18 May 2014

Uganda: Donors Seek to Boost Uganda Local Content

The World Bank is to support initiatives that will ensure that Ugandans fully participate in the oil and gas sector. Moustapha Ndiaye, the World Bank Uganda country manager, said full participation of Ugandans in the oil sector is the only way of maximising benefits for the country. He was speaking at the first roundtable dinner on national content at the Kampala Serena hotel recently.

Ndiaye said the World Bank would support Uganda to develop a local content policy that would inform a separate law on national content in the sector. Already, the World Bank has offered support to government to prepare a detailed local content study, which is expected to give an overview of what is needed in the industry.

"The World Bank is happy to support knowledge sharing among key stakeholders to inform the implementation of the national content policy of Uganda," he noted.

Uganda's oil industry is expected to be an even bigger attraction for capital. The country's oil asset is thought to be $150bn, according to figures from the ministry of Energy. To get to the production stage, the oil companies are expected to invest close to $12bn, with a number of Ugandans eyeing a share of this money.

The implementation of local content remains tricky, though. Shrewd foreign investors are suspected to skirt around regulations like company ownerships, where Uganda has called for a 48 per cent local joint venture stake, to partner with fronts. The definition of who or what company is local remains contentious.

Peter Lokeris, the minister of state for Mineral Development, noted that for a country to benefit from oil and gas resources, its nationals must be at the forefront of goods and service provision.

"The bulk of the money is in service provision. Government is doing all it can to build the capacity of Ugandans at all levels to tap this money. We appeal to our development partners and the private sector to continue supporting us," he said.

The event is the first of a series of roundtable dinners to be organised by the ministry of Energy and Mineral Development, the Royal Norwegian embassy and the World Bank to promote dialogue on national content in the oil industry.

Each dinner will feature an expert practitioner from another petroleum-producing nation, who will share knowledge of the design and implementation of national content policies. The discussions will contribute to the ongoing formulation of a national content policy and plan for the oil and gas sector in Uganda. Thorbjørn Gaustadsæther, the Norwegian ambassador to Uganda, said the roundtable dinner was timely as it scales up national participation.

"The translation of this policy into practice is key in ensuring Ugandan ownership and a sustainable management of the petroleum sector in Uganda. As such, this roundtable dinner is as timely as it is important in that it brings together all stakeholders for a harmonization of key objectives and way forward."

The ministry of Energy is developing a National Content Policy and Plan whose goal is to ensure that the exploitation of petroleum resources creates lasting values to the economy and people of Uganda. The policy is expected to be completed by June this year and thereafter tabled before cabinet for approval.

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