The Inclusion of Local Content Requirements in Procurement Requirements of Uganda’s Oil and Gas Contracts.

Abstract

Most oil rich countries are usually known for their expanded economic development. There is a growing interest globally in enhancing the opportunities for locally based businesses to participate in the supply chains of major resource projects. Several companies, especially in the oil and gas sectors, have adopted policies and standards aimed explicitly increasing ‘local procurement.’ This was majorly because most of these countries want to avoid the resource curse. The benefits of supply chain participation have become particularly apparent in Indigenous communities. There are now a number of agreements between companies and indigenous groups that are aimed at enabling greater indigenous economic participation. Such agreements also include commitments to support the development of Indigenous-owned enterprises. Encouragement of linkage evolution is crucial to increase the contribution of the petroleum sector to the macro economy. Linkage growth can speed up technology relocation transfer and profit-making branch outs. But even these considerations will have only slightest degree of positive effects if the possibility for elite capture and corruption is not dealt with through the injection of transparency and accountability considerations taken into the native contentment design and execution. In Uganda, mystery exists as interventions put in place to boost capacity of local firms to supply local content are not yielding. Existing research pointing to local content indicates that there is opportunity for SMEs to supply requirements for the petroleum industry in Uganda. Research reveals the presence of suboptimal exploitation of such opportunities by local SMEs. Therefore, this dissertation explored the capacity of Uganda’s local firms and the regulatory environment to ascertain the critical factors affecting Local content development with regard to their exploitation of business opportunities in the Oil and Gas Industry.