Uganda in midst of impending oil boom

Aug 11, 2006 02:00 AM

Uganda is in the midst of an impending oil boom as can be deduced from the number of foreign oil companies that are pouring millions of dollars into the country for the exploration. In turn Ugandans are warming up to receive billions of dollars in revenue from an impending oil boom. It is said Uganda will receive over $ 400 mm in oil revenues in the first five years of oil production.
But most oil dependent countries that have been receiving more than this amount have more often than not experienced significant development failures and in the end petrol dollars have promoted corruption and instability rather than peace and development.

Therefore, oil is a double-edged asset; it can be both good and bad. In countries such as Algeria, Angola, DR Congo, Ecuador, Gabon, Iran, Iraq, Kuwait, Sudan and Nigeria, oil revenue mismanagement has seen their real per capita incomes plummet.
I have heard some Ugandans cursing others who consciously give warnings on the prospects of oil in Uganda. They have been labelled as saboteurs, disgruntled and anti-development. But I believe that such people also have a point and their concerns have a basis.

For oil to improve the lives of the poor through increased investment in areas like education, water, roads and other vital areas, the government must put in place the necessary infrastructure and build her capacity to adequately control and manage the oil revenues sufficiently.
Debate today should centre on what policy changes we need to promote the management and control of oil revenues in a way that will benefit the poor and our economy as a whole.

Most oil producing countries are the most economically troubled, the most authoritarian, and the most conflict-ridden states in the world. Dear Country men, let us concentrate on promoting, encouraging and shaping the debate on good management of the oil industry rather than grumbling.
As it stands now, if Uganda started mining oil today, I suspect that the huge revenues would be inserted into a government lacking in transparency, honesty, fairness, accountability and a government characterised by pedestrian and inadequate planning. Consequently, oil exporters would not be in a position to use petro-dollars to help the poor.

This article was written by the policy consultant for the Africa Institute for Energy.

Source: New Vision
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