Ugandan companies offering Logistics and Engineering services have been advised to partners with International ones offering technical services in the oil and gas if they are to effectively exploit the business opportunities in the country’s nascent sector.
Experts in the sector urge that although business opportunities in the Oil and gas sector are abundant, many local companies may not take the opportunities due to technical, financial challenges, as well as lack of experience in executing business in the oil and gas sector.
The head of Oil and Gas at the dfcu Bank Harriet Kiwanuka said many Ugandan companies still lack the experience to execute projects to the standards of the oil companies thus the need to collaborate with Multinationals that can help them build their capacity in executing projects in the oil and gas sector.
“There are business opportunities in the country’s Oil and gas sector but the challenge is our local companies especially in the logistics and engineering are not yet ready to take over such opportunities. The reason is majority cannot afford due to financial constraints; others lack technical capacity to handle Oil and gas projects. That is why they need to partner with companies that have handled contracts in the oil and gas sector,” she advised
Kiwanuka made the remarks during a sensitization meeting organized by dfcu Bank in partnership with the National Logistics platform under Private Sector Foundation Uganda, Kampala City Traders Association and Uganda Manufacturers Association for Logistics supplies in the country.
The meeting at Hotel Africana, Kampala on November 13, aimed at sharing business opportunities available in the Oil and Gas sector to the local logistics companies in Uganda.
Locals to supply 40% of goods and services
During the meeting, the logistics suppliers were informed that government has ring-fenced about 40% of the total supplies of goods and services in the Oil and Gas sector to local companies.
However for them to exploit the opportunities, the local suppliers must meet international standards set by players in the Industry.
Key opportunities available to the local companies include supplying of construction inputs such as bricks pipes, catering services, medical, technical services especially in engineering, security and transport services, among others. But for the local companies to take over such opportunities, they must have enough capital inform of Human resources, Money and Experience in offering such services.
“dfcu Bank is coming in to sort out some of the challenges which may hinder the local companies from exploiting the business opportunities in the Oil and Gas sector,” Ronald Sonko the head of Leasing at the dcfu Bank told the logistics suppliers during the meeting.
“We have a wide range of financial products at dfcu which local suppliers can take over in order to finance their businesses at cost friendly prices. Our local companies need to get organized and apply for the products depending on the nature of their deals with the oil companies,” Sonko said.
Commenting on the offer, some participants in the meeting applauded the bank for its willingness to support the local companies but cited a problem of high Interest rates which most Ugandan banks are charging on their loans
“The Oil and gas sector is a good opportunity but majority of the local firms may not participate due to lack of capital some of us we cannot borrow money from International Financial Institutions which offers loans at cheaper price and when you resort to Ugandan commercial banks their charges are too high,” a participant said.
BY SAMUEL NABWIISO