Norway warns East Africa against abuse of oil revenue

He said transparency, checks and balances were the only avenue through which gross misuse of revenue from the oil sector can be detected and condensed.

Oil-rich East African countries could misuse revenues from the expected productions if stricter legal and regulatory frameworks to ensure transparency are not implemented, the Norwegian government has said.
Mr Thorbjorn Gaustadsaether, the Norwegian Ambassador to Uganda (also accredited to Rwanda), said the development of the petroleum sector in the region will require huge foreign investment, but transparency would enhance equitable distribution of resources.
“Steps must be taken to secure budget discipline, develop a more sophisticated financial and banking system and competitive auctioning processes. They must establish predictable legal and regulatory frameworks,” Ambassador Gaustadsaether said while closing the East African Oil and Gas forum yesterday.
He said transparency, checks and balances were the only avenue through which gross misuse of revenue from the oil sector can be detected and condensed.
This comes after the Office of the Prime Minister is currently undergoing investigation into the mismanagement of billions of shillings meant for the rehabilitation of northern Uganda that saw most donors retract aid.
“No East African state is fully compliant with the Extractive Industries Transparency Initiative, which aims at building critical trust in the ability of governments of this region to handle the oil and gas resources on behalf of its people,” Mr Gaustadsaether said.
He also lauded the concerted efforts by the government to rectify the OPM scam.
“Promises of huge amounts of milk and honey to flow from the oil and gas sector are often made. Expectations are sky high, yet the enormous development needs are well-known and glaring,” the ambassador said.
He added: “The risk of disappointment, frustration over missing the revenue party is high, as is the risk of rising tension and conflict.”
Late last year, Norway among other European countries suspended any disbursements to Uganda government institutions after $13 million in donor funds was misappropriated.

musisif@ug.nationmedia.com