Let’s protect oil revenues

Indisputably, the Public Finance and Management Act (PFMA), 2015, as amended provides a strong legal framework for managing petroleum revenues. But the same law has some loopholes that have aided the depletion of the Petroleum Fund.
The Fund serves as a depository for all revenues accruing to government from petroleum and related activities. But government has for the last three years kept using money from Petroleum Fund to finance “spending pressures.” They withdrew more than Shs700b and spent the money on ‘unspecified’ activities in the Budget.
While it’s okay to use oil money to finance the Budget, it’s perilous for government to spend oil cash on recurrent areas. It must go to things like roads, airport, railway, electricity and bridges, etc. Awkwardly, when oil money goes to the basket, it confounds matters since the Budget is funded by various revenue sources.
Disbursements should continue to be through appropriation to either the Consolidated Fund or to the Petroleum Revenue Investment Reserve Account, but the oil money must be ring-fenced for infrastructure projects.
President Museveni had promised the country that oil revenues would be consolidated into a fund that will be dedicated to infrastructure projects, developing the human resource, scientific innovation and agricultural modernisation, especially working on the irrigation system to mitigate the danger of delayed rains with a view to ensuring that farmers can do agriculture all the year round.

The Accountant General should asses the Petroleum Fund’s ability to deliver its mandate before it’s too late. Section 59(1) states: “The money withdrawn from the Petroleum Fund to the Consolidated Fund to support the annual Budget shall not exceed the amount authorised by Parliament in the Appropriation Act.”
This section should be amended to provide for a mechanism of tracking the oil money sent to the Consolidated Fund. This will ensure accountability of oil cash and align the transactions on the Fund with the key approved national aspirations.
Since there is no undisputed evidence that all the Shs770.3b went into infrastructure development, the MPs should know that it was a mistake to appropriate oil revenues without fallback position.

Parliament should be the last line of defence in the fight against any form of abuse. Oil money should be used to build a durable economic base for our country. So, shouting “aye” without taming government appetite to spend, is recipe for disaster.