13 October 2011

Uganda: Ensure Oil Find Does Not Destabilise Kampala


Oil companies have been in East Africa in search of deposits and it was good news when they finally found large fields in Uganda.

But the issues emerging from Uganda are demoralising to say the least because it appears that like in other countries, politicians have started to line up for oil wealth.

This raises questions on whether Uganda is actually prepared to handle this wealth and prevent a situation like the one bedevilling the Nigerian delta.

Nobody wants East African country to create oil fat-cats at the detriment of the larger populace, and we don't want the economy to suffer from the Dutch Disease Syndrome - an economic phenomenon that leads to the de-industrialisation of oil producing nations.

It is a pity that Uganda is starting on the wrong footing. It is important that the country's Parliament unite to force the Executive to come clean on accusations that it received millions of shillings from the oil companies.

President Yoweri Museveni should not only delay Tullow's planned sale of stakes in local oil fields but should make sure that necessary laws are passed to safeguard commercial interests.

It should not be forced to agree on the sale of stakes to Chinese group CNOOC and French giant Total for about $2.9 billion before putting its house in order.

But the worst is allegations that Museveni may have received payments from Italian oil firm ENI in return for Heritage Oil's exploration rights. Of course, Museveni has dismissed the allegations as "absolute rubbish" and described the Tullow Oil official Andy Demetriou who reportedly made the claims as an "idiot".

The bottom line is that there are bitter fights over the oil fields in Uganda.

There are also cases filed in London and arbitration efforts have not borne fruit.

Besides these, there are also reports that some Cabinet ministers accepted huge pay-offs from foreign oil companies.

While implicated officials have stepped aside to allow for investigations, we feel that Uganda's handling of the expected oil boom is both amateurish and immature. It looks unprepared for a post-oil future that could steer Kampala into conflict.

Like Nigeria, Gabon and Angola, this nation might face the curse of oil if Museveni does not handle the emerging issues like a statesman.

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