Local Content Bill will help curb unemployment

OPINION

As the 2016 general elections were approaching, youth under the umbrella body Youth Coalition on Electoral Democracy in Uganda, developed a joint national youth manifesto which is still the social contract with young people, with a call for reflection of their demands in the party manifestos and programs of the next government to be elected.

According to the 21-page document, the youth listed four thematic areas as key priority issues affecting them. The issues included jobs, health care for all, education opportunities, sports and culture as well as youth participation in decision making.

The youth explained that the challenges presented by unemployment are huge but there are opportunities both to divert youth from anti-social into productive behaviors, thus avoiding social unrest, to harness the youth population and to drive economic development.

Key among the demands included reserving at least 40% of public procurement contracts for youth-led businesses or businesses that employ the youth and also reserving at least 40% of jobs created in public works projects such as major road constructions for youth.

Uganda Parliamentary Forum for Youth Affairs (UPFYA) organized a consensus-building meeting on the National Local Content Bill last week, where they highlighted that 1.8 Million Ugandan Youth are running businesses informally, Over 80% of them admitted that their product lines have not changed over time indicating little or no growth, Uganda's business discontinuation rates are at 26% and among the highest in the world, with many of these businesses unable to see their first birthday.

Under the tabled local content bill cap 14 (1) every contract for public works granted to an individual or entity other than a Ugandan company or citizen, shall contain a requirement for such individual or entity to subcontract at least forty per cent of the contracted works to a Ugandan entity.

Local content describes the range of benefits that businesses such as extractive industries can bring to the areas where they operate. It's a set of actions such as local recruitment, training, purchases of local goods and services, which are designed to develop the industrial infrastructure and skills of the people in countries that host multinational or foreign companies working in various investment sectors.

Most local companies are not competitive with the international companies but through the capacity building programmes of the government in collaboration with the international companies, there has been a significant improvement in the level of local enterprises skills and ability to deliver quality goods and services to the industry.

Local content policy has the potential to expand and improve employment, including for women, young people, the rural poor and the informal sector, by increasing domestic demand for unprocessed agricultural commodities from agro-processors integrating themselves into premium value chains.

Despite the shortcomings of much of the local content legislation, a framework to operate within is better than no framework at all. There is no one-size-fits-all solution to unemployment in Uganda but we believe partnerships and collaboration, across sectors, are the way forward. After all, as youth we are highly unlikely to be unique in facing local content challenges, so why not learn from others, work together and engage government.

Since the youth make up majority of the population the bill will improve Local production of materials and products supports local business and creates employment, buildings require a wide range of different materials and components in their construction. This diversity will be used to develop a wide range of small enterprises linked to, for instance, door and window, tile, paint, roof truss, brick and furniture and fittings manufacture hence boosting employment opportunities.

Manufacturing products locally means that the skills and materials used to produce these products are likely to be available locally in the long-term and are available to carry out repairs and maintenance.

While this is most certainly the right thing to do, it also makes good business sense. Real local content will always be the cheaper and more efficient alternative for international companies operating in Uganda, as opposed to bringing in expatriates and goods from abroad; and local content works to diversify and strengthen a country's economy.

Lillian Aber

 Chairperson National Youth Council and Senior Presidential Advisor on Youth.

lillianfranka@gmail.com