Opinions

Opinion: How Uganda’s Oil Resource is Headed for Tragedy

By Brian K Katabazi

Following the commercial discovery of oil amounting to about 6.5 billion barrels in Uganda, the country was ranked by the World Bank as the world’s hottest inland exploration frontier with 1.4 billion barrels believed to be recoverable.

With hopes to have the first oil drop from the ground in 2020, a hive of activity has since happened and continues to happen.

These developments include but not limited to local content, issuance of exploration and production licenses, crude oil pipeline, the oil refinery and establishment of the petroleum fund.

The Ugandan government has since taken over land totaling to 29.7 square kilometers for the construction of the oil refinery in Buseruka. This acquisition of land by the government however, led to displacement of thirteen villages where more than 6000 people had been living and deriving their livelihood.

Farming activities had to eventually stop, as families could not rely on their harvests any further. The displacement also forced children to drop out of school since buildings had to be closed in anticipation of the refinery.

As the country continues to near the production stage (perhaps in the near future), a series of projects have been launched and are ongoing to facilitate production, distribution and extraction.

These projects have been highly characterized by massive eviction of people including women and children to pave way for the developments that are taking place in the oil rich area.

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Another unfortunate incident that is as a result of oil development related activity is the disputed land in Rwamutonga where approximately 250 families were involuntarily displaced after settling there for more than six decades by a certain businessman who claimed rightful ownership.

The displacement was intended to pave way for the construction of a waste treatment plant.

For more than two years, over one thousand people are living in an Internally Displaced People’s Camp with no hopes of regaining their land and facing challenges associated with living in a camp, especially absence of stable sources of income.

It is also on record that seventeen children died and a figure of above ninety people has suffered from severe malnutrition while living in the camp.

Despite the 2017 ruling by the then resident judge of Masindi district Justice Simon Byabakama that 53 of the 250 families were illegally evicted, no single family has been restored back to their land. This level of impunity is worrying and drives us to a resource curse tendency.

According to Friends of the Earth – France, Tilenga and the East African crude oil pipeline projects are expected to affect close to 50,000 Ugandans of which the biggest number will constitute farmers.

The organization has gone ahead and revealed that close to 5,000 Ugandans have so far been evicted for the development of the Tilenga project (The Tilenga project is the main Centre-piece of the oil projects).

This has triggered certain groups including Africa Institute for Energy governance to file lawsuit against TOTAL claiming that the multi-billion company forced people to sign compensation agreements.  This has since left the evictees suffering and currently starving with no help.

With the establishment of the National Land Policy, the Land Act and Uganda being party to other human rights treaties, respect for human rights is shrinking at a terrible pace.

The above-mentioned acts of involuntary eviction violate the constitutional provision and right to individually/ collectively own property and protect human rights amidst key developments in the oil and gas industry.

With these gross and massive evictions, this clearly depicts how Uganda’s oil resource is slowly but surely turning into tragedy.

Despite all these unfortunate incidents that have been surrounding Uganda’s oil and gas industry development, some revenue has been generated and deposited on the petroleum fund that was established after the amendment of the Public Finance Management Act in 2015 and came into effect in March 2015.

The fund was established to act as a depository for all revenues generated from petroleum and all related activities including incomes accruing to government.

It was also clearly stipulated that all disbursements from the Fund must go through appropriation to either the consolidated fund or to the petroleum revenue Investment reserve account and must be used only to finance infrastructure and development projects.

However, with clearance from the cabinet, in the last three financial years, the Minister of Finance was able to transfer 770.3 billion shillings from the petroleum fund to the consolidated fund but accountability of the transferred amount of money is not clear up to today.

While the statutory role of the petroleum fund is very clear, a story published by Daily Monitor indicated that Parliament appropriated money to finance what Ministry of Finance officials referred to as “spending pressuresm”.

This raises questions about the governance of the oil money.This comes at a time when the country has not yet started production to full capacity but remember that the practice that one exhibits in the early stages determines even what the future holds for them.

If the people entrusted to manage the petroleum fund cannot account for the oil money when the figures are still small, then how sure are we, as Ugandans that they will transparently govern and manage bigger figures in future?

This also reminds me of the remarks that were raised by one of the speakers at the Executive Training on Extractives organized by Great Lakes Institute for Strategic Studies (GLISS) in 2018 concerning how Uganda is prepared to manage the oil resource for the benefit of every Ugandan.

I must say and remind those entrusted to manage our natural resources that countries like Norway that have benefited from the natural resources have exhibited the highest level of transparency and respected the existing governance laws, policies and human rights and hence call upon them to follow suit.

 

The writer is the Associate Director, Centre for Energy Governance.

 

 

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