Augos Admin

The Petroleum Authority of Uganda (www.pau.go.ug) published a list of 441 firms that had applied and successfully shortlisted for inclusion on the national supplier database (NSD) for 2017. These are firms that are currently accredited to provide all kinds of goods, supplied, goods and services to the US$8bn oil and gas extraction sector. As a certified public accountant, the writer was interested to know who had made it so far within the accounting & auditing firm industry and found it was only the Big-4 (Deloitte, EY, KPMG and PwC). The Small and Medium-sized Practices (SMPs) were missing in from the list yet there are approximately 200 of them registered and regulated in Uganda by the Institute of Certified Public Accountants of Uganda (www.icpau.co.ug).   The SMPs typically provide their services to Small and Medium-sized Enterprises (SMEs) and from the list, there are over 300 Ugandan SMEs vying for business in the nascent oil & gas exploration industry. The SMPs should partake on the gigantic oil & gas cake and ensure they reap maximum benefits from local content promotion. The good news is that the next round of applications opens in September 2017 and we hope that the SMPs enter the fray and also join membership of the Uganda Association of Oil and Gas Service Providers (www.augos.org). However, there are various steps to follow and credentials to submit to enter into the NSD. There is still sufficient time for any SMP to develop the competencies required to compete for jobs in the accounting & auditing field which is regulated ICPAU which celebrated 25 years of enhancing the accountancy profession in Uganda (1992-2017). The other encouraging picture is that about 70% of the 441 firms are Ugandan. On paper, Uganda is already on the right path to promote local content. However, we see competition from firms from China (12%), UK (6%) and South Africa (4%). The competition appears small in terms of numbers but since those firms come from developed countries, there is a risk of them grabbing the cake when Ugandan firms are looking on. Why? The 330 Ugandan firms may have qualified to be on the NSD, but when the actual technical and financial bidding starts, do they have the capacity and capabilities to execute the various assignments (medium and large)? To be proactive, the SMPs and SMEs should start embracing the concept of Joint Ventures and Consortia where firms pool skills, experience and resources to be able to compete at a very high level. If the 330 Ugandan firms on the NSD each attempt to go on their own, the cake could be snatched by the few foreign firms. If 200 SMP acquired a sizeable amount of the cake, each of them could easily employ an extra 50 qualified professional accountants, which is creation of new jobs to the tune of 10000. To put this in context, ICPAU has approximately 2800 members accumulated over 25 years, but this number can be accelerated by SMPs to 10000 in just 3-5 years as major infrastructure projects take route in Uganda. However, the SMPs need to take stock of their human capital and design strategies to enhance competitiveness at individual firm-level and collectively through mergers & acquisitions and inter-firm collaborations. The final news is that the writer will be finalizing a research on human capital strategies and their impact on the competitiveness of firms; in the context of SMPs in East Africa. There are over 1200 qualified accountants practicing professional accounting in the Ugandan, Tanzanian and Kenyan SMPs alone and we encourage participation in the upcoming research which will take place in 2017 and 2018. By Albert Richards Otete Partner J. Samuel Richards & Associates

IN ATTENDANCE OF UGOS LAUNCHING AS GUEST OF HONOR WAS UGANDA'S VICE PRESIDENT EDWARD SEKANDI, AND AS GOVERNMENT MINISTER IN CHARGE WAS MINISTER FOR TRADE AND INDUSTRY, AMELIA KYEMBADE. Speech by Minister for trade and Industry The Oil and Gas sector in Uganda has caused a stir among the population A lot of apprehension has arisen especially about the involvement of What are people’s expectations? —People’s expectations exist in two distinctive forms:     —Positive     —Negative How do we balance the Expectations?     Consultations with the public & all stakeholders     Capacity building     Employment opportunities in all sectors     Create awareness among the population     Enhance local content as far service provision is concerned     Massive training of youth and other members of society.     Transparency about the industry Energy Perspective – Role of Ministry of Trade, Industry and Corperatives Mission: “To develop and promote a competitive and export led private sector through accelerating industrial development for economic growth” Oil and Gas is an industry     All the major petroleum products are currently imported, thereby, exposing the country’s economy to fluctuating and exorbitant prices     Establish strategies on how local SMEs could penetrate the oil and gas industry and promote local content     SME involvement can be at different levels from hospitality and catering services to transport services among others.     Formulate policies on industrialization on the mid-stream and up-stream phases of the industry     Formation of Cooperatives/ Association     Creation of a multi-sectoral approach between government agencies and private sector. Association of Uganda Oil and Gas Service Providers I highly commend your initiative of forming this Association. This is the first step towards penetrating the oil and Gas industry. It will be a force towards achieving the following;     Lobbying & advocating for Infrastructural development (Refinery, roads, pipelines, energy etc)     Joint capacity building for local skills development     Creating a strong negotiating base     Enhancing the strength of local SMEs     Creation of a stronger financial base Advocating for the creation of a multi-Sectoral approach between government agencies and the private sector.     Creation of economies of scale in acquisition/ procurement of capital intensive machinery     Establishing a local supplier environment that will benefit all Ugandans     Eases access to seed capital for local entrepreneurs     Increase awareness to ensure that indigenous operators are aware of the opportunities in the sector and their rights.     Formation of a collaborative action among stakeholders Conclusion I would like to congratulate Ugandans for having formed the Association of Uganda Oil and Gas service providers. The formation of the Association of Uganda Oil and Gas Service providers will indeed demystify the myth that this industry is only for foreign investors The benefits outlined above will promote the local content that had lagged behind in this sector. A multi-sectoral approach between government agencies and the private sector, is the only panacea to our social and economic evils. I salute you over this achievement A famous Chinese philosopher once stated, “ A journey of a thousand miles begins with one step” Your journey has began!