Local artisans in Pakwach district at a welding plant. Limited knowledge is hindering participation in the sector. Photos by Arnest Tumwesige
By Simon Wokorach
Gulu: Data from the Uganda National Suppliers’ Database show that only a handful of companies benefitting from businesses in the oil and gas sector are from the oil host districts.
The qualified supplier report for 2023 showed that by June 8, 2024, there were 3,042, local and foreign companies approved to transact business with the government in the oil and gas sector with majority being outside the oil districts.
The local companies approved have shown interest in offering security services, supply of foods, accommodation facilities, skill development, quarry works, research, and communication services, while the foreign companies are offering consultancy services, supplying hardware, manufacturing, capacity building, explorations, and environment and climate change research.
China has the highest number of companies registered both as state-owned, groups of firms or as individuals, followed by the United Kingdom, South Africa, and Egypt.
Although the East African Crude Oil Pipeline (EACOP) project will be implemented by Uganda and Tanzania, none of the companies is from Tanzania.
In the Bunyoro sub-region, only four local companies are registered for research services, social works, skill development, education support activities, and support in mining and quarrying. Pakwach district which jointly hosts the Tilenga Project area with Buliisa has only two registered companies, and Nwoya has two.
In Acholi sub-region, only Bomah Hotel Limited has the legal mandate to provide accommodation facilities, food, and conference facilities in partnership with the PAU and Uganda National Oil Company (UNOC).
Concealing information crippling development
Amos John Okot, the Agago North Member of Parliament, argued that lack of information sharing by the government regarding the oil and gas sector is preventing the local communities from maximizing the opportunities in the sector.
Okot appealed to the government to share information regarding the mineral potentials from the region with the locals to avoid contention and mistrust.
According to Prof. Morris Ogenga Latigo, a former Member of Parliament, the oil deposits in Nwoya district are worth 2.5 billion barrels constituting about 60% of the oil discovered in the Tilenga and King-Fisher Oil Projects.
“We know of a huge oil deposit in Nwoya, but we wonder why the government hasn’t recognized this and they aren’t open to us. Everything about the oil here is secret,” Ogenga said.
Ogenga argued that if the government had recognized Nwoya as the biggest catchment area with oil deposits, oil central processing facilities would have been established within Nwoya district. Instead, other districts in the Albertine region have largely benefited from oil projects.
“Look at the roads in those areas. Look at the International Airport and other infrastructure developments in those districts,” he added.
Gov’t explains on sharing information
Ruth Nankabirwa, the Minister for Energy and Mineral Development, noted that the government was skeptical about sharing information regarding oil and mineral developments to avoid land grabbing.
Nankabirwa noted that when the government shared information regarding oil in the Bunyoro region, the local communities were disposed of as people from outside bought lands in the region.
“Those who accessed the information went and grabbed lands in Bunyoro from the locals and they are the ones who got compensated but we wanted to avoid that in this area,” Minister Nankabirwa.
She added; ”You will see an influx of people coming here to buy lands in those areas with mineral developments if we don’t do that.”
Although Nankabirwa acknowledged that there is a huge oil deposit in Nwoya, she said that the district has not seen infrastructural development translating from the oil which shall be put on affirmative action later.
Uganda discovered oil and gas in 2006 worth 6.5 billion barrels and the first oil production in the Tilenga Project is expected to start in July 2025.
The East Africa Crude Oil Pipeline Project is estimated to realize between USD 350 to USD 400 for the Country from 15% equity shareholding.
The refinery is expected to process 60,000 barrels of crude oil into finished products including petroleum gas.
The oil and energy project is expected to improve Uganda’s balance of payments by reducing the import bill of petroleum which currently stands at 20 billion shillings annually.
UNOC implores local investors
Christine Tumusiime, the Chief Resource Officer at UNOC, urged local companies from Northern Uganda to register their services with the government.
The government is mandated to collaborate with indigenous people in the supply chain to develop the oil and gas sector but can only transact such business with registered companies or individuals.
Through PAU, the National Suppliers’ Database is meant to register entities or individuals interested in providing goods, works, and services in the oil and gas sector.
In February 2022, PAU approved contracts worth USD 7.16 b in the ongoing oil and gas project development deals.
This saw a significant increase in companies expressing interest in participating but companies from the oil host districts are least on the database.
Out of 113 companies that PAU received in March 2024, up to 97 were Ugandan companies based in Kampala, while 16 were foreign companies.
Currently, there are 3,042 qualified companies registered in the database. Although 2,389 are Ugandan companies, only seven are from both Bunyoro and Acholi Sub Regions, while 612 are foreign companies.
The sector employs 13,067 individuals, with Ugandans constituting 90% of the workforce, the report shows.
Tumusiime noted that the government has rolled out an empowerment program for local suppliers to register their services.
The empowerment program targets individuals and local companies for registration on the National Suppliers’ Database so that they are not left out of the trade deals.
Through an online registration portal, an individual or a company is required to provide proof of legal status, certificate of incorporation, information about shareholding, and management of the company.
Before approval, additional information regarding good market conduct is sought and scrutinized, inspection on blacklisting and proof of tax compliance with the Uganda Revenue Authority.
“Our leaders should mobilize the people from this region to register their businesses with the government because only those who have done so shall directly trade with us,” Tumusiime said.
