PAU, SMEs sign MOU to create smooth business linkages

The Petroleum Authority of Uganda (PAU), has signed a Memorandum of Understanding with Small and Medium Enterprises (SMEs) so as to create business linkages along the East African Crude Oil Pipeline (EACOP).

Mr Michael Otonga Ochan, the Director of finance and administration at the Petroleum Authority of Uganda, who officiated the signing of the Memorandum of Understanding (MOU) on behalf of the Minister of Energy and Mineral Development, revealed that the major aspect of the Memorandum of Understanding is to have a good market for goods and services between Small, Medium and Large Enterprises. He said while signing the MOU at the offices of the Petroleum Authority of Uganda in Entebbe on Thursday.

Mr Otonga said he is optimistic that the MOU will go a long way to create huge market opportunities for small and medium enterprises to be in a position to conduct business with large Enterprises that have already contracts with the Petroleum Authority of Uganda.

"The MOU provides backward and forward linkages between small and medium enterprises and large Enterprises, thereby providing a smooth flow of goods and services. We have so far trained 400 companies both women and youth-led,” Mr Otonga said.

He however cited formalization or registration of Small and Medium Enterprises as a big challenge adding that the numbers are still low.

The Enterprise Development officer at Petroleum Authority Uganda, Mr Peter Kenneth Bintu, said as management they intend to increase collaboration between small, medium, and large Enterprises such that small companies are able to supply big companies and also improve on the quality of products they supply in the market.

“The MOU creates an avenue for small business enterprises to trade with big companies that already have contracts with the oil and gas industry. It also mandates big enterprises to provide knowledge to small and medium enterprises on standard goods and services," Mr Bintu stated.

The Director Kasirabo Holdings Ltd, an Enterprise that has a contract with the Petroleum Authority of Uganda, welcomed the MOU saying it's a big opportunity for them as big enterprises to deal with small and medium enterprises especially to improve on the quality of products produced in the market.

"As big enterprises, we shall liaise with the Petroleum Authority of Uganda along the East African crude oil pipeline to provide a big chain in the provision of disease-free seedlings and safe animal genetics for continuity of trade between the enterprises. The seedlings are expected to yield good yields while the genetic animals will produce much milk," Mr Kasirabo said.

The Director Esteem International Consultant Services as well as the Deputy Executive Director Uganda Investment Authority (UIA), Dr Paul Kyalimpa, said the MOU will provide great business linkages in the ten districts of Mubende, Kikuube, and Kakumiro among others, where the East African Crude Oil pipeline will pass via to Tanzania.

Dr. Kyalimpa adds, "We already have political will from the local leadership and besides this, we have also supported Small and Medium Enterprises in terms of training. We have also conducted a survey on registered small and medium companies that will supply goods and services to big companies.”

"However, our primary objective is to build capacities of small and medium enterprises such that they come together and form groups that will supply goods and services to big companies that already have contracts with the Petroleum Authority of Uganda," he further noted.