Beyond first oil, SMEs can operate sustainable enterprises – experts

Small and Medium Enterprises can invest in areas to improve their capabilities and survive beyond first oil, sector experts have said.

Tom Ayebare Rukundo, Manager of Economic & Financial Analysis at the Petroleum Authority of Uganda has stressed the importance of diversity, equity, and inclusivity in SME capacity-building to attract contracts from oil companies, grow revenues, and ensure the sustainability of the business.

Rukundo was speaking as a moderator during an X Space event by the Uganda Chamber of Mines and Petroleum (UCMP) on July 18, part of the 90 Days of Oil and Gas Media campaign.

He highlighted opportunities in transportation, security, food and beverages, accommodation, human resource management, office supplies, fuel supply, land surveying, crane hire, construction materials, and civil works.

Rukundo said that Ugandan SMEs have already secured contracts worth US$1.7 billion out of a total US$7.9 billion in the oil and gas sector. Over 13,000 jobs have been created, with 90% filled by Ugandans, including 5,000 from host communities. He mentioned that SME capacity-building programs have reached 5,000 beneficiaries, with more expected in the future.

John Walugembe, Executive Director of the Federation of Small and Medium-sized Enterprises Uganda (FSME) said, “We have seen small and progressive wins, but there is still a lot of work to do,” he said.

He encouraged members to improve their standards, supply chains, and financial management, and address environmental, social, and governance issues.

He said that some SMEs have benefited from capacity-building programs by the Stanbic Business Incubator and the African Development Bank, with more opportunities through the Industry Enhancement Centre funded by TotalEnergies.

Humphrey Asiimwe, CEO of UCMP, stated that the sector’s opportunities favor companies that consistently demonstrate high standards and innovate to avoid only dreaming about oil and not earning from it.

Asiimwe assured ongoing engagement with the PAU, the Ministry of Energy, and other stakeholders to address issues like late payments, invoicing, standards, and high credit costs.

According to the Uganda Investment Authority shows that approximately 1 million SMEs operate in Uganda, making up about 90% of the private sector and employing a significant portion of the workforce.