In January, the Oil and Gas sector in Uganda launched oil drilling activities in the Kingfisher development area.
This came a year after the announcement of the Final investment decision (FID) in the East African Crude Oil Pipeline which was signed in February last year. The launch was a great step to the realization of oil production by 2025.
The jigsaw puzzle to all Ugandans now is how to brace themselves with the opportunities that come with this milestone ahead of other openings in the oil and gas sector.
Whereas the government expects to earn about $2.8 billion per annum (at an average oil price of US$ 107 per barrel) from oil activities, Ugandans stand to earn more from improved infrastructure, national content, employment opportunities, development of human capital and a wealth of business opportunities to supply goods and services to the sector.
For example, the development of the oil wells in western Uganda has seen the growth of infrastructure in the region including road infrastructure measuring approximately 700kms.
The development of the second international airport in Uganda and the upcoming $4 billion East African Crude Oil Pipe Line (EACOP) project which was licensed by the Ministry of Energy and given a construction license in January 2023.
So, while the country holds its breath for the next two years, Ugandans can take on the following to ready themselves for the immense opportunities; Invest in education and skills enhancement The oil and gas sector is still in dire need of skills and technical capacity in various areas such as engineering, logistics and supply chain management, administrative capabilities and other professional qualifications that will benefit the various players in the industry.
Ugandans can use this opportunity to enhance their skills and take up the opportunities when the time comes Invest in businesses and skills to supply goods and services Uganda has enacted national content requirements aimed at ensuring the participation of local enterprises in the oil and gas value supply chain.
To this effect, the government has earmarked the supply of 16 categories of goods and services and these have been exclusively reserved for Ugandan companies.
Reserved goods and services as a requirement of the law must be supplied by Ugandan companies. These include hotel and catering, foods and beverages, clearing and forwarding, transportation, office supplies, security, fuel supply, supply of locally available construction materials, civil works, communications and information technology services environment studies and impact assessment etc.
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In preparation for the business opportunities already available and those to come, Ugandans should embrace business registration and compliance. Businesses may be registered as business names or companies incorporated with URSB to formalize the business.
URA, URSB and KCCA under the tax payer registration and expansion program “TREP” project have set up various one-stop shops that Ugandans can utilize to register businesses, obtain a TINs and the necessary business licenses in 3 days. Enhance tax compliance One of the key requirements for the supply of goods or services is a Tax Clearance Certificate (TCC).
These are issued to businesses that are compliant with their tax filing and payment requirements. Ugandans interested in doing business with the oil and gas sector should educate themselves on basic compliance activities like filing returns, filing dates and payment of taxes to avoid missing out on tenders and bids owing to lack of a tax clearance certificate.
So as we count down to the year 2025, we call upon Ugandans to invest in reserved businesses, enhance their legal and tax compliance and position themselves better to benefit from the brown gold.
