This article was published in The New Vision Newspaper of 16th February 2012.
It is undisputable that oil can be a key to any nation to work its way out of poverty and create an environment of wealth among its citizens. Sadly, this has remained a dream for mother Africa. From large producers like Nigeria to Gabon, the desperation, apathy, corruption, vicious powerful class of millionaires versus masses of electorates wallowing in acute poverty, and chaos associated with “oil” is obscene. The details are utterly disheartening.
New contracts have been signed, Oil bills tabled before Parliament and much more is going on in the sector but I find it prudent that our lawmakers stop crying over spilled milk. They should focus on the bigger picture. All said, the big question is; “Will Uganda safely navigate the deep waters to avoid becoming the latest prey to Africa’s biggest resource curse?”
A 19-member delegation under the leadership of Prime Minister Amama Mbabazi is in Ghana for a 3-day meeting on strengthening Inter-Party relations. Since Energy Minister Hon. Irene Muloni is part of the team, I hope they learn a thing or two from the West African state. Ghana is such a success story but just how much can Uganda learn from this country?
Having discovered its oil in 2006, Ghana moved with technical support from the Norwegian government to formulate politically acceptable unambiguous policies to streamline the oil industry. Uganda needs to emulate this as opposed to sluggish, covert and shady approach which has already drawn the public’s anger and facilitated sealing of contracts with loopholes such as the Production Sharing Agreement signed on 1st of July 2004 between Heritage Oil & Gas Ltd and Uganda which I criticised in an earlier publication. If Uganda had learnt from Ghana’s experience when it was caught off guard by Kosmos Energy when it tried to sell its stakes in the Jubilee field due to a lacuna in legislation, this would not happen.
In 2008, Ghana went through a peaceful transition after President Atta Mills emerged victorious in the national election despite the high stakes. In comparison, Uganda is still struggling to get over an election which is over a year old. Uganda needs to appreciate this if it’s to build a sustainable oil industry.
Shortly after, President Mills noted that it is dangerous to pin all national economic hopes on oil. This type of false hope is evident in Uganda and must be managed well to stem dissatisfaction and mistrust among the citizenry.
Tullow Oil Ltd which discovered and developed Jubilee field alongside other partners in Ghana is the same company working in Uganda. This provides an opportunity for Uganda to learn from Ghana’s experiences with this company.
Since Uganda’s oil fields are at the border area with DRC, it is vital that Uganda learns from Ghana’s utilisation policy which seeks to provide an alternative of joint development of resources by two countries without conflict. This will avert a “Migingo Island” like saga.
Uganda needs to borrow a leaf from Ghana to effectively manage oil proceeds. Ghana is constantly improving on its revenue sharing and management laws and has so far set up two funds notably the Heritage Fund which is aimed at benefiting future generations long after the oil fields are exhausted and the Stabilisation Fund which is aimed at replenishing national coffers. This is supplemented by plans to have a committee responsible in advising government on where to invest.
Strengthening media oversight of oil industry by training journalists on revenue accountability and full industry knowledge is crucial. An active, knowledgeable press plays a critical role in enabling public and people in authority to engage in informed debates hence promoting accountability.
Generally, there is much more, both strengths and weaknesses Uganda can learn from Ghana such as the concept of “Dutch disease”. These experiences will go a long way in helping the country avoid oil from becoming a curse.
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