Recently, 2.5 million
barrels of oil were discovered in the Albertine Graben in Western Uganda. Hence,
it is estimated that Uganda will be able to support production of over 100,000
barrels of oil per day for 20 years.
For ordinary Ugandans, this
news has been welcomed with two distinctive forms; the positive and the
negative. In the case of oil discovery, the positive expectations
are truly hopes that the valued resource and the associated revenues will
deliver substantial social, economic and infrastructural improvements, whilst
liberating Ugandans from poverty by boosting economic growth.
Negative expectations also
exist since resource abundance is considered a “curse.” While oil discovery
presents considerable opportunities, it also carries a risk commonly known as the
natural resource curse - a situation where abundance of tradable
natural resources such as oil ironically leads to economic stagnation, the
death of other traditional and non-traditional exports such as agricultural and
manufactured products, and conflicts over the allocation of resources.
This has been witnessed by
some African countries for instance Nigeria – which pumped her first barrels of
oil in the early 1950s and has since set world records in corruption; and
Angola, whose story is just as sad! Despite the huge revenue generated
from oil, 70% of Angolans live below the poverty line.
Already, the oil sector in Uganda is toppled with many corruption scandals; with some leading to the suspension of new deals between Uganda and foreign oil companies and to the censorship of four ministers by the 9th Parliament.
Already, the oil sector in Uganda is toppled with many corruption scandals; with some leading to the suspension of new deals between Uganda and foreign oil companies and to the censorship of four ministers by the 9th Parliament.
This only means that a
country like Uganda, which is new in the oil sector, needs to draw lessons from
countries that have a reputation for better governance and are blessed with
favorable fundamentals.
Ghana is one such a
country. She produces 120,000 barrels of oil daily, which is close to Uganda’s
100,000. Ghana discovered oil in 2006 after decades of exploration. To a large
extent, she has managed the sector well.
So, what lessons can Uganda
learn from Ghana to avoid causing the wretchedness associated with corruption,
civil and armed strife, and poverty plus chaos that have left some other
African countries ruined? Here are a few suggestions:
Ensure transparency of revenue and distribution of
allocations; the Ghanaian
government has really tried to make public all the documentation that form part
of the oil bidding process. This has made the political capture of oil rents
and general corruption in the sector much difficult to accomplish.
Institute constitutional governance; the Ugandan government can learn from Ghana, which
has tried to involve every citizen to make inputs towards the exploitation of
the resource to promote good primacy of the sector.
Invest in the sector; the Ugandan government can institute policies that
position it as a key stakeholder in the oil sector. Ghana’s National Petroleum
Corporation’s objective is to “become a world class company that partners with
the international petroleum industry to enable Ghana find and develop oil and
gas resources for the benefit of the people of Ghana as well as our partners
who share in the exciting expedition.” This has ensured that the Ghanaian
government not only gets money from its shares in the oil fields, but also is fully
involved in the oil’s exploration and drilling.
The Ugandan government
should also use the revenues it gets from oil to fund demonstrable social
projects that benefit society; by giving priority to the most under deserved
communities like the Ghanaian government has tried to do. In a recent interview
in a local newspaper, Mr. Bob Ken, a Ghanaian Lawyer, and Governance and
Management Analyst noted that “people’s expectations can be best managed by
building infrastructure like roads, health centers and school and setting up of
hi-tech industries to provide employment opportunities and to improve the
standard of living.”
Other lessons that Uganda can
learn from Ghana include;
- Sensitize masses about the oil sector since they anticipate some “rapid and unrealistic expectations” in economic growth like the way it has been done in Ghana to avoid social unrest.
- Develop methods and policies that control oil
revenues for instance The Petroleum Revenue Management Act
(PRMA), which was passed by Parliament and assented to by the President of
the Republic of Ghana in April 2011 to avoid mismanagement of public
funds.
With the above few strategies, Ghana has enjoyed praises when it comes to managing its oil sector. I am therefor certain that Uganda can pick a leaf or two from this, to avoid the natural resource curse!
