been allocated for electricity generation and transmission to increase connectivity and access and power usage
  • Shs 9.588 trillion has been allocated to security, including shs 481.4 billion which will be used by the Judiciary for the administration of justice
  • Shs 18.1 billion-plus a Contingency Fund of Shs 146.26 billion has been allocated to support disaster response and management

Therefore, there is need for budgetary discipline and control to eliminate excessive borrowing to finance supplementary budgets that could increase the huge national debt burden as well as reduce on local businesses accessing affordable credit. FUE believes a strict strategy to disburse these funds will improve access to capital, increase return on investment and enhance employer competitiveness.

STATE OF THE NATION ADDRESS 2024

In accordance with Article 101 (1) of the Constitution of Uganda, the State of the Nation Address (SONA) 2024 was delivered on Thursday 6th June 2024. His Excellency, President Yoweri Kaguta Museveni delivered the SONA at Kololo Independence Grounds. Members of Parliament, Ministers of State, Financial Analysts and other dignitaries were in attendance.

In his speech, the President revealed that Common Market for Eastern and Southern Africa is buying goods and services worth $2.157b from Uganda. He reprimanded corrupt tendencies among government officials and public officers and emphasised the need to act responsibly with national assets. Mr. Museveni also appreciated the parliament and other leaders for their commitment to working towards achieving the National Development Plan III.

Additionally, the President assured traders that in partnership with Kenya, there has been an agreement to remove non-tariff barriers on particular commodities to ease cross-border business across East Africa.

We believe Uganda is on the right path to sustainable development with concerted efforts from all stakeholders engaging in various economic activities that are significant to national development.

CALL FOR PARTICIPATION IN THE EMPLOYERS’ SALARY SURVEY 2024

In line with our lobbying and advocacy agenda, we annually conduct the FUE Salary Survey to support Employers attract and retain the best talent as well as benchmark renumeration packages offered by organisations within the same sector to enhance employer competitiveness at local, regional and international level.

We call upon Employers to participate in the Salary Survey 2024.

Confirm attendance here

For inquiries contact info@fuemployers.org | 0392 777 410.

FUE STAFF COMMENTARY

ENHANCE RELATIONSHIP MANAGEMENT PRACTICES FOR BUSINESS GROWTH AND SUSTENANCE

“To have a healthy and thriving business, there must be healthy relationships with the C.E.O.S. in the organization, and I’m not referring to the Chief Executive Officers. I am talking about the Customers, the Employees, the Owner (or stockholders), and the Suppliers”, says James Hunter, the international leadership expert and inspiring speaker who hails from Detroit, Michigan. While Ian Hutchinson, the author of People Glue says, “Your number one customers are your people. Look after your employees first and then customers last”.

Competition in almost every business environment is inevitable. For your business to survive and thrive in this competitive business environment, and to stay ahead of competition, you must establish and maintain good relationships with your employees, business partners and customers. This is done through relationship management.

Relationship management is an indispensable part of the modern business strategy. It extends beyond just building bonds with customers to creating a strategy for improving and maintaining relationships with key stakeholders – employees, customers, shareholders, business partners, communities and government. Effective relationship management is a critical component of a successful business strategy.

According to Kishore Kumar, Relationship Management is the process of building, maintaining, and enhancing relationships with key stakeholders, including customers, clients, partners, suppliers, and employees. By building strong relationships with key stakeholders, organisations can drive business success, strengthen customer loyalty, and create opportunities for growth and expansion.

Relationship Management encompasses various types of relationships each of which serving different purposes and contexts. These include: Employee Relationship Management (ERM), Customer Relationship Management (CRM), Supplier Relationship Management (SRM), Partner Relationship Management (PRM), Investor Relationship Management (IRM), Community Relationship Management (CRM), Government Relationship Management (GRM), Public Relations (PR), and Social Media Relationship Management (SMRM). Each type of relationship management plays a crucial role in establishing and nurturing connections that contribute to the success and growth of organizations and individuals alike (Kishore Kumar, 2024). However, maintaining relationships with customers is a prime requirement and it is very important for the growth and success of a business (Mike Floeck, 2024).

This begs the question: Why do businesses need to enhance relationship management? Relationship management whether Business to Customer Model or Business to Business Model is established and maintained in order to: retain customers and attract new ones, mitigate risks, build the business brand image, improve administrative efficiencies, establish loyalty and trust, enhance communication, and for cost effectiveness that is, it would result in a greater Return on Investment (Apptivo Inc. 2024). So, effective relationship management help businesses drive customer satisfaction, retention, and ultimately, business growth.

While some organisations use special tools like software for relationship management, others do so by hiring dedicated individuals known as Relationship Managers. A relationship manager is responsible for developing and upholding relationships with clients or consumers on behalf of an organization. They are crucial in ensuring customer satisfaction and fostering long-term business partnerships. Their primary duty is to understand clients’ needs and requirements and provide personalized solutions or services.

In addition, Relationship Managers act as a contact of a single point with clients, offering assistance, addressing inquiries, and resolving issues. To do those tasks, they frequently speak with clients through phone conversations, emails, or in-person meetings in order to build trust and comprehend their changing demands. Besides, Relationship Managers collaborate with internal teams, such as marketing, sales, and customer support to ensure smooth coordination and delivery of services, gather clients’ feedback and relay it to the appropriate departments for improvement or adjustment. Relationship Managers also play a crucial role in cross-selling products or services to existing clients hence, contributing to revenue growth (Kishore Kumar, 2024).

According to Mike Floeck (2024), there are five strategies an organization can use to build strong relationship management for the purpose of retaining more customers. These strategies include the following; Define your expectations, communicate with transparency, drive value by delivering beyond expectation, strive for consistency, and keeping diligent records (customer data and business records).

A recent study conducted by Bain and Company shows that a 5% increase in customer retention can result in a profit increase between 25% and 95%. This data points to the crucial role that effective relationship management plays in a business’s overall profitability and success.

Therefore, relationship management is inevitable for any business to succeed. When your business builds and maintains effective relationship management, you can definitely thrive in this competitive business environment. Indeed, as Susan Spritz Myers, the Executive and Team Coach, (2023) rightly noted, the cornerstone of business success hinges on the ability to build honest and lasting relationships with clients, employees, and business partners.

By Patrick Ajuna, Policy and Research Officer

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