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Tuesday 22nd May 2012, 1:23 UTC
Home

UGANDA’S NASCENT OIL INDUSTRY: Corruption and Poverty

Journalism Student: Stellah Monday, 2 January, 2012 - 21:01
Oil Rig
Source: Google images
Oil Rig

UGANDA’S NASCENT OIL INDUSTRY: Corruption and Poverty

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Submitted by Stellah on Mon, 02/01/2012 - 9:01pm

Kaiso Tonya, a far flung outpost in Western Uganda is a remote village with sleepy rhythms. The village is part of the Albertine region, where vast deposits of oil were found estimates putting it close to two to three billion barrels.

The locals here are largely illiterate, and have not gotten any tangible benefits since the oil firm Tullow started exploring for black gold in 2006.

Now in the place of hope lies trepidation for this local community that depends on fishing in Lake Albert for a living.

“The fish stock is depleted in the lake and the oil firms have not given us jobs,” said Abdu Kalisa, a resident of Kaiso Tonya.

“We are not educated at least they [oil exploration firms] should give us potter jobs,” said David Mugurusi, a local opinion leader.

“There is also fear that we could be evicted from our land,” said Agnes Kabasita.

This is the gloom picture that I captured on a visit to Kaiso Tonya, about 60 km from Hoima town in western Uganda, two weeks ago.

Most of the local community here is bound by the shackles of poverty.

Without electricity and water, the locals here are grateful for at least the un-tarred road that was graded so that the heavy trucks can hurtle down the narrow and steep road to transport equipment on behalf of Tullow.

Tullow has also constructed a community dispensary and a block of teachers’ quarters.

CORRUPTION

However, beyond the ‘small gifts’ from Tullow as part of their Corporate Social Responsibility, the community in the albertine region continues to grope in darkness ignorant of what exactly is happening in Uganda’s nascent oil industry.

They accuse their representatives in the National Assembly of barely returning home to brief them about any developments.

Yet its not only here where there is exasperation.

The country for years has been writhing in the throes of the oil conflict. Only this month, lawmakers in Parliament tabled a dossier accusing a powerful cartel of senior ministers of pocketing kickbacks from Tullow worth millions of dollars.

The Prime Minister, Amama Mbabazi, was accused of receiving funds to lobby for oil production rights on behalf of the Italian oil firm ENI, which eventually lost its bid for exploration rights to British firm Tullow Oil.

Along with Mbabazi, Foreign Affairs Minister, Sam Kutesa, and Internal Affairs Minister, Hilary Onek, are both accused of taking bribes from Tullow Oil worth over US$23 million and $8 million respectively.

President, Yoweri Museveni, however has revealed that the documents were investigated and found to be forged.

A parliamentary ad hoc committee has been established to investigate these allegations, but the whole acrimony, accusations and counter-accusations in Uganda’s National Assembly underlines the murkiness of the oil sector.

NO PUBLIC PARTICIPATION

The public rarely participates in any debate, MPs were denying oil sharing agreements and the Executive remains dogmatic taking arbitrary decisions in the reward of contracts without consulting Parliament.

Museveni’s elite army, the Special Forces Group under the command of Museveni’s son Col. Kainerugaba Muhoozi guards the oil well in the Albertine region.

Insiders claim that anyone who is zealous and knowledgeable is ‘paid handsomely’ to silence him from revealing the truth.

Today Uganda’s economy is in a tailspin and the current inflation by the end of September was at a staggering 28 percent.

However many citizens hope the discovery of oil will transform Uganda’s ailing economy and create a sizeable middle class. But there is fear that a predatory and corrupt regime could use the oil revenues to sustain an opulent lifestyle.

NRM

When the ragtag National Resistance Army (NRA) captured power in 1986, the West hailed President Yoweri Museveni as a breed of the new leadership that would take Africa to the lofty heights.

Museveni managed to transform Uganda’s economy from the backwaters, reduce poverty levels and restore a semblance of peace in a country that has experienced bouts of anarchy since independence from its British colonial masters in 1962.

In stark contrast, Museveni today appears like a fallen angel. His regime is corrupt and most of those accused are his cronies and important cogs in his government.

He dispenses patronage through a bloated Cabinet. In 2006, he broke the unwritten credo appointing his wife as a minister and in 2011 he roundly defeated his fiercest rival Dr Kizza Besigye garnering 68 percent against 29 percent to be re-elected.

However Besigye accused Museveni of using dollops of cash to buy votes especially in the rural countryside where poor voters were bribed with salt and sugar.

He has since then promised to transform the country into a middle economy by 2016 arguing Uganda’s oil revenue ‘will not be used to buy champagne and perfumes but spent on the construction of dams, roads and railways.’ Uganda plans to build a refinery at Buseruka near the Albertine region and commence oil production in 2014 with a capacity of 20,000 barrels per day.

Economists in the country agree that a rehabilitation of Uganda’s moribund infrastructure and the construction of more dams can accelerate growth. But this can only happen if corruption, the country’s Achilles heel is controlled. However some political pundits in the country fear that oil could be used to entrench Museveni’s regime.

“Oil has not started flowing yet and government has not yet started receiving revenue so we cannot speculate about that. But if we use hindsight there is always a fear that the black gold can give the political class an opportunity to buy off political opponents,” said Dr Philip Kasaija, an international law scholar at Makerere University in Kampala.

He cites the 2005 incident when Museveni handed a shs 5 million bribe equivalent to 1136 pounds to each lawmaker to influence their decision to lift presidential term limits. The country now waits with bated breath to see whether the revenue earned from the oil production will trickle down to the common man.

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