Invest oil money in more sectors, experts tell govt

Financial experts have poked holes into the proposal by President Museveni to use the billions of oil revenues for infrastructural development only and not for consumption.

Financial experts say it is not a good idea to only develop infrastructure and leave out the social development bit of it, arguing that the two must go hand in hand.

“Our priority is infrastructure development which is running ahead of the quality of the people you are seeking to serve. For those who have traveled, you have seen scenarios where a road is built to improve market access for agricultural products but instead, the people are drying cassava and millet on it,” Mr Patrick Katabazi, the coordinator for the Uganda Parliamentary Forum on Social Protection, said in an interview last week.

He added: “You move for very long distances and no vehicle has passed you carrying anything and yet the road is primarily used for drying. The reason here is yes, you have an okay road but the capacity, the quality of the people in the community, and their capacity does not fit into this good infrastructure that has been set up.”

Mr Fred Muhumunza, an economist and a Makerere University Economics lecturer, said the oil money should be used to clear the staggering national debt that the country is grappling with.
He said the bigger part of the debt accrued because of developing the said infrastructure.

“There are debts to address, yet infrastructure projects may not be ready. We don’t want to borrow because we have money. If the policy is to use oil money strictly for infrastructure, we must consider future borrowing needs carefully.” he said.

Issue
According to the Auditor General’s report, as of June last year, Uganda’s national debt stood at about Shs96.1 trillion. Of this, Shs44.6 trillion is domestic while Shs52.8 trillion is from foreign sources.

Mr Julius Byaruhanga, the director of policy advocacy at the Private Sector Foundation Uganda (PSFU), said the money should also be used to develop the innovation and science sector, which he said has become an important area of everyday life.

Last month, President Museveni in his remarks during the reading of the budget, assured the country that when the oil money eventually starts to come, the whole of it will be channeled to infrastructural development. 

“This oil money will never be used for consumption. It will only be used for infrastructure and science development. Therefore, strategic items like the railway and irrigation will be funded by us directly,” the head of state vowed.

Uganda’s first oil drop is expected next year.