Home Business Foreign firms to subcontract 30pc of project sum to Ugandan firms

Foreign firms to subcontract 30pc of project sum to Ugandan firms

Uganda’s finance ministry has introduced new guidelines that will ensure foreign companies undertaking public projects subcontract at least 30pc of the value of works to local companies.

Speaking during the launch of the new guidelines, Minister of Finance for General Duties Henry Musasizi said the introduction of the Guideline on Reservation Schemes to Promote the Participation of Local Providers in Public Procurement is expected to ensure local industries become competitive and support overall economic growth.

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“This will ensure that our local businesses have equitable access to government contracts and will encourage and boost domestic production of the much-imported goods and services (i.e. import substitution). Under this guideline, thresholds have been set and these will provide a levelled playing field for nationals to exclusively compete among themselves,” he added.

The new rules also provide for different procurement thresholds by value to Ugandans, Resident and East African Community (EAC) providers, all products manufactured in Uganda to be procured by Procuring and Disposing Entities from national and resident providers and all inputs manufactured in Uganda must be procured by entities and government contractors from national and resident providers.

The EAC member state also announced Reservation Schemes to Promote the Participation of Registered Associations of Women, Youth, and Persons with Disabilities guidelines to enhance participation of disadvantaged groups in public procurement.

Under the rules, public companies will set aside 15pc of their annual procurement budgets to the groups while the Central Government entities are required to source for local suppliers and service providers for projects not exceeding UGX 30 million. Threshold for local governments is set at below UGX 10 million.

“Together, these guidelines will in the mid and long term address concerns of unemployment, low production, and household income inequalities across all sectors,” he added.

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