19 March 2013

Uganda: Public Finance Bill May Jeopardise Petroleum Sector


On January 31, 2012, Sarah Mitanda, on behalf of First Parliamentary Counsel, wrote a letter to the Cabinet in relation to the Certificate of Compliance by the First Parliamentary Counsel in respect of the drafting of the Public Finance Bill, 2012.

It must be recalled the role of parliamentary counsel begins with the conception and the birth of an Act of Parliament. It is their primary function to express legislative policy in a language free from ambiguity.

This Public Finance Bill which is currently under discussion by our 9th Parliament intends inter alia to ... establish the petroleum Investment Fund... provide for the establishment and management of the Petroleum Investment Reserve.

Be that as it may, my area of keen interest is on Part VII of the proposed Public Finance Bill, 2012 which Provides for Petroleum Revenue Management. My views hereunder are based on the fact that Legislative drafting is an intellectual labour requiring hours of intellectual concentration, planning and strategy. Requests for legislation come with urgent, immediate flags. Far reaching constitutional amendments may be done over the counter. All this involves time and concentration.

Clause 63, (8) provides that, "the Bank of Uganda, may, in accordance with the procurement laws, appoint an external investment manager to manage the investments of the petroleum Investment Reserve". I am of the view that this is a very contentious position and such a person should be appointed by the Advisory Committee in consultation with BOU. The rationale being that, the Investments Manager is a person who will be mandated to manage Uganda's resources and it loses meaning if he is appointed without proper approval of the Committee

Clause 66(1) provides also that, the investments Advisory Committee shall consist of five members who shall be appointed by the minister. Since this is an advisory committee, I have a view that the number should be extended to eight so that it can include the External Investments Manager, the line minister and Governor Bank of Uganda as Ex-officials. The rationale for Investments Manager is that, since he is already mandated to manage the Petroleum Investment Reserve, it would serve no purpose for the committee to come up with ideas which may be unjust to the institution. All in all, making him/her part of the committee would avoid future loopholes to suffice.

Clause 66(4),(c) provides for an instance where a person may not be eligible to be a committee member and to be certain it says ...is unfit for office. I have strong feelings that this sub clause is too wide, which may cause future problems within Uganda's legal jurisprudence in case one member is aggrieved on this particular issue. Hence in order to save time for the Constitutional Court in future to define and determine, what amounts to a person who is unfit for office, the framers of this Bill should clearly define a person who is unfit for office.

Clause 70 (1) of the same Bill, is to the effect that ..."the Bank of Uganda shall for each financial year prepare an annual plan for the Petroleum Investment Reserve and submit it to the minister for approval". With due respect, the loophole with this proposed clause is that, it excludes the fundamental role of Petroleum Advisory Committee. I suppose that, Bank of Uganda should not submit this report to the minister for signature without it being perused and agreed upon by the committee. One question that arises would be, why have such a committee and then make it irrelevant to matters that it should be actively engaged in. I am also aware that Clause 67(e) provides that the Investments Advisory Committee shall advise the minister on ..."any other matter the minister may request advice on". This gives discretion to the minister, hence he or she can either consult the Committee or not. In order to give proper breath and guidance to the Petroleum Investment Plan, the framers/patriotic agitators of the Bill should make it a sine qua non (condition precedent) for the Plan to be prepared by BOU and submitted to the line minister subject to approval by the Petroleum Advisory Committee.

Lastly, I wish to say that whether my words are wise or foolish, they should be adhered to since this is what democracy entails so that we don't make costly mistakes that may jeopardise the petroleum sector of Uganda in future.

The writer is a lawyer and Works with En Legal Consultants

Copyright © 2013 New Vision. 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 publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.