Boost private sector to maximize oil and gas benefits, World Bank tells government

Private Sector UgandaIn a recently completed World Bank study  one of the key messages that the world bank sends out to  Uganda Oil and Gas industry stakeholders is to build the country’s private sector.

The study titled: “Leveraging Oil and Gas Industry for the Development of a Competitive Private Sector in Uganda” emphasizes that Uganda’s private sector can benefit greatly from the oil industry through supplying goods and services to the sector if it is well supported and grounded.

“Oil discovery in Uganda offers immense potential to stimulate private sector development and capitalize on opportunities for local suppliers to integrate with oil and gas supply chains.” Reads a press statement from the World Bank that Uganda Oil has seen.

The World Bank is engaged in the oil sector through a number of interventions, including the Albertine Sustainable Development Project ($145million), the proposed Skills Development Project ($100million), and the Competitiveness and Enterprise Development Project ($100million).

Sajjad Shah, Acting Country Manager, World Bank Uganda, says the discovery of oil resources offers a unique opportunity to develop the Ugandan economy because he believes oil revenues can be used to finance priority domestic investments crucial for diversified growth.

He says “Even before oil production commences and oil revenues start coming in, local enterprises can participate in supplying the industry and start growing their business and the national economy in general”.

Whereas creating favorable conditions for local businesses seeking to supply the oil industry is a key recommendation from the study, the study focuses specifically on food supply in Albertine region as a case study and demonstrates how linkages can be developed between smallholder farmers and oil camps.

According to Valeriya Goffe, Finance and Private Sector Development Specialist at the World Bank and the Task Team Leader for the study, there are good examples to follow in the Albertine Region, like the NGO Traidlinks in Hoima district, which has helped local farmers seize opportunities coming from the oil development by supplying fresh fruits and vegetables to the oil camps. She suggests that similar initiatives should be set up in other districts to benefit more farmers.

“The report also discusses alternative approaches, including having large scale investors establish operations to produce food demanded by oil camps and use smallholders as out-growers or contract farmers,” Goffe reveals.

However, Fred Kabanda, Principal Geologist and Head Regulatory Unit, Petroleum Exploration and Production Department, Ministry of Energy and Mineral Development believes effective implementation of the National Content Policy will be a prerequisite if Uganda is to capitalize on the potential for economic development through integration of local suppliers in the oil and gas industry.

“There is a need to fast-track the development of skills and expertise and ensure national participation in the sector for which the National Content Policy provides the key framework,”

Since Uganda is now at the final stages of the development of National Content Policy for the petroleum sector, the study is timely as it will provide a number of initiatives, both in the government and private sector side, seeking to provide support for national content development.

The report also highlights the importance of ensuring co-existence between oil and tourism at Murchison Falls National Park. The Park attracts the largest number of visitors among all national parks in Uganda, while also having large oil reserves beneath it.

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