Investment in the country’s oil and gas sector projected to reach 11.2Tn in 2022 as Ugandan enterprises, Citizens’ benefits grow.
Drake Nyamugabwa
Following the signing of the Final Investment Decision (FID) for the Tilenga, Kingfisher and EACOP and the implementation of the Local Content policy, the increase in investment and the participation of Ugandan Citizens, and Enterprises in the oil and gas subsector has been growing as indicated in the growth in the numbers for employment and in the opportunities for providing goods and services in the sector and the related sectors in Uganda’s economy.
Stakeholders in the oil and gas sub-sector have convened to discuss this growth in the 3rd national content conference that happened from 28th -29th June 2022 at Serena Hotel in Kampala.
The theme of the conference was: “Creating lasting value through enhanced national participation to accelerate Uganda’s socio-economic transformation”
The Minister of energy and mineral development Hon. Dr. Ruth Nankabirwa Sentamu in in picture before during the conference said that the country has taken the necessary steps to put in place enabling legislation to ensure that all the gains projected from the sector come to fruition.
She said that the National Oil and Gas Policy provides for the use of the country’s oil and gas resources to contribute to the early achievement of poverty eradication and to create lasting value for society.
“The government is committed to ensuring that the goal of the Local Content Policy of increasing the participation of Ugandan citizens and enterprises in the oil and gas industry in Uganda from the current 28% to 80% local content by 2040 is achieved and this important journey starts with the ongoing development activities” she said
She urged Ugandan Business to harness the opportunities presented by the Oil and Gas sector and accordingly build capacity to participate not only in the oil and gas sector but also in the other sectors of the economy.
“I implore you to build capacity for both employment and supply of goods and services, get accredited, enter into Joint Ventures with International Oil Companies (IOCs), Network in order to enhance their benefits from the sector” she said
While giving a keynote address the Permanent Secretary, Ministry of Finance, Planning and national Development, Ramathan Ggoobi, said that government is benefiting from the oil and gas sector in terms of tax revenue with indirect benefit to Ugandans in procurement of local goods and services.
“Government has benefited from Tax Revenue from the Petroleum sector. According to the PAU’s Upstream Benefits report for the period 2017 to 2019, the direct benefits to the Government in form of Tax revenues were Ugx 212.7 bn and Non-Tax Revenue (NTR) of Ugx 22.1 bn while the indirect benefits to Ugandan Nationals was realized in form of; Procurement of locally produced goods and services Ugx 161.2 bn, Employment of 247 Ugandans earning salaries amounting to Ugx 85.6bn, Training of Ugandan Nationals in the private sector, Government and in the Oil Companies costing Ugx 12.9bn and, Social corporate responsibility engagements costing Ugx 0.76 bn” he said
He added that the government is pursuing the establishment of the Local Content Fund to support local suppliers and financing Oil and Gas projects to ensure the first oil in 2025 in a bid to resolve the challenges facing Ugandan suppliers in the sector; including access to finance, infrastructure, high-quality standards of the International Oil Companies (IOCs), business knowledge, knowledge and skills gaps based on internationally accredited Oil and Gas training institutions among others.
The Executive Director, Petroleum Authority Uganda (PAU) Ernest Rubondo highlighted that there is an increase in the country’s oil and gas sector and that there an enormous increase in investment, employment, and opportunities for the provision of goods and services, in the country as indicated by the testimonies from the different companies that are supplying and providing services in the sub-sector.
He added that the investment in the oil and gas sub-sector has continued to grow over the years and that it’s expected to continue to grow this year.
“Investment in the country’s oil and gas sector grew from US$ 180 million in 2020 to US$ 500 million in 2021 and is projected to grow to US$ 3 billion this year. During 2020, Ugandan companies were awarded contracts worth US$ 10.7 million in the country’s oil and gas sector. In 2021, the value of contracts awarded to Ugandan companies in the sector increased to US$ 200 million, an increase of almost 20 times. The value of contracts to be awarded to Ugandan companies during this year 2022 is projected to be in excess of US$ 1 billion, five times the value last year” he said.
The Executive Director Equity Bank, Anthony Kituuka pictured above said that Equity Bank is ready to play our part to support the sector adding that though here money can be found customers need to be ready to receive the money.
"Money can be availed but the question is, are those who want to supply the oil and gas sector ready to take it? This makes the banks hedge their risks hence the facility being costly" he said
Anthony added that Equity has cover up both the social and economic sectors of the country by introducing agency banking even far deep in the remote areas to ease financial service provision in the country.
