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Uganda Joins EITI; to Disclose Oil Contracts, Revenues

The Extractive Industries Transparency Initiative (EITI) Board has approved Uganda’s application to join the EITI, making it the 54th member country and the 26th in Africa.

EITI is the global standard for transparent management, accountability and good governance of petroleum and mineral resources.

Uganda’s membership to EITI comes at a time when the final investment decision for the oil project is in the offing.

EITI implementation will require Uganda to publicly disclose information such as oil contracts, beneficial owners, revenues and payments, including payments related to the environment.

These disclosures can in turn promote public oversight and debate.

Uganda’s Minister of Finance, Matia Kasaija, said the decision to join the EITI was informed by the appreciation of the value of transparency as Uganda progresses its plans to develop Uganda’s natural resource wealth.

“We believe that this initiative has the potential to strengthen tax collection, improve the investment climate, build trust among sector stakeholders and help create lasting value from our mineral and petroleum resources,” he said.

Participation in the EITI is identified in the Government of Uganda’s 2012 Oil and Gas Revenue Management Policy as an action that will help create lasting value from oil and gas revenues.

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Proven reserves of over six billion barrels of crude oil have been identified in Uganda, of which 1.4 billion is currently deemed to be recoverable.

Total and China National Offshore Oil Corporation (CNOOC) are active in the region and share an interest in license areas in the Lake Albert development project.

Transparency

If managed responsibly, expected oil revenues can contribute to national development plans such as infrastructure and social services.

EITI Board Chair, Hon Helen Clark, welcomed Uganda to the EITI community, saying it can “help lay the foundation for transparent and accountable management of the country’s natural resource wealth.”

Transparency is key to ensuring that potential revenues from oil and gas production are not mismanaged or lost to corruption.

As a part of the EITI sign-up process, Uganda formed a multi-stakeholder group (MSG) in March 2019, composed of government, industry and civil society representatives.

Civil society advocacy has been an important part of Uganda’s journey to join the EITI.

“Civil society has advocated the operationalisation of the policy objectives of joining EITI since the promulgation of Uganda’s National Oil and Gas Policy in 2008 and the Petroleum Revenue Management Policy in 2012,” said Onesmus Mugyenyi, Deputy Executive Director of Advocates Coalition for Development and Environment (ACODE) and a civil society member of Uganda’s Multi-Stakeholder Group.

“It is therefore our pleasure to see that government has followed through with this policy commitment. EITI implementation provides an opportunity for deepening transparency and accountability in the management of Uganda’s oil, gas and mineral resources. I pledge our total support and commitment in ensuring that the EITI works for Uganda.”

In the wake of the Covid-19 pandemic, increased competition for investment underscores the need for transparency.

While Uganda’s oil industry is still nascent, Total, a founding member of the EITI internationally and a partner in the Lake Albert Development Project, sees only benefit for Uganda in committing to the EITI.

Writing in support of EITI implementation, Total E&P Uganda – an active participant in Uganda’s Multi-Stakeholder Group – underscored the importance of contract transparency in contributing to a transparent and accountable sector.

“We look forward to working with government, industry and civil society partners to support EITI implementation through participation in Uganda’s Multi-Stakeholder Group,” said Total E&P Uganda’s General Manager Pierre Jessua.

Uganda’s initial disclosures in terms of the 2019 EITI Standard will need to be made within 18 months of being admitted as an EITI implementing country.

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