Uganda is on the right track to make oil benefit citizens

Doris Atwijukire

What you need to know:

Transparency. Demonstrating a national commitment to EITI by government sends a clear signal to Ugandans and all other stakeholders that government is serious about the transparent and accountable payment and receipt of oil and mining sector revenues. Because for Uganda to be listed as being “EITI compliant”, it must meet a series of internationally agreed criteria on improving transparency.

By now, you are probably aware that the government of Uganda has finally committed to join Extractives Industries Transparency Initiative (EITI), a global standard for transparency in the oil, gas and mining sectors that ensures that natural resources benefit all citizens.
The initiative will promote systems that enable oil and mining companies operating in Uganda to publish what they pay to our government and in turn, government will publish what it receives from the companies. This methodology for monitoring and reconciling company payments and government revenues will ensure that our natural resources are managed with the highest level of transparency and accountability.

This is because it will identify potential discrepancies between payments and receipts and investigate and address the underlying causes.
The Government of Uganda has from the onset been positive towards the adoption of the EITI standard of ensuring transparency and accountability in the extractives sector and especially in as far as the novel oil industry is concerned.

In 2008, a National Oil and Gas Policy was passed by the Parliament of Uganda. In this policy, several commitments were made by the government, one of which was the commitment (Clause 5.4/Objective 6) to adopt the principles of EITI as a strategy to ensure the collection of the right revenues from the industry and use them to create lasting value for the entire nation.

Despite the existence of such a defining policy and the commitments therein, the process toward adopting EITI has been slow since then. In addition, some government officials on a couple of occasions have been quoted as saying EITI is a foreign initiative that has no relevance to the management of Uganda’s extractive resources.

Besides, Uganda has laws that are sound enough to ensure the proper management of revenues from the oil industry when it takes off. Therefore, we want to applaud government on this key milestone. Transparency is widely recognised as “a necessary element of any effort to promote the responsible management of natural resources for growth and economic development.”

Uganda’s oil sector presents a great opportunity for the country to diversify its revenue sources and to attain middle income status as aspired by her Vision 2040. Ugandans also hope that their lives will improve when the country begins generating the estimated $3 billion in revenues per year from the oil upon full scale production.
According to the Public Finance Management Act 2015, oil revenues must be invested in infrastructural development projects and job-creation and not consumption.

Also the Act allows some oil revenue to be moved to the Consolidated Fund and gives the executive powers to borrow up to 10 per cent of domestic revenues from the Consolidated Fund before parliamentary approval, making oil revenues vulnerable to consumption rather than investment.
However, the above noble objective will only be achieved through strict checks and balances. Remember that already trillions of shillings of petroleum revenues have been realised through capital gain taxes, but no one knows how it was spent and its accountability.

With the EITI initiative, there are high expectations with hope by majority Ugandans that the oil revenues will be used to address the challenges facing the citizens, including unemployment, lack of quality education, poor health services, poor agricultural practices, poor road networks and in general the poor living standards of majority of Ugandans.

Demonstrating a national commitment to EITI by government sends a clear signal to Ugandans and all other stakeholders that government is serious about the transparent and accountable payment and receipt of oil and mining sector revenues. Because for Uganda to be listed as being “EITI compliant”, it must meet a series of internationally agreed criteria on improving transparency.
Adopting EITI will also provide a basis for follow up on public engagement. By clearly stating what has been paid to different government agencies and in some cases at local level, citizens will be able to hold those agencies to account for how these revenues are then used in public expenditure programmes.

This will ensure that a greater portion of revenues generated from oil and mineral resources are used to benefit the local people. And where there are unaccounted-for funds or company underpayments, EITI will enable citizens to demand and hold government and companies accountable.
The one thing clear is that there is limited awareness among the Ugandan public and especially the relevant stakeholders pivotal in the process, about the EITI.

Civil society organisations should therefore come out and raise awareness on what EITI initiative is and what it means to Ugandans. It should be made known by citizens that it is their role to ensure government implements EITI for transparency and accountability in the management of revenue from the Oil and other resources.
This will accelerate poverty alleviation among the citizens, overcome corruption and enhance economic growth and development in our country.

Ms Atwijukire is the programme officer, Civic
Response on Environment and Development (CRED). [email protected]