NRM Resolves to Ring-fence Contracts for Local Content

In what appears a move to end the domination of foreign companies in the Ugandan economy, adiposity the ruling NRM party has decided to put a quota for local content on all major government projects.

“Government shall ensure that, ampoule where technically possible and financially viable, local industries shall benefit from the projects (such as dams and roads) that are being undertaken in the country,” reads part of the resolutions adopted by the recent party retreat at the National Leadership Institute, Kyankwanzi.

Struggling with an unfavorable balance of payment position with many trading partners, the size of the GDP of Uganda would be much bigger if it were to export more products.

And more importantly, indigenous Ugandan investors have for long been kept out of lucrative infrastructural projects with foreign firms using imported materials.

This has led not only to massive outflows but also a depreciation of the local currency.

If, for instance, the shilling appreciates to Uganda shillings 2,000 per one dollar, the GDP would be US$42 billion today.

Uganda would then already be a middle-income country.

According to the NRM resolution, “the Office of the Prime Minister, Ministry of Finance, Planning and Economic Development and relevant Ministries, shall study what contracts should be ring-fenced for local entrepreneurs; and also ensure local content is promoted in Government contracts with other parties.”


In his Budget speech this year, Museveni said Uganda donates US$875million to China each year in imports.

“We are donating to India US$1.154 billion each year in the form of imports; to UAE ?US$406 million; to EU ? US$637 million; to USA ? US$89 million; to South Africa ?US$257 million,” said Museveni.

“Yet our own exports to these countries are as follows: India ? US$24.8 million; to UAE ? US$.62.6 million; to EU ? US$433 million; to USA ? US$27.2 million; to South Africa ? US$4.7million; to China ? US$54.7 million.”


Meanwhile, the party resolved to fast track the construction of 24 industrial parks to attract investors; deliberately link industry to forestry and agricultural products, and other natural resources; and ensure relevant Ministries actively promote production of acaricides, animal drugs, pesticides and fertilizers within the country, with appropriate technical advice to the farmers.

The Ministry of Agriculture, Animal Industry and Fisheries will undertake more efficient and sustainable management of the lakes to get optimum returns from the fisheries industry;

Government shall continue the systematic capitalization of Uganda Development Bank (UDB), to reduce the cost of borrowing for investment and long-term financing.

Government was tasked to urgently capitalize the Energy Fund to enable the Ministry of Energy and Mineral Development execute outstanding projects; reduce the Corporation Tax now at 30% level; and reinstate Tax holidays for investors.

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