Everybody knows that oil is all about money for the companies, the contractors, the government, the speculators rushing to buy up land in Bunyoro . . . But if we re-phrase that thought as “It’s all about economics” it suddenly seems complicated and remote—something that non-economists struggle to understand. Yet, with parliament currently considering a Public Finance Bill that will make key decisions on oil revenue management, much wider public debate is needed over how Uganda’s share of the money should be spent and invested. The 3rd issue of Oil in Uganda’s quarterly, print newsletter, which is now rolling off the presses, tries to demystify the economics as a contribution to the debate. Here we re-publish one of the main articles from the newsletter, UGANDA’S OIL REVENUES: TEN KEY QUESTIONS Read More
By Angelo Izama
During the oil debate in November 2011, parliament was piqued by an incident in which a letter written to the Speaker Rebecca Kadaga in defense of Tullow Oil was presented on the floor by the Prime Minister Amama Mbabazi before Kadaga could open hers. The sense that government and the oil companies are locked in a tight embrace, working hand in glove, explains the attitude of mistrust that ordinary MPs now feel.
In the last seven days, battle lines have been drawn. In a rather bizarre commentary made on the distance ordinary Ugandans feel from the process, an NGO alliance led by Advocates Coalition for Development and Environment invited all of Uganda’s 370 MPs to the lakeside resort of Munyonyo to debate amendments to the country’s proposed oil bills. Read More
Uganda should move carefully and without haste to develop its oil industry and wider economy. Well crafted laws, with institutional checks and balances, are essential to govern the commercial aspects. Revenues should be deposited overseas in hard currency accounts, with a portion saved for the future—because development cannot take place overnight, it needs to phased. Increased government spending should be tied to a comprehensive development plan. Environmental, health and safety issues should be governed by regional laws that bind international oil companies to the same standards they would have to apply in their countries of incorporation—because otherwise they ‘won’t take it seriously.’
So says Columbia University professor, scholar-activist and renowned extractives industries expert, Jenik Radon, who has been delivering a series of lectures at Makerere University. Oil in Uganda caught up with him as he packed his bags to return to storm-buffeted New York City. Read More
More than 140 Ugandan members of parliament gathered in the Munyonyo Speke Resort today to ‘harmonise’ their positions ahead of the expected parliamentary debate next week on the two Petroleum Bills that were tabled in February.
The event was convened by the Parliamentary Forum on Oil and Gas (PFOG) which has criticised the draft laws more strongly than the Natural Resources Committee recommendations published last month.
PFOG, in common with many civil society groups, is calling for more limits on executive power and for stronger environmental and transparency provisions. Read More
Uganda should deploy oil revenues to create universal old age pensions and universal health insurance to make a more humane society. This would be a real investment in the future of the nation. So says Dr. Ezra Suruma, Uganda’s former Minister of Finance, in this exclusive interview with Oil in Uganda. He accepts that it will be prudent to place some of the revenues in an Investment Fund—because too much money flowing too fast into the general budget would be difficult to absorb. But, he argues, all Ugandan citizens should become individual shareholders in the Investment Fund, in order to ensure that each and every citizen benefits directly through annual dividends—and also to create citizen-shareholder pressure for transparent and corruption-free management of the funds. Read More
International groups and Ugandan civil society activists have expressed disappointment with a long awaited Natural Resources Committee report that was finally tabled in parliament last Thursday.
For the last seven months the committee has held extensive public and private consultations on two petroleum bills to regulate the development of Uganda’s oil industry. The draft bills, prepared by the Ministry of Energy and Mineral Development, were strongly criticised by civic groups for giving too much power to the Minister responsible for oil, with relatively little parliamentary oversight.
The committee’s report, a copy of which Oil in Uganda has seen, does not propose to trim the powers of the Minister, however. It recommends the introduction of several clauses to ensure the involvement of parliament and cabinet in decision making processes, but the minister still remains supreme. Read More
In a fifth report from Ghana, Oil in Uganda staff writer, Chris Musiime, describes the country’s efforts to institutionalise transparency in the handling of revenues from oil and mining industries.
Mismanagement of revenues from the extraction of natural resources is widely cited as a major factor leading to the much-feared “resource curse”—the paradox that countries with an abundance of natural resources tend to have slower economic growth and, in many cases, more instability, than their less endowed counterparts.
To avoid this, Ghana joined the Extractive Industries Transparency Initiative (EITI) in 2003, as a way of tracking revenues from its minerals trade, eventually extending the practice to the oil and gas industry in 2010. Read More
FORT PORTAL: Inside a colonial style bungalow, partitioned into several rooms, the largest space is devoted to rows of shelves containing books, magazines and leaflets on petroleum. The library, its staff say, receives about 20 visits a day from people seeking information on Uganda’s newly discovered oil to know what is happening in the oil sector and how to benefit.
This is the initiative of the Kabarole Research and Resource Centre (KRRC), based in Fort Portal, which has set out to sensitize the people in the Ruwenzori sub-region about Uganda’s newly discovered oil, so they will know how to benefit from the petro dollars while also holding their leaders accountable in use of public resources.
The centre serves the six districts of Kabarole, Kasese, Bundibugyo, Ntoroko, Kyenjojo, Kamwenge and Kyegegwa, which have a joint population of around 2.5 million people. Read More
Uganda plans to create a Petroleum Authority to regulate the oil industry and a National Oil Company to partner with international oil companies in extracting and marketing the resources. In a second report from Ghana, Oil in Uganda staff writer, Chris Musiime, describes the role and evolution of similar institutions in that country. Whilst at first sight Ghana appears to have followed a ‘fast track’ from oil discovery to oil production, this report shows that in fact the country has a long history both of oil exploration and of efforts to develop an institutional framework to manage the industry. Read More
Growing demands from cultural leaders for a share of oil revenues could spark ethnic conflicts among marginalized communities in mineral rich areas of Uganda, analysts say.
“If communities begin demanding higher percentages, it will set precedents. Mineral sites may bring conflicts as they start fighting for their shares of royalties. Far from bringing wealth and health, we may not get political hygiene but ethnic politics,” according to Makerere University History and Development Studies don, Ndebesa Mwebestya. Read More