Last week, Parliament passed the National Local Content Bill 2019, which imposes local content obligations on all government contracts, licenses and public money to prioritize Ugandan goods, citizens and residents, and companies among other localization measures.
When assented to by the President, firms would be required to employ at least 100 per cent Ugandans for unskilled labour, and 60 per cent for skilled labour. According to the bill, a foreigner can only be employed if and only if there’s no Ugandan who meets the requirements for the job following clearance from a government department.
The bill which was tabled by Kassanda North MP, Patrick Nsamba Oshabe, seeks to boost the local economy, foster domestic growth and curb unemployment through placing strong measures against employing foreigners especially in public works like construction, alteration, installations, or repair work done under contract and paid out of public funds.
The National Local Content Bill, 2019 will apply to all sectors except the oil and gas sector as it is the only sector which already has laws made to cater to it.
The other sectors that are to benefit from this bill include but not limited to energy, mining, construction, tourism, investment licenses, public works, subcontracts and projects implemented through borrowed money.
The National Local Content Bill 2019 covers a large number of sectors within Uganda
On the other hand, the Public Procurement and Disposal of Public Assets Act, 2003 provides for some reservation schemes and guidelines on local content. However, according to the bill, these were not enough since the scope was limited and not legally binding.
The bill will become law once assented to by President Yoweri Museveni and there are a number of reasons as to why it may come to pass.
Uganda has been seeking to improve import substitution as one of the drivers for economic growth. The bill supports the “Buy Uganda Build Uganda (BUBU) Policy” which seeks to boost local production and consumption of domestically manufactured products.
According to the Speaker of Parliament, Rebecca Kadaga, the bill sets Uganda on a path to import substitution. Import substitution has been a focal point for President Museveni as he has emphasized a lot on it during the Covid-19 lockdown.
The local content bill has its benefits and here’s why
1. Allows for transfer of skills and technology
The bill also makes provision for transfer of skills and technology to Ugandans and government during the execution of activities where public funds are used, for instance, in the extractive industries, donor and loan funded projects, and that for, the bill stipulates that every employment position held by a non-citizen shall be deputized by a Ugandan citizen. This ensures that there will be transfer skills to Uganda’s labour force.
2. Creates employment opportunities for Ugandans
Furthermore, the policy enhances employment creation for Ugandans. The local content policy has the potential to expand and improve employment, including for women, youth, the rural poor and the informal sector, by increasing domestic demand for unprocessed agricultural commodities from agro-processors, improving local production of materials and products and supporting local business.
3. Encourages industrialization
The policy will also enhance industrial development in Uganda by encouraging innovations and inventions. Companies and entrepreneurs will invest more in Research and Development (R&D) so as to gather information on how they will develop and produce goods and services of the highest quality.
4. Economic diversification
Diversification of the economy is another reward Uganda will attain as a result of implementing the Local Content Bill. For instance, buildings require a variety of materials and components in their construction.
This diversity will be used to develop a wide range of small enterprises all linked to construction for example doors and windows, tiles, paint, roofing, bricks, and furniture and fittings manufacturing ventures. This will not only boost employment opportunities but also increase the tax base of the government.
Author: Kirembwe Andrew
Andrew is a young, enthusiastic, and self motivated individual who loves sports and enjoys writing and sharing informative content about business, tech, lifestyle and entertainment. He is also an entrepreneur by trade.