Parliament passed the National Local Content Bill 2022 intended to foster the promotion of local content in all sectors except oil, gas and petroleum.
Among other things, the bill seeks to impose local content obligations on a person using public funds or using Uganda’s natural resources or carrying out any activity requiring a license to give priority to Ugandan citizens and resident-owned businesses. to citizens in public procurement.
Among them, Section 4 of the Bill mandates a local content entity to give preference to goods made in Uganda as well as services provided by my Ugandan entities.
The bill was passed on Tuesday, September 06, 2022 during a plenary session chaired by President Anita Among, following a request from the President to reconsider certain clauses of the bill passed by the 10th Legislature.
“The Bill conflicts with the East African Monetary Union. Under Article 13 of the Customs Union Protocol, the [East African Community] The EAC Partner States have agreed to remove all existing non-tariff barriers to trade and not to impose any new ones,” President Yoweri Museveni said in his letter to the President.
The president also expressed reservations about the creation of a local content department under the Ministry of Finance, Planning and Economic Development, in an effort to implement the law.
“It is not possible for one department to approve bidders’ local content plans, for each individual purchase for the entire country,” the president added in his letter.
The Chairman of the Finance, Planning and Economic Development Committee, Hon. Keefa Kiwanuka, said the oil and gas sector should be excluded as it is unique in characterizing a long no-profit investment that involves international players.
He added that the law governing the oil and gas sector recognizes this and includes a local content provision.
“The government has entered into contracts with some companies in the sector using the existing legal regime and therefore deviating from it may lead us to sanctions,” Kiwanuka pointed out.
Parliament further assigned responsibility for compliance with the Local Content Act to the Department of Public Procurement Policy and Management under the Ministry of Finance.
The Minister of State for Finance, Planning and Economic Development (Planning) Hon. Henry Musasizi, moved an amendment that was passed by the House on the role of developing and implementing local content plans.
This application of local content has been left to the various procurement and disposal units under Ministries, Departments and Agencies to ensure that the efficiency of the procurement process is not compromised.
Dokolo Woman MP, Hon. Cecilia Ogwal, in support of the above, argued that the evaluation of the entire procurement system should be subject to local content.
“This is a broader issue that should also focus on recruiting staff beyond just goods and services, as some companies are not recruiting locals at all,” she noted.
MPs agreed that the government is mainstreaming cooperative development into its local content promotion strategy and Buy Uganda Build Uganda (BUBU) policy.
Hon. Patrick Nsamba (MP for Kassanda County North), who introduced the bill, said it will ensure Ugandan products are consumed and local businesses are involved in government procurement.
Distributed by APO Group on behalf of the Parliament of the Republic of Uganda.