Uganda Launches Online Platform to Boost Local Marine Insurance
-
Loading... - CATHERINE SAIDI
- 15 Nov 2024
- 3 Views
- 0 Like
- 0 Comment
Uganda has taken a significant step towards enhancing its marine insurance sector with the launch of an integrated online platform dedicated to marine and goods-in-transit insurance. This initiative, spearheaded by the Insurance Regulatory Authority of Uganda (IRA) in collaboration with the Uganda Revenue Authority (URA), aims to empower local importers and retain revenue within the country.
The newly established system allows Ugandan importers to secure insurance from local providers, which simplifies the claims process and reduces operational costs for businesses. Traditionally, importers relied on foreign insurers for marine cargo insurance, leading to substantial capital outflow and often complicated claims processes. The new platform enables local insurers to offer the insurance component of Cost Insurance and Freight (CIF), allowing importers to obtain competitive insurance rates in local currency.
IRA Chief Executive Officer Kaddunabbi Ibrahim Lubega hailed the platform as a transformative milestone for Uganda’s trade and insurance sectors. He emphasized that the online tool will provide significant benefits to both importers and local insurers, ensuring that financial resources are reinvested within the Ugandan economy.
The platform is integrated with the Uganda Electronic Single Window, which enhances collaboration between the IRA, URA, and other key stakeholders. This integration simplifies the delivery of insurance services and fosters a more efficient, self-sustaining economy. The government anticipates that retaining insurance premiums within Uganda will lead to increased liquidity and enhanced revenue through locally collected VAT and stamp duties.
Henry Musasizi, the Minister of State for General Duties at the Ministry of Finance, Planning, and Economic Development, reiterated the government’s commitment to supporting local insurance firms. He acknowledged the challenges faced by importers, such as delays in claims and high costs associated with managing claims with foreign providers. The new platform aims to address these issues by providing clarity in insurance charges and confirming authentic insurance coverage.
To facilitate a smooth transition, the government has set a compliance deadline of December 31, 2024. Starting January 1, 2025, all imports will be required to be insured locally, with non-compliance subject to legal action. The IRA and URA are committed to ensuring a smooth implementation process, focusing on educating users about the benefits of local marine insurance.
A consortium of 20 non-life insurance companies has been established to pool resources and provide marine coverage, backed by actuarial reviews confirming the sector’s readiness to meet these demands. The government is optimistic that the platform will create a favorable environment for negotiating suitable coverage terms and premium rates, ultimately driving economies of scale for marine insurance.
Musasizi highlighted the significant revenue losses Uganda has faced due to capital flight and reliance on foreign insurers. According to a report from the Inter-Government Standing Committee on Shipping (ISCOS), the government lost UShs 60.3 billion in VAT and UShs 35 billion in stamp duty between 2009 and 2013 due to insurance of imports by foreign insurers. With the increase in imports over the years, these losses have likely escalated.
The launch of this platform represents a crucial step in Uganda’s journey towards enhanced trade facilitation and a robust local insurance sector. It reinforces national efforts to build a resilient economy that fosters local industry growth and ensures that Ugandan businesses can navigate the complexities of global trade with confidence.
As Kaddunabbi summarized, “Marine insurance is the anchor of global trade, safeguarding businesses against unpredictable risks, enabling them to navigate confidently into new markets.” The government’s initiative is expected to increase insurance literacy and foster greater resilience within Uganda’s trade ecosystem, ultimately benefiting the entire economy.
