Move to empower local construction industry

On Thursday, Vice President Jessica Alupo represented her boss at celebrations to commemorate 30 years of the Uganda National Association of Building and Civil Engineering Contractors (UNABCEC). The President’s speech focused on the importance of the construction sector.

He described it as the backbone of the nation’s development, consistently contributing a Gross Domestic Product (GDP) that accounts for 12 percent of Uganda’s economic prosperity. The sector “breathes life into our infrastructure, fuels economic growth, and provides livelihoods to countless individuals and families across our nation,” he said.
Parliament in September last year passed the Local Content Bill in all, but the oil, gas and petroleum sectors. 

Prior to that, there were campaigns such as the “Proudly Ugandan”, which was being promoted by the Private Sector Foundation of Uganda (PSFU) and later the “Buy Uganda, Build Uganda” campaign which was being championed by the Ministry of Trade and Commerce, with a view of promoting the consumption of locally made products.

All these would have inevitably led to strengthening the local manufacturing and service sectors with a view of giving Ugandans experience and expertise. They have, unfortunately, not come with the required support.
Government, as the case of the tax breaks and other concessions given to the Uganda Vince Coffee Company would suggest, has been giving preference to foreign firms and investors instead of empowering local firms to thrive.

How many Ugandans are involved in the banking and construction sectors where the real money is? A list of 13 roads and bridges that were completed in 2017 reveals that only two were worked on by local firms.
We are facilitating capital flight, a fact that Finance minister Matia Kasaija pointed out as far back as 2017 when he revealed that the Shs3.6 trillion that government had so far spent had gone to foreign firms.

Uganda needs to do something deliberate to facilitate Ugandans to play a leading role in the construction industry.
We must begin by addressing the project implementation designs that do not favour local contractors. We need to revisit policies around bid guarantees and the requirement for firms to first do up to 30 percent of the work before they are paid. 

We also must make it incumbent upon government to expedite payments to contractors. Delayed payments are crippling many a promising firm.
Finally, we need a deliberate policy to empower local firms with long-term loans at very low interest rates if we are to build local capacity.