Kampala — UGANDA will not export crude oil but have it refined to maximise returns from exploration. This was announced by President Yoweri Museveni at the Organisation of Islamic Countries (OIC) first business forum in Kampala yesterday.
"I have held a meeting with companies producing oil," he told the over 500 delegates from 57 Muslim countries.
"They wanted to build a pipeline. But I told them there will be no export of crude oil from Uganda. We have to refine it here."
To thunderous applause, he added: "If they want to build a pipeline, the oil can stay here. After all, it has been here for the last 20 million years."
Opening the business forum at the Imperial Royale Hotel in Kampala, Museveni called on the delegates to invest in Uganda, especially in processing local materials.
"OIC members have benefited from exploration of petroleum and gas and accumulated financial surpluses which can be invested in Uganda so that we expand our GDP," he said, urging them to assist each other to achieve common prosperity.
Turning to his pet subject, the importance of value addition, the President said the GDP of OIC countries was much lower than countries like Japan and South Korea which have no natural resources.
Japan, he noted, posted a GDP of $4.2 trillion and South Korea $1.2 trillion last year. In comparison, Saudi Arabia, the biggest exporter of crude oil, which produces nine million barrels per day, recorded a GDP of only $564b, while Libya has a GDP of $74b.
"Finished products fetch more money and create more jobs than raw materials. OIC countries like Uganda, that is rich in agriculture, have made the same mistake of exporting unprocessed raw materials."
He told the forum that Uganda had recorded some successes in quota-free access to markets in the US and the European Union and urged the OIC to have similar arrangements.
"The OIC has a combined market of $5 trillion. If we had trade preference agreements among states, it would be a big boost."
Museveni commended the proposal for the construction of a railway link from Dakar to Sudan but noted that there was also need for an 'Equator railway', linking Mombasa to Kisangani.
He reiterated that Uganda's problem was lack of markets for its food due to unfair competition from European and American farmers.
"This problem is caused by the EU and US, bribing their farmers to farm in form of giving them subsidies."
Earlier, Prof. Ekmeleddin Ihsannoglu, the secretary general of the OIC, had said Uganda would benefit from the Dakar-Port Sudan rail project. He urged member states to sign and ratify protocols on preferential trade within OIC member states.
Ahmed Dagher, the chairperson of the National Bank of Commerce, and Zaitun Olive Kigongo, the president of the Uganda National Chamber of Commerce and Industry, flanked the President on the dais.
The forum, under the theme: 'Discover the resources and high potential of the African market', was also attended by foreign minister Sam Kutesa and state minister for regional cooperation Isaac Musumba. It is a prelude to the 35th Islamic Conference of Foreign Ministers, which takes place from Wednesday to Friday at Speke Resort Munyonyo.
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This is definitely the way forward for African countries. It should not be that countries with the resources benefit the least from them. African countries need to invest in development of skills that would enable them to deliver the Value Add activities
It was a shallow comment by a president who who secretly negotiated the terms of the Oil Exploration and Production. the terms odf the deal remain a secret. Question number one: How much signing bonus was paid (not reported per standard prsctice), What happened to it? Question number two: Uganda petroleum fiscal regime is Production Sharing Agreement (PSA). How much royalty will the Producer Pay at the top and in what form - Cash or oil? How will the Profit Oil be shared - in Barrels of Oil or Cash equivalent? Is the Producer restricted from selling his oil in the international market? There are many intricacies in the Uganda Minerals / Petroleum Legislation and the PSA which make the president's statement empty unless the audience is privy to the letter of the agreemenrt. further what is taking Uganda so long in establishing a National Oil Corporation to oversee the terms of the agreement and to participate in the Oil activity and consume technological know-how transfer. Most countries have a National Oil Company way before exploration comences = even if they do not have potential oil discoveries eg- India, China (CINOPET), Japan (JNOC) etc. P.S. Why did DRC cancel the concession of Tullow and or Heritage Oil who had concessions on the other side of Uganda in the DRC? Mr. Prseident beware the company you keep - some of these are wolves in sheeps clothing!!!
Its about time someone sees the reality. Africa should by now understand that exporting raw materials has really not changed our lot and never will. Only when we develop the infrastructure and produce the finished good will we be in a position to hire our people, demand what we want for the things we own. Africa has enriched the rest of the world. Its time we turn to ourselves. I hope the rest of the continents will now take a break and reformulate their policies so that all countries do the same. Africa cannot get any poorer than it is for stopping to ship raw materials. We need to focus internally and begin trading with each other. We have the market as everybody else sells to us materials that more likely than not originated from Africa.
It is corruption stupid. Refining oil in Uganda wont solve the corrosive corruption. Africa needs clean, uncorrupt and democratic governments that accountable to the citizens - not oil refineries.
For a change, Mr Museveni, I agree with you. Africa should not be in any hurry to run out of oil. There are better uses for oil than burning it. Make sure you get your barrel's worth for any you sell. And get as much of your fuel as you can from renewable resources. Most of your troublesome aquatic weeds can be made into ethanol, and some into food.
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