Parliament Passes Local Content Bill, Procurement Of EAC Goods Approved

Parliament Passes Local Content Bill, Procurement Of EAC Goods Approved

Legislators have considered President Yoweri Museveni’s recommendation on prioritisation of procurement of East African goods, works and services under the National Local Content Bill, 2022.

Clause 4 of the Act that was passed on 06 September 2022 provided that, a local entity shall give preference to goods which are manufactured and services which are provided by Ugandan entities’.  

President Museveni however, returned the Bill arguing that giving preferential treatment to Ugandan goods, works and services is contrary to the East African Community (EAC) Protocol of free movement of goods and services and the East African Monetary Union.  

While justifying the President’s position during the plenary sitting on Wednesday, 29 March 2023, the Deputy Attorney General, Hon. Jackson Kafuuzi said that the EAC Protocol takes precedence over the national laws.

“I understand that other countries may have imposed non-tariff barriers, violating the EAC Protocol but we do not have to do that in law. It will be illegal and can be challenged in the EAC Court,” said Kafuzi.

Hon. Enos Asiimwe (NRM, Kabula County) who wrote a minority report agreed with the Attorney General saying that Uganda is bound by EAC protocols and treaties.

“We have been at the forefront of advocating for the EAC integration. Uganda cannot be the one to put restrictive laws on the movement of goods, services and works,” said Asiimwe.

The Leader of the Opposition, Hon. Mathias Mpuuga said that if preferential treatment is given to Ugandan goods, it would be contested in the EAC Court.

“What I had advised the Attorney General is to find a new sub-clause to accommodate a requirement that where need be, priority will be given to Ugandan entities to make sure that we do not legislate blindly,” said Mpuuga.

The Minister of State for Trade, Industry and Cooperatives (Trade), Hon. David Bahati noted that Uganda spends time negotiating agreements and protocols, and they should be respected.

“We shall soon be moving from Buy Uganda, Build Uganda to Buy Africa, Build Africa. We have secured a market for all the 54 African countries,” Bahati said.

The mover of the Bill, Hon. Patrick Oshabe however, described the amendment as ‘legislating for East Africa, and not Uganda’.

“The purpose of this law is an affirmative action and we have provided for EAC goods in the Bill. Now, I do not know how to proceed if the House thinks that we can prioritise other EAC countries,” said Oshabe.
His effort to explain that other EAC countries have laws that promote local content was not considered.
“It makes no meaning for me to sit here to make a law for EAC. The purpose of the law is defeated,” Oshabe added.

His desire to recommit the clause after the debate, saying that the House made a mistake was also not considered.

The lawmakers, however, agreed to 30 per cent of the works to be sub contracted to Ugandans differing from Museveni’s proposition mandating the minister to determine the percentage.   

The Minister of State for Finance, Planning and Economic Development (General duties), Hon. Henry Musasizi said that since the law is intended to promote local content, it is right for the percentage to be determined by Parliament and not the Minister.

“I see no harm in us determining the minimum percentage. I would suggest anything between 30 and 40 per cent,” Musasizi said.

The mandate to develop guidelines for the implementation of local content has been given to the minister, as opposed to leaving it to the Public Procurement and Disposal of Public Assets Authority.

The bill seeks to impose local content obligations on a person using public money or utilising Uganda’s natural resources or carrying out an activity requiring a licence to prioritise Ugandan citizens and resident companies owned by citizens in public procurement.

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