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Uganda’s journey to EITI

The Oil-rich Uganda is set to join the Extractive Industries Transparency Initiative (EITI), an independent, internationally agreed upon, voluntary standard for creating transparency within the extractives sector. Ever since Ugandan discovered commercially oil reserves in 2006, civil society actors started a campaign to convince the Ugandan government to join EITI.

The campaign registered headway when Parliament in 2008 passed the National oil and gas policy that among others asked Government to join EITI. The policy states that joining EITI would help “ensure collection of the right revenues and use them to create lasting value for the entire nation,”

As Uganda made little progress in joining EITI, the Western Uganda Youth MP Gerald Karuhanga who is presently the Ntungamo Municipality lawmaker presented to parliament documents which he alleged implicated Uganda’s foreign affairs Minister Mr Sam Kutesa, internal affairs minister Hilary Onek, and Mr Amama Mbabazi, the then Uganda’s prime minister in receiving millions of dollars from Tullow Oil.

He alleged that between June 1st and July 16th, 2010, Tullow paid up to $100 million to “expert” bureaucrats, among them the three ministers. Tullow Oil denied the allegations. Parliament instituted an adhoc committee to investigate the matter and after two years of investigation, the committee did not find any evidence to confirm any wrongdoing by Tullow Oil and the Ministers.

In a stormy parliament session when the oil bribery allegations were discussed in parliament in October of 2011, Parliament passed a resolution re-affirming Uganda’s need to join EITI.

The European Union delegation to Uganda has been urging Uganda to join EITI, a source at the EU told oil in Uganda.

“We have been having discussions with the Ugandan government to embrace EITI. We are pleased that Uganda has embraced the initiative. We wait to see how it will be implemented” a diplomatic source said before referring this author to the EU website that has a short statement about EU’s stand on EITI.

The decision taken by Uganda’s Cabinet on January 28 and publicly announced by the Government of Uganda on January 29, is a very positive step towards improved public financial management and accountability of natural resources, said the EU statement dated January 30, 2019.

“The EITI is the global standard to promote the open and accountable management of oil, gas and mineral resources, and Uganda’s decision to become a fully-fledged member state is an important step for improved accountability particularly as the country continues to prepare for oil production,” said EU Ambassador Attilio Pacifici.

Through persistent policy dialogue, the European Union and its Members States, as well as other leading development partners, have encouraged Uganda’s formal accession to the EITI to address key governance issues of the oil, gas and mining sectors, including transparency and accountability.

“This is a very positive step towards improved financial management and accountability of natural resources,” Attilio added.

EITI was launched in June of 2003 as a way to tackle corruption within those industries that engage in the commercial development of oil, natural gas, and minerals.

When a country joins EITI, it agrees to publicly disclose the money and other benefits it receives from the extractive companies that operate within its borders. EITI does this by having independent auditors publicly reconcile company payments with government receipts.

“Ideally, such transparency helps empower all major stakeholders, including civil society, to hold governments and oil companies accountable for the management of those resources” says a report that was released by the Advocates coalition for Development an Environment (ACODE), a Ugandan Think Tank.

The report titled, Extractive Industries Transparency Initiative (EITI), a necessity for Uganda was authored by Ms Winfred Ngabiirwe, the Executive Director, Global Rights Alert (GRA), Executive Director and Publish What You Pay Uganda Chapter and Ms Elizabeth P. Allen, who was a research Associate at ACODE.

The research stated that EITI can help reduce secrecy and mistrust between governments, citizens, and oil companies.

“In many oil-producing countries, secrecy in the extractive sector has heightened suspicion among citizens who assume that such secrecy exists to hide corruption on the part of government officials and/or oil companies. EITI can help create forums for dialogue, understanding, and resolution that illuminate the sector for all players involved” the study said.

EITI can also help create an improved investment climate for those countries that participate. Credible investors and international financial institutions find it pleasing to invest in governments that have embraced EITI since they are assured of transparency.

EITI helps the public in understanding how much their country receives from extractive industries and the contribution of minerals in the economic welfare of the citzens.

In a country where corruption is rampant, says Mr Biira Nasser Kiwanuka, the Executive Director of the Mid-Western Regional Anti -Corruption a Coalition (MIRAC), EITI acts as a watch dog for the public to expose incomes, expenditures and leakages of revenues from oil and other minerals.

Edward Ssekika & Francis Mugerwa