Assessing the Role of the Petroleum Authority Of Uganda In Monitoring, Evaluation and Implementation of Local Content in Uganda’s Petroleum Sector

Abstract

Local content in the petroleum sector has been a marked feature of the 21St century with many developing countries such as Uganda embracing it. The drive for local content has been mainly been as a result of Ugandans’ need to benefit from the oil and gas industry. This research therefore focused on local content in relation to the role of Petroleum authority of Uganda (PAU) that is implementing, monitoring local content within the Petroleum sector. Specific objectives included: identifying the laws in place that give the PAU its mandate and assessing their effectiveness, highlighting the gaps in these laws and regulations, and making recommendations on what can be improved. The study revealed that a strong institutional framework is necessary if Uganda is to achieve the benefits of its extractive industry. The study also showed that Uganda is a signatory to a number of international trade agreements that are in direct conflict with its local content laws, regulations and policies. This has created problems where it comes to strict implementation. Although the oil industry in Uganda is still in its nascent state, a lot of progress has been made in building a legal and institutional framework in preparation for the ‘first Oil’. Although faced with many challenges, Uganda has tried to maneuver through the murky waters of this very delicate and sensitive industry, to ensure that its citizens shall benefit from the same, and at the same time ensuring as a country, Uganda shall not be plagued by the proverbial resource curse. The research showed the various challenges that are still plaguing Uganda. The researcher found that the high cost for licenses are still affecting local oil companies. These high prices make it hard for the Ugandan companies to take part in. Additionally, the researcher found that there are stringent restrictions and measures that make it difficult for Ugandan companies to enter into joint ventures with international companies. Volatility of commodity prices, long term economic booms and bursts, and the unpredictability of resource revenue and some of the other challenges that were discovered. Lastly, there are some social concerns in employment in the oil sector like nepotism, tribal favoritism and corruption. To remedy these challenges, there is need to strengthen legislation to increase local employment and skill development; promote sustainable domestic production linkages through policy interventions; establish enterprise development and vocational training centers; increased access to finance by Local Small and Medium Scale Enterprises and partnership among stakeholders for local content development.