Tax oil inquiry exposes how easily oil revenue can be mismanaged

Karoli Ssemogerere

What you need to know:

  • The third model we have in Uganda is a “weak-fund” model. A “rainy-day” fund so to speak. It operates on an illusion that government in its wisdom can decide when to “raid and rain” for the public good.
  • The good people at Bank of Uganda have little more to do than smile and execute banking instructions initiated by the ministry of Finance. And the so-called parliamentary approval where necessary can be procured retrospectively after the fact.

In professional circles, when we describe a fund as nothing more than a special purpose account, eyebrows are raised. It’s popular to describe a fund in more glamorous terms, buildings, people, structures and policies.
The Uganda Petroleum Fund has turned out to be just another checking account opened by the Ministry of Finance in Bank of Uganda. It carries a shilling and dollar denomination. The principals as is the case with government accounts may only draw on it with parliamentary approval, but these approvals run within the gamut of hundreds of appropriating lines in the budget that they are subject to mischief.
In the case of the Petroleum Fund, it has now come to light that the revenues collected so far are highly drawn. Last year, government sought to withdraw most of the rest to meet an expenditure shortfall in the works budget to complete Hoima-Kaiso-Tonya road. Is it time to look at other models before running the fund becomes a major mischief.

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