Ugandan oil debate: Demanding transparency before oil becomes a curse

Oct 26th, 2011 2:39 PM UTC
By Suzane Muhereza

Uganda belongs to you

There has been an unprecedented show of unity in Uganda’s parliament, as opposition and pro-government ministers of parliament (MPs) have joined together to demand a temporary halt in the completion of oil agreements until an independent regulator is established. This move was prompted by a collective sense of suspicion about Production Sharing Agreements (PSAs) signed between the Ugandan government and two oil companies, the Italian firm ENI and the Irish company Tullow Oil. Ugandans had hoped that the emerging oil sector would help to create jobs, improve infrastructure and boost the economy. However,as the government continuously refused to make public the details of PSAs, suspicions grew that ordinary Ugandans were not going to benefit from the emerging oil sector.

“Et da munneh,” a public service announcement on corruption from Africa.

Calls for transparency

The united front between opposition and pro-government MP’s in Uganda is due to the fact that citizens on both sides of the political spectrum insist that there should be more transparency in the oil industry. A Ugandan civil society coalition on oil issued a statement on October 25 congratulating and associating all Ugandans with “those Members of Parliament who remain steadfast in demanding transparency and accountability in the exploitation of our oil and gas resources.” Citizens believe that they have a right to know about the deals that their government is making to sell their country’s oil. Access to oil PSAs would enable civil society organizations to push government, firstly to insist on a fair price for the country’s resources, and secondly to ensure that the nation’s oil revenues go into the budget process where they can be effectively invested in poverty reduction rather than being used for personal gain. The Ugandan Attorney General claims it is the oil companies that insisted on the confidentiality of PSAs. However, Tullow Oil, a member of the Extractive Industries Transparency Initiative (EITI), has previously posted its agreements with Ghana on its website and claims that it cannot publicize Ugandan PSAs without the consent of the host government.

The unfolding events in Uganda illustrate the importance of transparency in minimizing the effects of the “resource curse” seen in many African countries. A lack of transparency in relation to natural resource revenues enables leaders to become increasingly autocratic in their relationship with the public and political opponents. This is a pattern that has been seen in other oil-producing states. Ugandans and those MPs who represent their interests are keen to ensure that Uganda does not follow the same route, stating that they “want to first see transparency and accountability before oil turns into a curse.” Greater transparency would enable citizens to hold their government to account, to ensure that revenues are spent in the public interest.

International support

Citizen demands for transparency in the Ugandan oil sector are complemented by work at the international level. This includes the Extractive Industries Transparency Initiative, and legislation introduced in the US in 2010 and just yesterday in the EU that will require extractives companies – and logging companies in the case of the EU legislation –- to publish details of their financial activities for every mining, oil, gas and forestry project in every country in which they operate.This initiative will provide citizens with information they need to hold their governments to account for the use that they make of natural resource revenues.Transparency is a tool to reduce the corruption and illicit financial flows that rob many African countries of the resources that they need to make faster progress on poverty reduction. ONE has played an important role in pushing for these pieces of legislation, working as part of the Publish What You Pay coalition.

TAGS: Corruption, Policy News, Transparency, Uganda