Uganda MSMEs Receive $500 000 Grant to Drive Business in the Petroleum Sector

The African Development Bank has collaborated with the Government of Uganda to sign a $500 000 (roughly UGX1.8 billion) grant agreement to support micro, small, and medium enterprises (MSMEs). The aim of the grant is to drive business connections on the East African Crude Oil Pipeline Technical Assistance project.

The Crude Oil Pipeline Technical Assistance project aims to assist local Ugandan MSMEs by providing them with the opportunity to access new markets and build connections with regional, national, and international companies. The goal of the project is to provide 500 job opportunities for individuals along the pipeline as well as contribute to the growth of inclusivity in the private sector. 

The African Development Bank, through the Fund for African Private Sector Assistance (FAPA), has contributed $500 000 to the project. The Uganda Government agreed to a counterpart fund which will be offered through the Petroleum Authority. 

Development of the grant

Uganda and Tanzania requested assistance for local business communities as a $3.5-billion investment was agreed upon in 2016 for the construction of a crude oil pipeline. The grant was the response to the request made by Uganda and Tanzania. The grant agreement was officially signed on 17 September 2020 between Swazi Tshabalala, Bank Acting Senior Vice President and Chief Finance Officer on behalf of the African Development Bank, and Matia Kasaija, Ugandan Minister of Finance, Planning and Economic Development. 

The project was led by Total E&P as the lead private sector developer. 

The African Development Bank Group of the project’s objective is to have 100 trained local micro-businesses, located in Uganda and Tanzania, to operate on the pipeline project. The pipeline allows connections amongst businesses and the goal is to connect a minimum of 70 business enterprises with each other through the pipeline project. 

There has reportedly been an increase in enterprises joining the petroleum supplier databases in Uganda and Tanzania, which will lead to job creation for roughly 500 individuals.

FAPA

The Fund for African Private Sector Assistance (FAPA) is a thematic trust fund which is a collection of funds by multiple donors. The fund is used for technical assistance and capacity building which supports the Bank’s Private Sector Development Strategy. 

The African Development Bank as well as Japan and Austria, donate to the Fund, which has reportedly provided more than $69 million to 87 projects across more than 38 countries in Africa.

The FAPA also participates in regional and national projects that are aimed at improving the business environment for Micro, Small, and Medium Enterprises, as well as strengthening financial systems, building private sector infrastructure, and promoting trade.