Uganda: Oil Jobs - Government to Establish Petroleum Skills Development Fund

At least $ 44.7m will be injected in the fund in the next 8 years to skill Ugandans for Oil jobs.

In order to increase the number of Ugandans with qualifications and skills to take up jobs in the oil and gas sub-sector, government plans to establish a fund - Petroleum Skills Development Fund. The fund is expected to finance trainings and skilling of Ugandans to match the skills and certifications required in the oil and gas industry.

The proposal to establish a skills development fund for the oil sub-sector is contained in the Workforce Skills Development Strategy and Plan for the oil and gas sub-sector in Uganda that was launched recently.

The aim of the workforce skills development strategy and plan is meant is to maximise the quantity and quality of employment opportunities for Ugandans in oil, gas and other related sectors.

According to the workforce skills development plan, the oil and gas sub-sector is expected to create at least 161,700 jobs (at peak during the construction phase of the entire planned infrastructure for the up-stream and mid-stream developments). Of these, 14,000 will be direct, 42,700 indirect and 105,000 induced jobs. Once the construction phase will be completed, there will be limited opportunities since the project(s) shall not require many people to run it. However, most Ugandans are left out in jobs due to lack of requisite skills, qualifications and certifications.

"The main impediment to employing a larger share of Ugandans in the petroleum sector is a shortage of personnel with adequate education and training coupled with inadequate related work experience. The main thrust of the Ugandan national content effort shall therefore be directed at building the capabilities of Ugandan personnel for contributing effectively to petroleum operations," strategy paper reads in part.

A total of $ 44.7 million dollars (Approximately Shs 163 bn) will be injected into the fund in the next eight years (up to 2025). "The Petroleum Skills Development Fund will have its funds replenished by allocating a percentage of revenue generated by international oil companies (IOCs) and Engineering Procurement and Construction (EPC) contractors and/or sub-contractors to dedicated training activities each year," the strategy paper reads.

Government also plans to levy a fee of 2% payable on the total gross emoluments paid to international employees and the total gross payments made in respect of labour-only contractors, to raise money for the fund.

"In its first five years of operation, the Petroleum Skills Development Fund will be supplemented by a straightforward tax on foreign workers. Such a levy would involve a single one-off payment of $10,000 imposed on all oil & gas employers for every foreign worker brought into Uganda who is not a national of the East African Community", the strategy reads.

According to the skills development strategy, the Ministry of Finance working in partnership with the Ministry of Energy and Mineral Development will have responsibility for designing and overseeing the mechanism for verifying and collecting these funds.

The Petroleum Skills Development Fund will be overseen by the National Content Steering Committee which will constitute a separate sub-committee under the leadership of an independent Chair respected by both Government and the international oil industry.

The Petroleum Skills Development Fund will have its own dedicated bank account to maintain a clear link between revenues and funds raised from employers and funds allocated to training activities. Without this clear link, international experience shows that employers will lose confidence that funds are being utilised effectively to address their specific skills' needs.

In addition to the funds raised through the payroll training levy and one-off tax on foreign workers, the Petroleum Skills Development Fund will also be open to contributions from development partners or other agencies with an interest in pooling resources and contributing towards Oil & Gas skills development in Uganda.

By Edward Ssekika

Edited by Flavia Nalubega

Edited by Didas Muhumuza

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