Are Ugandan's firms ready to take advantage of the country's new opportunities in the oil industry?

Abstract

Following oil discoveries in 2006 and after numerous delays there are major oil related infrastructure projects occurring in Uganda. As it has been the case with other Sub-Sahara African countries, the government has given local content (which in Uganda is defined as a National Content) a key role. The government defines local content as the share of labor, services and goods for the petroleum sector being provided from within the country and constitutes an added value to Uganda.11National content policy for the petroleum subsector in Uganda. http://pau.go.ug/uploads/NATIONAL_LOCAL_CONTENT_POLICY_FOR_PETROLEUM_IN_UGANDA.pdfThis paper presents an analysis of Ugandan's firms’ capabilities to participate in the petroleum supply chain based on a survey conducted in 2016. The objective of the paper was to assess how prepared are Ugandan firms’ at becoming suppliers to the oil industry, and if not identify some gaps and areas where policies could be recommended to increase the chances of success at entering the supply chain. The paper is divided into 6 sections. The first one presents a conceptual framework based on literature review of the key concepts supporting our analysis: local content policies, the constructs of absorptive capacity and innovation and oil companies’ selection criteria of suppliers. The second section provides a description of the sample selection and survey design, and brief comments on the capacity building of the activities required when administering the survey. A descriptive characterization of the firms based on the survey results is presented in the third section. The four section describes the statistical measurement of firms based on indicators constructed from the survey. It also shows according to those indicators how firms that claimed to be suppliers to the oil industry performed vis-à-vis firms that are not suppliers. The fifth section provides comments on policy implication resulting from the analysis of the survey, and the last section offers some conclusions.