What you need to know:
Partners. The private sector has been told to look at government as a development partner.
Kampala. Private companies have been urged to take part in financing two government projects worth $3.5 billion, (about Shs12.897 trillion) which officials say will open up more investment opportunities in the country.
The projects are oil and road infrastructure that government needs to develop within the next five years.
Speaking at a breakfast held by the Uganda Investment Club Association in Kampala last week, the macroeconomic advisor to government in the Ministry of Finance, Mr Moses Bekabye, said: “The two government projects ready for the private sector to take part with government is the oil refinery pipeline worth $2 billion (about Shs7.370 trillion) and the Kampala-Jinja expressway costing $1.5 billion (about Shs5.527 trillion).” He said there are a number of projects in the country that give the pension fund managers and insurance companies opportunities to partner with government in funding them at inception period.
Although government passed the Public Private Partnership Bill last year, the participation of the private sector in government projects is still very minimal.
In relation to the above, Mr Bekabye, said: “The private sector should not see government as desperate for funding from them but as a partner in development.”
Beyond the oil pipeline refinery project and the Kampala-Jinja expressway, Mr Bekabye said the upgrading/expansion of Entebbe International Airport is a Public Private Partnership (PPP) project that the private companies could take part in providing needed funds.
The chief executive officer of Capital Markets Authority, Mr Keith Kalyegira, said currently there is Shs7 trillion in the market comprising of Shs5 trillion from National Social Security Fund (NSSF) and Shs2 trillion from fund managers which can be used by the private sector in financing development projects.
Citing the Uganda Retirement Benefits Regulatory Authority (URBRA) Act, Mr Kalyegira said the amount of fund which should be invested in the market through private equity is 15 per cent (Shs1.5 trillion) and another 5 per cent that can be invested by others that translates into 20 per cent of the total funds available in the market.
The law on PPP
In July, the Public Private Partnership Bill, 2012 ,was passed by Parliament and assented to by the President in August. The Act will govern the relationship between government and private entities in public private partnerships and provide for guidelines and procedures for the development of PPP projects.