Oil sector: Without law, joining transparency body won’t help

In March 2019, cabinet approved the proposal to officially join the extractives international body known as the Extractives International Transparency Initiative (EITI). This is an international body that was formed by former British prime minister Tony Blair in 2003 to promote transparency and accountability in governments in the management of oil resources. The government followed this by instituting a Multi Stakeholder Group (MSG) as one of the requirements to towards joining the initiative as a candidate country.
Uganda is now at the level of candidate country and intends to formally apply for consideration in October, after which it will be reviewed and formally be admitted into the body as a compliant member state. Whereas we all appreciate the commitment as a good step in the right direction, we should not be excited that a voluntary commitment without an enabling law will compel government to toy the line as many examples among African countries have shown as many countries, especially African countries, continue to misuse and plunder public resources mainly from oil and gas to benefit a few, being EITI members notwithstanding.
Many developing countries have joined EITI simply because they do not aim at solely promoting accountability of oil revenues, but want to leverage political acceptability and be seen as transparent while public resources are misused. Most of the states in Africa joined EITI after president George Bush instituted what is known as the Millennium Challenge Corporation in 2004 to attract large US grants that was benchmarked on a country’s performance indicators, including good governance. This also determined a country’s access to international aid in terms of loans and grants from international agencies such as IMF and the World Bank.
This partly explains why poor, but resource-rich countries like DR Congo, Nigeria, and Guinea, among others in Africa that joined, are more corrupt and oil revenues have not trickled to benefit the masses despite being members of EITI. Research has also shown that such countries that depend on aid are the ones that are eager to join yet rich-resourced countries that depend less on foreign aid such as Norway, Canada and USA are not EITI compliant states.
Recently, the State Minister for Minerals, at a symposium on multi stakeholder dialogue organised by ACODE, revealed that joining EITI will curb corruption and ensure transparency in the mining oil sector what the minister forgets is that, everyday there are tales of corruption spread across.
For instance, how will EITI stop a government that withdrew Shs200b from the Petroleum Fund in March 2019 without Parliament’s approval to finance the 2018/2019 Budget deficit, yet this was in total contradiction to Section 58 of the PFMA enacted in 2015 . This further violated Section 59(3) of the PFMA, which provides that oil revenue will only be used for infrastructure and other development purposes only.
The Shs6b presidential handshake given to 42 government officials in August 2016 shows that national laws will not be respected when it comes to using oil revenues for consumption. This contravened Section 59 of the PFMA, clearly demonstrating that, our government has no respect for her established laws. Such a government cannot be trusted to comply with EITI principles which are voluntary in nature. Whereas Uganda enacted the Access to Information Act, most of the oil agreements have remained secretive hiding under non disclosure clauses.
Going forward, therefore, is to appeal to government to not only enact an EITI Law, but also respect and implement the available laws and regulations if joining EITI is to promote transparency and accountability in the management of extractive resources.
Mr Agaba is a resource Economist - Africa Institute for Energy Governance
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