In 1970s, current Minister of Finance, Planning and Economic Development Matia Kasaija was a budding farmer rearing about 2000 goats he dearly loved. The farmer in him decided that he should get a market and cash in on the animals.
However that market couldn’t be got in Uganda. A friend advised him that in Saudi Arabia, goats are on high demand. They worked around the clock to secure the market in the Arab world. Luckily they were successful. The buyers in Saudi Arabia however wanted about 20, 000 goats.
Kasaija, who then was a civil servant, was overwhelmed by the demand, the goats on his farm were insufficient and would be depleted if sold all his animals. He was not about to sell all his goats. He had to find a way.
Together with his friend, they traversed the northern and eastern part of the country to get goats they would take to Saudi Arabia were the market was assured. From his own farm he surrendered 1500 goats and from their countrywide tour managed to assemble about 10000 goats in total.
They procured travel documents and in no time they landed in Saudi Arabia. However what awaited for Kasaija and his partner was a shocker. The buyer rejected the goats due to their poor quality, age and breed.
According to Kasaija, the buyer wanted young goats of about two to three months (those without horns), exotic breed and of a certain quality different from what Kasaija transported thousands of miles from his native Uganda to the Arab world.
Apparently Kasaija and his crony transported long horned old goats of what Ugandans call local breed. It was a heart breaking loss. Kasaija learned his lessons the hard way and this is perhaps why he stuck to working with government, joined politics and is now a political leader and minister but not a businessman.
Kasaija’s story resonates well with the nascent oil and gas industry were Ugandans are eager to cash in by providing goods and services. Like Kasaija, many Ugandans intending to work within the oil industry are not fully aware of the demands of the industry especially the standards, type of goods and services preferred by international oil companies and their associates.
Another story is told by Tony Okao Otoa the head of local content at Total E&P of how a farmer in Buliisa approached the oil Exploration Company with an idea to provide them with beef.
Because Total wants to give opportunities to local farmers, the oil company offered to look at the facilities under which the farmer would use to slaughter the animals and deliver the meat. To their astonishment, the farmer had no abattoir, no truck to deliver the meat, basically the farmer fall short of the basic hygienic demands to work in the oil industry.
This lack of information about what is demanded by the oil industry predict doom for local companies and individuals intending to work in the moneyed industry. Already local companies are complaining that they are losing basic business deals to foreign companies.
This is not only bad for local companies aspiring to work in the oil industry but the Ugandan economy. With this concern, oil companies are working with government to uplift local companies to meet the standards by providing information, capacity building and putting in proper communication channels.
Total’s Otoa says it is important for Ugandans to get ready now by training man power because this is not an industry that will have to wait for anyone once it takes off. He says Ugandans can learn from countries that have been through this stage. He advises that the oil business is for the long term and for people who dream big.
As Uganda nears production stage, oil companies operating in a joint venture are willing to help local companies build capacity. Abdul Kibuuka, public affairs and national content manager at Tullow Oil Uganda says some companies with whom they have dealt with are doing a good job.
He however says others local companies lack the required integrity to work in theindustry. He explains that they talk to such companies that fall short of the requirements while drastic measures are taken against those who deliberately default the practices of the industry.
“There are local companies that are flagships for local content. They have grown with the industry and upgraded their machines.” Kibuuka told an oil and gas convention in Kampala in April, 2016. He revealed that for a local company to get business must prove compliance including meeting statutory requirements like remitting NSSF savings and paying taxes to URA.
Emmanuel Mugarura, the Chief Executive Officer of the Association of Uganda Oil and Gas Service Providers says oil companies have helped them to move forward describing the industry as capital intensive and that some local companies wouldn’t have managed without the help of oil companies.
Jessica Kyeyune, the national content manager at CNOOC, one of the oil companies operating in Uganda, faults Ugandans in general who over the years have shown laxity to uphold standards.
“Look at the buildings falling every day, the substandard roads constructed. If only Uganda makes observing standards mandatory.” Kyeyune ponders. Tullow’s Kibuuka, speaking in support of Kyeyune, says standards required are basic only that the oil industry is stringent to compliance.
Asked if local companies are ready, Mugarura gives a two edged answer of yes and no saying they need government’s support to do training and build capacity. Finance minister Kasaija has pledged to support efforts to build local capacity.
The minister however lambasted Ugandans for being disorganized counseling that it is time to join hands and work together. “It will be a shame if foreign companies take everything away. People are sleeping but must wake up. My ministry is ready to listen to any proposal and suggestions.” the minister explained in an interview.
About $2bn has been invested in Uganda to date by joint venture partners and other exploration companies since 2014 and about $8 -10bn estimated investment is required through the phase of production. Uganda boosts of 6.5 billion barrels of commercially viable crude oil buried in the earth of the Albertine grabben of which 1.2 to1.7bn Barrels is estimated to recoverable resources.
Following an Industry Baseline Survey undertaken by the joint venture partners, 15,000 estimated number of direct jobs will be created by the project. Recently Uganda announced it will construct and export her crude oil through the Indian coast to international market using a 1,443 km Length of crude export pipeline via Tanzania port of Tanga.
Another pipeline from Hoima to Kampala will be constructed to bring refined products to Kampala and distributed to local market. Other infrastructure projects to be undertaken include an airport, roads, hotels, hospitals among other. All these present business opportunities for local companies and people.