In the end, the occupier will always leave

Somalia

In the last US elections the wars in Iraq and Afghanistan were major campaign issues. US president Barack Obama gave an undertaking that if elected president, American troops would leave Iraq but that troop deployment in Afghanistan would be increased. Indeed Obama has, to a large extent, fulfilled his promises in Iraq and Afghanistan. However, with regard to the war in Afghanistan voices for talks with the Taliban are getting louder and louder.

The Taliban on the other hand are spreading to more areas even though the Americans and their allies are exerting more pressure on Taliban base areas. The lesson for Somalia from the Iraq and Afghanistan experiences is that talks for a political settlement are necessary before the guns become silent. In Somalia this could have been done with the Islamic Courts but instead they were attacked and overthrown thus creating the conditions for the rise of Al Shabaab.

After the Kampala bombs President Museveni vowed to increase the Ugandan troops in Somalia in order to be able to take revenge on Al Shabaab. In this situation the wiser counsel is that “when a man is stung by a bee he doesn’t set off to destroy all beehives”. Not only is this an impossible task but it may lead to more bee stings before the adventure fails. It is prudent, therefore, that all avenues for talks leading to a political settlement should be explored rather than beating war drums. All occupiers always leave and sometimes they are forced to leave in a hurry fighting their way out.

The best contribution to Somalia would be to find ways to apply the experiences of Somaliland and Puntland in Southern Somalia. As we go into the election campaigns the UPDF presence in Somalia will be an issue on which all contending parties should express themselves.

Meanwhile, the Heritage capital gains tax payment saga continues. Pressure has now shifted to Tullow Oil as government has no more leverage over Heritage since it has no interests in Uganda anymore. Government has taken action to repossess Block 3A, which has a production capacity of about 40,000 barrels of oil a day, allegedly because Tullow has not applied for a production licence within the stipulated two years after discovering oil. This means that government can give it to any other company without taking into account the $ 1.45 billion paid to Heritage by Tullow.

This action forces Tullow to assume the responsibilities of Heritage in order retain its stake in Block 3A. It should be recalled that ENI, the Italian oil company, which had wanted to purchase the Heritage 50 per cent stake in Block 3A had actually offered to take over and pay the Heritage capital gains tax. Thus government is telling Tullow to do the same. The Tullow groveling mail reproduced in the media is mock resistance, they will eventually agree to pay well knowing that they will recover the cost as part of the of cost of oil. This is not difficult to do as the company determines what are recoverable “exploration, development, production and operating expenditures” not government. Therefore, in addition to the government assurances that the tax will be paid, there must also be an undertaking that whichever company pays the tax will not be allowed to recover it in any form as a cost of oil expense.

Secondly government should expeditiously form a state-owned oil company to assume the contractual partnernership in the Production Sharing Agreements in order to reduce unlimited liability of the country in any dispute with foreign oil investors. It is not right to treat the Ugandan state as a commercial entity of equal standing to a private company.

The writer is the FDC Deputy Secretary for Research and Policy