Let’s not fret; here are four things more important than oil

The thing about public conversations is that they tend to get our tongues wagging before we even analyse the issues properly. Rarely do we stop to assess the facts. And so it has been with the news of the eminent ‘departure’ of Total and CNOOC. These are the international oil companies – IOCs the guys who speak that lingua call them – that have been prospecting (sic) and preparing to drill and extract oil from the Albertine Graben.
Because of the prolific growth in the number of ‘experts’ on these matters, a whole new language usually sprouts around the subject matter. Mundane things like the place where the oil is found are called a graben (a valley with lakes). Selling your oil field is referred to as a ‘farm down’. Others talk of ‘EPC’ and FID. When I last checked, EPC simply means engineering, procurement and construction. FID is final investment decision. It is this FID animal that has tongues wagging the most. Because government and the IOCs (there I go) have not agreed on something called CGT (capital gains tax) or another such like animal, the former have ‘decamped’. Should genuine investors in Uganda be worried?
In my humble opinion no. While oil may give us a finite advantage and boost our economy, there have always existed, (and still exist) critical and strategic things in which we can invest to build a more inclusive and stable economy. Long before the prospect of drilling and commercially mining the ‘sweet crude oil’ (there I go again) became a possibility, these opportunities did exist and managing them better may actually make the awaited EPC and FIDs of these world more meaningful for us as a nation in the final analysis.
The first of the four things on my mind is food, as in agribusiness. First and foremost we are an agricultural country with a probably disproportionate amount of arable land (50 per cent of East Africa’s provision). We have the potential to be the breadbasket of sub-Saharan Africa. If we are not the breadbasket of the region, what are we smoking? Why do we think we can do oil better than agriculture?
Second is affordable human shelter. There is a housing deficit of 600,000 units (2018). About 160,000 of this backlog is in urban areas. Kampala alone has a housing deficit of 120,000 units, depending on whose statistics you are reading. Uganda’s population of 44 million (sic), which is growing at a rate of 3.3 per cent per year, is projected to increase to 63 million by 2030. With a rapid rate of urbanisation, it is estimated that two decades from now, Uganda will have a housing shortage of close to eight million units, of which 2.5m will be in urban centres and one million in Kampala. The key issue here is in what type of housing and for whom are we investing?
Third on my list is health. With a growing population, investment in tertiary health becomes more critical with each passing day. While we have managed to largely address the issue of primary health care, our population is going to need better health care in respect of the non-communicable diseases of tomorrow’s middle class. Investing in health is a great way to grow any investor’s capital.
Fourth is education. All societies are aspirational and Uganda is no exception. A growing population, once well fed, housed and healthy will thirst for knowledge. As we move into the fourth industrial revolution, yesterday’s skills are going to become less and less relevant. As one writer has noted, the illiterate of the 21st Century will not be those who can’t read and write. Rather it will be those who can’t unlearn and relearn. Investing in education is a smart thing.
The IOCs may leave, but we are going to need more of the above four things tomorrow. As always, the devil is in the detail.