Michael Wakabi
4 March 2005
Johannesburg — THE spread of democratic principles and increased privatisation has made east Africa increasingly attractive to investors, which bodes well for tapping Uganda's high potential for striking oil, the second East African Petroleum Conference heard this week.
But, while political risk had decreased in the region, it still needs to create viable mechanisms for the management of future oil revenues.
The meeting, which opened on Wednesday, was attended by representatives from regional governments, oil multinationals and indigenous oil producers, as well as geoscience institutions and petroleum services companies.
East African Council chairman Hirji Shah told the conference that the economic liberalisation that had seen governments on a privatisation drive was creating a more level playing field, while continuing democratisation was reducing overall political risk.
"Investors in the oil sector should come to the region because regional integration is creating a stable and predictable environment, and controls that could hinder the development of the private sector are progressively getting out of the way," Shah said.
He said that although infrastructure was still inadequate and corruption was lessening only slowly, there was political will to fight graft.
In prepared remarks, Ugandan President Yoweri Museveni said that viable mechanisms for the management of future oil revenues should be put in place now if the region was to escape "the contradiction of its oil finds becoming a source of social discord and embarrassment".
"The very poor management of revenues from petroleum has become a rather embarrassing issue in Africa. It has become so bad that when an African country discovers oil, it is considered a curse in many circles," he said.
Museveni said the key strategy should be to build a good institutional framework for managing oil revenues, and to create transparent investment programmes where oil revenues could be used for social upliftment.
He said that with conflicts in the region largely contained, and democratic governments buttressed by constitutional regimes running the three East African Council partner states, political risk to business was minimal.
With east Africa consuming 4,2-billion litres of petroleum products a year, the market risk for investors in the oil sector was minimal, the conference was told.
Be the first to Write a Comment!
Copyright © 2005 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
