20 January 2016

Uganda: How Presidential Candidates Plan to Manage Oil and Mining Resources

A review of the different manifestos of presidential candidates reveals that many of them want greater transparency and accountability in the management of oil and gas resources.

Dr.Abed Bwanika wants to give 30 percent of oil proceeds to the oil-producing regions.

Eight candidates are contesting for the country's top seat namely; the incumbent and NRM's Yoweri Museveni, FDC's Kizza Besigye, Farmers Party of Uganda's Benon Biraro and independents; Amama Mbabazi, Prof. Venansius Baryamureeba, Maureen Faith Kalya and Joseph Mabirizi.

Uganda has so far discovered 6.5 billion barrels of oil and 500 million cubic feet of natural gas in the Albertine rift. In addition, the country has huge deposits of iron ore and copper mainly in the West, phosphates, limestone and gold in the East and prospects of uranium and rare earths in several parts of the country.

In his manifesto, Dr. Kizza Besigye commits to ensuring transparency in the collection, management and utilization of revenues from oil, minerals and other natural resources.

Besigye explains that once elected, his government will ensure free flow of information on the extractives sector right from government officials and oil companies to ordinary citizens. "Uganda will also participate in the major transparency and accountability initiatives such as the Extractives Industries Transparency Initiative (EITI) and the Open Government Partnerships," the manifesto reads in part.

He also proposes to create appropriate mechanisms that increase the oversight of parliament and civil society over the operations of public sector agencies and private companies engaged in the management of natural resources or natural resources-based enterprises.

While campaigning in Buliisa district early this month, Besigye further pledged to establish a judicial commission of inquiry to investigate land grabbing in the Albertine rift and place a moratorium on land transactions until the inquiry is complete.

On his part, President Yoweri Museveni, acknowledges that minerals have a great potential of contributing to economic growth and poverty alleviation through job creation. Although he does not make policy proposals relating to extractives in his manifesto, Museveni boasts of creating a strong foundation for the management of oil and gas and other natural resources.

He explains that his government has already enacted the Petroleum (Exploration, Development and Production) Act, 2013, that establishes the Directorate of Petroleum, the Petroleum Authority of Uganda, and National Oil Company; as well as the Petroleum (Refining, Conversion, Storage and Transportation) Act, 2013 and the Public Finance Management Act, 2015 that establishes institutional and administrative safeguards for the management of oil revenues.

Publish what you pay, earn and spend

Prof. Venansius Baryamureeba says that once elected, his government will ensure transparency and accountability in the sector. "My government will ensure that oil revenue is anchored on the principles of "Publish What You Pay" - oil companies disclosing the revenue payments they make to government; "Publish What You Earn" - the government disclosing the revenues it receives from extractive companies; and "Publish What You Spend" - government publishing its budget expenditures," reads his manifesto.

He argues that it is through transparency that citizens will be able to hold their government accountable. "In order to improve on the transparency of the oil revenues, my government shall sign up to EITI with the aim of improving the investment climate through the audited disclosure of revenue payments," the manifesto reads.

In addition, Baryamureeba also pledges to ensure contract transparency, mainly through ensuring that the public has the right to access Production Sharing Agreements (PSAs).

John Patrick Amama Mbabazi, former prime minister and now independent candidate, is not specific, only listing broad proposals. "Our government commits to promoting the extraction and processing of our minerals for the benefit of all miners, the communities in whose land the minerals occur and the economy in general," his manifesto reads.

He pledges to fast track the establishment of new mines and revamp existing ones. He indirectly expresses support for the controversial refinery project explaining that his government will refine enough oil in Uganda to ensure that the country does not import petroleum products. He adds that his government shall encourage the establishment of new industries from petroleum products such as asphalt and tar, lubricating oils as well as insecticides and fertilizer.

"All communities affected by the land acquisition for the refinery in Hoima will continue to be compensated for loss of economic activities and livelihoods on top of being paid the land rates at the prevailing market prices," reads Mbabazi's 'Go Forward' manifesto.

Thirty percent share

Dr. Abed Bwanika of the People's Development Party (PDP) says his government will share oil proceeds with the oil producing regions. "We want to ensure that 30 percent of the oil should stay in the region where it is produced so that the people can benefit from this resource," pledges the PDP manifesto.

This means his government will have to amend Section 75 of the Public Finance and Accountability Act, 2015 that sets the criteria for revenue sharing. Under this Act, the central government retains 94 percent of royalties from oil, 6 percent is shared amongst local governments of the oil producing districts, and cultural institutions in the oil producing districts receive 1 percent of royalties.

However, Maj. Gen. (rtd) Benon Biraro of the Farmer's Party of Uganda disagrees, saying his government will not offer preferential treatment to oil or mineral rich regions. Biraro who campaigned in Hoima district recently, said he believes in equal distribution of national resources and therefore, he wouldn't offer any oil royalties to oil producing regions. "You can vote or leave it but I can't deceive you that I have a special offer for regions with oil or minerals because every region has something special it contributes to national income," he said. He said he would rather lose votes than lie about oil revenues.

Maureen Faith Kalya, another independent candidate told Oil in Uganda in a phone interview that her government will focus on promoting local content and ring fence certain jobs for the host communities. "My government will use the United Arab Emirates (UAE) model and make sure that we manage our resources ourselves," she said. She added that her government would "not allow the Nigerian situation here" and promised to grant more power to cultural leaders in the oil rich areas to oversee the management of oil revenues.

Report by Edward Ssekika

editor@oilinuganda.org

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