MP to introduce Local Content Bill

Parliament this week, granted Leave to Hon. Patrick Nsamba (Kasanda North) to introduce a Private Members' Bill for an Act titled the Local Content Bill, 2017.

The Local Content Bill, 2017 seeks to provide for the establishment of a national Local Content Committee, the maximization of value-addition and job creation through the use of local expertise; goods and services; businesses and financing in all undertakings where public funds are used; or where the undertaking is a licensable activity; the development of local content plans and the supervision, coordination, monitoring and implementation of local content.

"While delivering his first State-of-the-Nation Address to the Tenth Parliament, the President, H.E. Yoweri Kaguta used the term 'haemorrhage' while referring to the donations this country gives to different countries from where goods and services are imported goods and services. In his wisdom, the President wished and advised that this 'haemorrhage' be dealt with if this country is to attain the much cherished middle-incomes status by 2020," Nsamba said.

Nsamba said that through procurement of goods and services, our Government has over the years been donating dollars by engaging foreign companies in almost all procurements from constructing drainage channels, mere roundabouts, constructing Government buildings to major roads and power dams.

"Members of the Tenth Parliament have often insisted that Government should endeavour to take into consideration local content provisions while negotiating loans, implementing projects and negotiating with investors, so that Ugandans can benefit from the transfer of skills and technology as well as gain employment," Nsamba added.

Nsamba said that since Government has been slow or maybe had no intention of bringing a local content law for Parliament's consideration, the movers of this Bill - who are seeking leave - were convinced that Ugandans needed this law sooner rather than later.

"Most of the major projects involving large chunks of money in Uganda are awarded to foreign companies. For purposes of this motion, I worked with the Department of Research; and we had a review of the major contracts awarded in this country in just one sector of transport during the last five years," Nsamba said, adding that, "The total value of money committed for just 38 contracts above Ushs 50 billion is around Ushs 15.9 trillion. Out of this, Ushs 3.6 trillion is in loans while grants are about Ushs 12.3 trillion."

Nsamba said that he had discovered that under grants and loans, 91 per cent of contracts were given to Chinese companies -equivalent to Ushs 11.2 trillion. Israeli companies get about Ushs 444 billion (about four per cent); Portuguese companies get two per cent, Japanese and South Korean companies get four per cent and no Ugandan company is given a contract under grants and loans.

Hon. Muyanja Mbabali (Bukoto South) who seconded the Motion said that the Local Content Bill, 2017 will have the capacity to build our local companies; widen the tax base of the government of Uganda; and create more jobs.

"Foreign companies are not creating jobs for indigenous people; instead they take them on as casual labourers. With this law, Uganda will have created a middle class of entrepreneurs which will be the engine for Uganda to attain a middle class status come 2020," Mbabali said.

Hon. Herbert Ariko (Soroti Municipality) added that the Local Content Bill will focus on projects, transactions, as well as business engagements within the auspices of Uganda as a nation.

"We know that most of the companies, entrepreneurs and investors who come into the country usually do not plough a substantial amount of their profits within Uganda. However, with a regulatory framework which helps us check into the participation of foreign investors in the play of our economy, the country can be able to evaluate how much of the earnings and profits gained out of such investments or contracts are actually ploughed back into Uganda as a country," Ariko said.

The Prime Minister, Rt. Hon. Ruhankana Rugunda, said that the government considered the Bill significant and were willing to work with the Members seeking leave in order for it to materialise.

Source: Parliament of Uganda

MP to introduce Local Content Bill

Parliament this week, granted Leave to Hon. Patrick Nsamba (Kasanda North) to introduce a Private Members' Bill for an Act titled the Local Content Bill, 2017.

The Local Content Bill, 2017 seeks to provide for the establishment of a national Local Content Committee, the maximization of value-addition and job creation through the use of local expertise; goods and services; businesses and financing in all undertakings where public funds are used; or where the undertaking is a licensable activity; the development of local content plans and the supervision, coordination, monitoring and implementation of local content.

"While delivering his first State-of-the-Nation Address to the Tenth Parliament, the President, H.E. Yoweri Kaguta used the term 'haemorrhage' while referring to the donations this country gives to different countries from where goods and services are imported goods and services. In his wisdom, the President wished and advised that this 'haemorrhage' be dealt with if this country is to attain the much cherished middle-incomes status by 2020," Nsamba said.

Nsamba said that through procurement of goods and services, our Government has over the years been donating dollars by engaging foreign companies in almost all procurements from constructing drainage channels, mere roundabouts, constructing Government buildings to major roads and power dams.

"Members of the Tenth Parliament have often insisted that Government should endeavour to take into consideration local content provisions while negotiating loans, implementing projects and negotiating with investors, so that Ugandans can benefit from the transfer of skills and technology as well as gain employment," Nsamba added.

Nsamba said that since Government has been slow or maybe had no intention of bringing a local content law for Parliament's consideration, the movers of this Bill - who are seeking leave - were convinced that Ugandans needed this law sooner rather than later.

"Most of the major projects involving large chunks of money in Uganda are awarded to foreign companies. For purposes of this motion, I worked with the Department of Research; and we had a review of the major contracts awarded in this country in just one sector of transport during the last five years," Nsamba said, adding that, "The total value of money committed for just 38 contracts above Ushs 50 billion is around Ushs 15.9 trillion. Out of this, Ushs 3.6 trillion is in loans while grants are about Ushs 12.3 trillion."

Nsamba said that he had discovered that under grants and loans, 91 per cent of contracts were given to Chinese companies -equivalent to Ushs 11.2 trillion. Israeli companies get about Ushs 444 billion (about four per cent); Portuguese companies get two per cent, Japanese and South Korean companies get four per cent and no Ugandan company is given a contract under grants and loans.

Hon. Muyanja Mbabali (Bukoto South) who seconded the Motion said that the Local Content Bill, 2017 will have the capacity to build our local companies; widen the tax base of the government of Uganda; and create more jobs.

"Foreign companies are not creating jobs for indigenous people; instead they take them on as casual labourers. With this law, Uganda will have created a middle class of entrepreneurs which will be the engine for Uganda to attain a middle class status come 2020," Mbabali said.

Hon. Herbert Ariko (Soroti Municipality) added that the Local Content Bill will focus on projects, transactions, as well as business engagements within the auspices of Uganda as a nation.

"We know that most of the companies, entrepreneurs and investors who come into the country usually do not plough a substantial amount of their profits within Uganda. However, with a regulatory framework which helps us check into the participation of foreign investors in the play of our economy, the country can be able to evaluate how much of the earnings and profits gained out of such investments or contracts are actually ploughed back into Uganda as a country," Ariko said.

The Prime Minister, Rt. Hon. Ruhankana Rugunda, said that the government considered the Bill significant and were willing to work with the Members seeking leave in order for it to materialise.

Source: Parliament of Uganda