SMEs told to beef up their skills to tap oil opportunities 

Current investments in Uganda’s oil and gas sector are creating mega opportunities for Ugandan businesses, especially micro, small and medium enterprises that are increasingly building their capabilities to respond to sector requirements.

Oil sector players in the government and private sector have urged SMEs to fill gaps in their service offerings to benefit from the sector.
Peter Kenneth Bintu, the enterprise development officer at the Petroleum Authority of Uganda, says SMEs must work with the leadership in their respective districts to tap into sector opportunities.

For instance, he said there are training, market, and related opportunities that are currently being offered to businesses across the oil and gas-affected districts. He said a total of 500 local enterprises are expected to have acquired training skills to supply goods and services in the oil and gas sector through a project being implemented by PAU, with a grant of $500,000 from the African Development Bank (AfDB).

The beneficiaries for this project are being chosen from across the 10 East African Crude Oil Pipeline districts. Currently, the project has trained 400 beneficiaries and is also doing business linkages and continuously empowering them to ensure the sustainability of lessons learned.

Launched in 2021 in Mubende district, the project is being implemented in collaboration with district leadership to ensure close monitoring of the enterprises that are trained.

The majority of the businesses engaged are in agriculture, accommodation and hospitality, logistics management, and more. John Walugembe, the executive director of the Federation of Small and Medium Enterprises, said their members are constantly being reminded of their duty to improve their capacity in corporate governance, recordkeeping, financial management, tax, and NSSF compliance if they are to partake in the oil and gas sector opportunity.

“We see many opportunities coming our way as more investments in the sector are being made ahead of first oil in 2025,” Walugembe said.

Tony Otoa, the chief executive of Stanbic Business Incubator Limited, also said that businesses need to formalise in order to attract contracts. He said filing returns, noting business resolutions, ensuring standards, and partnerships were instrumental in ensuring that Ugandan-owned SMEs win deals in the sector.

“If we do not embrace partnerships, then we will have foreign companies come here and take over these opportunities,” he said.

Otoa said that in the agriculture sector, SBIL has a model farm in Hoima, which has been used to train about 400 farmers on production and productivity in order to meet demand requirements from oil and gas sector players in the Albertine graben.

“Knowledge is power and it is important for Ugandan businesses to understand where opportunities are, to take advantage of them,” he said.

Martin Byaruhanga, the team leader of ESTEEM International Consultants, who is engaged in training SMEs in partnership with PAU and AfDB, said many of their beneficiaries have already signed memorandum of understanding documents with key sector players to guarantee them with opportunities of making money.

Speaking at the signing of MoUs between small and big businesses at the end of last month, Byaruhanga said, a total of 179 MoUs have so far been signed between micro and small companies with medium- sized companies to provide goods and services in the sector under the PAU-AfDB programme.

Enock Kasirabo Mushaija, the director of Kisirabo Holdings, a beneficiary of the business linkages training program from Mubende district, said the programme must continue so that other businesses benefit from it.

Humphrey Asiimwe, the chief executive officer of Uganda Chamber of Commerce and Industry (UCMP), said such programmes are critical in pushing forward the national content and community participation agenda in the oil and gas sector.

“As UCMP, we are happy to see these stories come up,” he said, “We remain resolute to providing avenues through which opportunities of this nature can be shared for the benefit of the sector and our economy,” he added.

Data from PAU as of the end of June this year indicates that a total of more than 14,000 Ugandans have been trained and certified in various oil and gas disciplines of welding, health and safety, and environment, heavy goods vehicles, and more.

In the same period, slightly more than 4,000 SMEs have been trained in key oil and gas business requirements. Over the last five years, according to PAU, $7.086bn has been approved for spending by the oil companies, and $1.762bn (25 per cent) of this is going to the Ugandan companies. Ahead of first oil in 2025, between $15bn and $20bn is expected to sink in the Ugandan economy.