MP criticized over local content draft bill

Kasanda North Member of Parliament, Patrick Nsamba was last week criticized over discrepancies in the draft local content bill that seeks to promote local participation in public procurement of goods and services.

Nsamba, who is soon introducing the private member's bill, was presenting its draft to members of the private sector, the manufacturers' association, legal and financial consultants and the general public at the Imperial Royal hotel.

He was admonished by a consultant, Martin Okumu who said some clauses in the bill contradict local, regional and international trade laws that Uganda is party to.

Okumu stated that the bill will affect the implementation of World Trade Organization's Trade Facilitation Agreement, 2014, the Current Public Procurement and Disposal of Assets Act, 2003 and the Uganda Investment Authority Code, 1999.

"Those Acts espouse that Uganda's economy is fully liberalized and publically divested and the economy is mainly determined by forces of demand and supply. Therefore, by being silent on them, the local content bill paints a picture that Uganda is reneging," he said.

He said the bill also needs to be harmonized with the UIA policy which states that foreign investors can fully own their businesses in Uganda and also repatriate all their funds in foreign currencies.

"Actually many investors in Uganda had been attracted because of the policy in the Uganda Investment Authority Act, 1999. The bill will also counter the EAC Common Market Protocol where goods and services are deemed as local products from the whole region and treated as domestic products of member states, which are to move and trade freely," he said.

Okumu who was visibly irritated advised the movers of the law to consult both local and international laws to avoid creating contradictions. He added: "When Government procurement is advertised, an MDA cannot dictate that you buy Ugandan products, otherwise the procurement-PPDA Act, 2003 will have been floated. But the Bill also does not address effectively the manufacturing capacity gaps of Uganda industries."

He criticised Nsamba for focusing on the Mining Act, 2003 and the Electricity Act, 1999, yet there are many aspects of the economy, where he said, the bill could apply

Part III, Section 4 of the Bill states that where no Ugandan company has the required capacity or financial competence to supply goods or services, a special committee shall authorize a foreign company to supply.

Okumu said this can easily become a recipe for corruption since the Committee would be holding power to determine which foreign company will supply.

He added that Part III Section 18, 19 and 20, of the Bill gives too much power to determine employment of Ugandans, restrictions on the employment of non-citizens and appointment of Ugandans to the Committee.

The draft law seeks to promote the training and employment of Ugandans, transfer of knowledge and technology and the provision of goods and services by Ugandan companies.

In reaction, Nsamba said rather than be criticized; he should be guided on the way forward because he is only seeking more views from the public before presenting the Bill on the floor of parliament.

"Instead of attacking me, please give me your advice. I have already done so much as a person by putting the draft together. All I need now is more views and support to ensure that the bill benefits the entire nation positively," he said.

The bill comes shortly after the local content policy, which guides its formation, was launched recently by Prime Minister, Ruhakana Rugunda.

Nsamba said the bill is critical in enabling the policy to work, through imposition of specific obligations to persons or entities to source goods and services locally.

"Government has been donating billions of dollars by engaging foreign companies in almost all procurements- from road construction, power dams, and government buildings to uniforms. Therefore, even with the recent policy, without the input of a law, it will be difficult to sustainably enforce BUBU," he said.