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Uganda’s steel and milling industries stand as vital pillars of the nation’s industrial landscape, reflecting both its economic potential and the challenges it faces. From producing steel for construction to milling grains for food security, these sectors are intertwined with Uganda’s development goals, offering a glimpse into the country’s aspirations for self-reliance and growth. Let’s explore the current state of these industries, their contributions, and the road ahead.

The Steel Industry: Building Uganda’s Future

Uganda’s steel industry has seen steady growth, driven by abundant natural resources and rising demand for construction materials. With over 500 million tons of iron ore deposits confirmed through surveys in regions like Kigezi in the southwest the country has a solid foundation to become a regional steel hub. Companies like MM Integrated Steel Mills, Steel Rolling Mills (part of the Alam Group), and Uganda Baati Limited are at the forefront, producing everything from reinforcement bars to roofing sheets.

In 2018, the National Planning Authority reported an installed steel production capacity of 1 million tons per annum, though only about half was utilized. Fast forward to 2025, and utilization has likely increased, spurred by infrastructure projects like roads, bridges, and the Standard Gauge Railway. Yet, Uganda still imports significant amounts of steel around USD 369 million annually as of recent estimates with 60% of raw materials for steel processing coming from abroad. Only a tiny fraction (0.0033%) of its iron ore reserves is currently tapped, highlighting a massive opportunity for local extraction and refining.

The industry’s growth isn’t just about numbers; it’s about impact. Steel supports Uganda’s booming construction sector, employs thousands, and saves foreign exchange by reducing import reliance. Forecasts from studies like those by Muwanguzi et al. suggest that with sustained investment, liquid steel production could climb from 210,000 tons in 2019 to 1.4 million tons by 2024 a target that, if met or neared by now, signals a robust trajectory. Challenges remain, though: high energy costs, limited technological upgrades, and a reliance on imported scrap steel keep production costs steep.

The Milling Industry: Feeding the Nation

On the milling front, Uganda’s industry revolves heavily around maize, a staple food for over 92% of households. The maize milling sector is a mix of small-scale millers and a few larger players, processing grains into flour that feeds both local and regional markets. A 2017 survey by SPRING/Uganda mapped 780 maize millers across 62 districts, revealing a fragmented industry dominated by operations producing less than 20 metric tons per day. The Central region leads with 38% of millers, followed by the Eastern and Northern regions at 22% each.

Milling isn’t just about food it’s about nutrition and policy too. Uganda’s push for maize flour fortification, backed by the National Working Group on Food Fortification, aims to combat malnutrition. Yet, progress is slow. Only 6.5% of households consume fortified maize flour, despite 42% of flour being “fortifiable” (industrially processed). Small-scale millers, exempt from mandatory fortification due to their size, dominate the market, leaving much of the flour unfortified. Fraudulent packaging and untraceable brands further complicate quality control.

Beyond maize, grain milling for wheat, sorghum, and other crops supports Uganda’s agricultural value chain. Companies like Bajaber Millers and Unga Millers process large volumes, adding value for farmers and boosting exports. However, inconsistent power supply and outdated equipment hinder efficiency, while the lack of widespread fortification limits nutritional gains.

Synergies and Challenges

The steel and milling industries, though distinct, share common threads. Both rely on infrastructure roads for transporting steel and electricity for running mills and both face energy constraints. Steel provides the structural backbone for milling facilities, while milling sustains the workforce driving industrial growth. Together, they embody Uganda’s shift from raw resource exporter to value-added producer.

Yet, hurdles loom large. Steel’s dependence on imported raw materials and milling’s reliance on small-scale, unregulated operators stifle scalability. High operational costs, driven by power shortages (a long-standing issue in Uganda’s industrial sector), affect both. For steel, tapping into local iron ore requires hefty investment in mining and smelting infrastructure. For milling, scaling fortification needs better regulation and technology adoption among small millers.

The Way Forward

Uganda’s steel and milling industries are poised for transformation. For steel, integrating the value chain mining local ore, expanding smelting capacity, and boosting domestic production could slash imports and position Uganda as an East African steel leader. Public-private partnerships, like those hinted at in government plans, could fund this shift. A 2020 study projected a potential 1.1 million tons of steel production by 2024 with the right investments; if Uganda is on track, 2025 could mark a tipping point.

For milling, the focus should be on modernization and nutrition. Equipping small millers with affordable fortification technology, as seen in Tanzania’s Sanku project, could bridge the gap. Strengthening regulatory oversight to curb counterfeit products and incentivizing larger-scale processing could elevate quality and exports.

Uganda’s steel and milling industries reflect a nation in motion building its infrastructure and feeding its people. The steel sector lays the foundation for growth, while milling ensures sustenance and resilience. With strategic investments, policy support, and a push for local resource use, these industries could propel Uganda toward its Vision 2040 goals of industrialization and prosperity. The raw materials are there; the demand is growing. Now, it’s about forging the future one steel beam and one sack of flour at a time.

GRONET blends insights into Uganda’s steel and milling sectors, highlighting their current status, challenges, and potential as of the given date