New finance law to safeguard oil revenues, says government official

An oil rig in the Albertine region. A new finance management law has been passed which officials hope will help in safe-guarding oil revenues. FILE PHOTO

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Uganda is expected to start commercial oil production in 2017


The secretary to the Treasury, Mr Keith Muhakanizi, has called the enacting of the Public Finance Management Bill, a positive step towards ensuring sound management of funds from the country’s oil sector.
Last week, Parliament passed the Bill, which had been advanced by the Ministry of Finance as a reform for better management of public finances, into law.
“Those who doubt our will to ensure proper management of public finance, as emphasized by the new law, are thinking in the past,” said Mr Muhakanizi, on the sidelines of a Budgetary review conference at Speke Resort Munyonyo, on Monday.
The new legislation is waiting to be signed into law by President Museveni. The law, among others, caters for the management of revenues from the country’s oil industry.
The law will repeal the Public Finance and Accountability Act of 2003 and the Budget Act of 2001. Analysts see no likelihood of the President not assenting to the law.
Recent figures from Tullow Uganda Operations Pty Limited, one of the three joint venture partners operating in the Albertine region, indicated that government will earn $3.6 million (about Shs9.378 trillion) annually from the petroleum industry.
This is Shs6 trillion shy of the national annual budget which is Shs15 trillion currently.
Industry analysts have suggested that the actual revenues are bent to fall considering the decline of global oil prices to five year low of $67 a barrel, according to the latest statics.
However, Mr Kabagambe Kalisa, the Permanent Secretary Ministry of Energy is optimistic. “The price of crude has fallen and risen. It is part of the working of the market. What is important is that we have the commodity; crude,” he told this newspaper recently.