SMEs struggling to win oil and gas contracts

Small and Medium Enterprises (SMEs) are struggling to win contracts to supply goods and services in the lucrative oil and gas sector.

Part of the reason is that many of them lack adequate funding and have limited expertise; according to experts at the two days Stanbic Bank Uganda enterprise conference, which concluded last week in Kampala.

Stanbic Bank Uganda Chief executive officer Patrick Mweheire, says though government has given priority to Ugandan companies for consideration in the oil and gas contracts, SMEs need support to compete for these lucrative business ventures.

“Over 150,000 SMEs exist in Uganda, where out of 100 enterprises that start business, less than 10 per cent live beyond their 3rd birthday”, said Mweheire, adding that it’s against this background that Stanbic Bank Uganda launched a “Stanbic Incubator” in February 2018 to train SMEs on Managerial and Financial literacy, to enable them access bank loans.

Emma Nahayo Mugizi, Petroleum Authority of Uganda senior corporate affairs officer encouraged SMEs to register with the National Suppliers Database come 1st September, if they are to enjoy selection criteria for the supply of goods and services in the oil and gas sector.

She said the first batch of companies and individuals vying for these contracts have already registered with the National Suppliers Database which closed at the end of March 2018.

She however, encouraged SMEs that face financial and expertise or experience constraints to partners with foreign companies to succeed in acquiring these contracts.

“There is no way you can be granted a contract to participate in waste management when you have never done so in your previous experience, which is why I encourage SMEs to partner with foreign companies who have a wide experience in the business”, she said.

She further warned SMEs; that the National Suppliers Database does not qualify them to win contract awards.

“It’s a legal requirement to be used by all buyers and sellers of goods and services in the oil and gas sector”, she added.

Stanbic Bank Uganda executive director Kevin Wingfield called upon SMEs to become sustainable, saying the “Stanbic incubator”, is so far training 16 SMEs in the oil and gas sector, to grow and survive beyond the vulnerable initial stage of development  and become long term sustainable businesses.

The conference organised under the theme; “Building sustainable Uganda through Business”, was attended by major Ugandan SMEs and  big companies.

They include; Veritas Investment Ltd, Longi new enegy, Macos Uganda, Toyota Uganda, Uganda Breweries Ltd, Pepsi and MTN Uganda among others.

By Ambrose Gahene