$8b USD Oil money to be retained in Ugandan economy through local sector linkages

At least $8billion USD is expected to be retained in the Ugandan economy from linkages between the different sectors as a value from the oil and gas projects in what has been termed as the national content.

As Uganda’s oil and gas sector moves towards a sustainable future, national content is fundamental to shaping the future.

National content is a concept that seeks to define the value that oil and gas will bring to the national economy beyond the direct benefits and revenues generated by the industry.

It is a mechanism that Governments use to create sustainable and inclusive economic growth.

Speaking at the 8th annual Oil and Gas Convention at Serena Hotel on Monday, Estella Karuhanga, the National content manager of Mota-Engil Uganda said there is potential for local content efforts to add mutually beneficial value however companies may need to partner to enhance their capabilities as the oil and gas sector is a capital-intensive business.

“Projects can create shared value by generating and growing economic opportunities related to their workforce, local supply chain and surrounding communities in ways that also support their bottom line. Our national content strategy is aimed at maximizing the use of Ugandan expertise, goods and services,” she said.

Total contracted Mota-Engil Uganda, a subsidiary of Portugal-based construction group Mota-Engil, to handle the initial works at its Tilenga project.

The project is in the Buliisa and Nwoya districts of Uganda forms part of the most significant investment programme seen in Uganda in the energy sector and comprises oil exploration, a crude oil processing plant, underground pipelines, infrastructure and more.

Uganda's legislation places particular emphasis on national content and this is to optimize the localization of oil and gas economic opportunities.

Speaking at the same convention, Ernest Rubondo, the Executive Director of the Petroleum Authority of Uganda revealed that at least 51 per cent of the contracts approved by the Authority in the last three months have gone to Ugandan companies.

“In the period since January to end of month, petroleum authority has approved contracts worth $1billion USD in 3months, that’s a total of 96 contracts since 2021, out of the 46 (51%) contracts have gone to Ugandan companies,” Rubondo said.

“In addition to the money that Ugandans will get as a result of national content, there will be an additional $8bUSD into this economy as a result of the linkages between the different sectors of the economy,” he added.

Meanwhile, the government is finalizing plans to start a national content fund to skill and support local enterprises.