Works minister Katumba calls for the amendment of local content law

Katumba, who was giving an address during the launch of the analytical data dashboard report at the Public Procurement and Disposal of Public Assets Authority (PPDA) tower in Nakasero on Tuesday, July 11 2023, said the local content act does not differentiate between a locally owned company and a locally registered company, which means foreign owned firms still enjoy local benefits once their companies get registered in Uganda.

As a result, he added, foreign players have registered their companies and taken up the opportunities meant for local players.

 "The problem with the current law is that it does not differentiate between a locally registered company and a locally owned company. What smart Chinese have done is to locally register their companies, thus making them local companies and qualifying for opportunities meant for local players,” he said.

He added, "If we are going to consider locally owned companies, the law needs to be amended to differentiate between a locally owned company and a locally registered company. For a company to be considered as local content, the majority of the company (at least 75%) should be owned by Ugandans. We need to make this clear. A lot of locally registered companies are considered, but few are locally owned."

Katumba said the idea behind considering local content in Government tenders and contracts is aimed at helping locally owned companies grow.

However, while speaking to the media, the executive director of the PPDA, Benson Tumuramye, said that the PPDA Act has since been amended to cater for locally owned companies.

"When President Museveni directed that those legal frameworks that constrained service delivery to the citizens of Uganda should be amended. The issue was: how do the citizens benefit from the huge percentage of Government spending? That decision was taken in 2017, and in 2021, the PPDA Act was the first one to be amended in that direction," he said.

He added, "One of the amendments was Section 59, which required that some contracts be reserved for the local providers but also taken into consideration by the special interest groups."

"Most importantly, if a foreign company gets a contract in Uganda through a competitive process, they must subcontract a minimum of 30% of the value to local providers. That was specifically intended to raise the capacity of the local players so that if these foreign companies leave, we can fall back on our local players."

Tumuramye also said that PPDA has made recommendations regarding concerns from local players who say they are usually not involved in the real work when subcontracted by foreign firms.

Asked what PPDA has done to avoid foreign contractors registered as local companies taking up local opportunities, he said the Government entity has revised the act provision and that now foreign companies are required to have been in Uganda for at least 10 years.