Uganda’s readiness for oil still in question
Pope Francis once proclaimed that “unless wealth is used for the good of society, and above all for the good of the poor, it is an instrument of corruption and death.” It is quite unfortunate that the latter is what has befallen many African countries after discovering vast amounts of natural resource wealth.
In Uganda, the discussion about Oil has majorly been premised on development, diversification of revenues, and sporadic growth of other sectors among other reasons. This has led some Ugandans into sleep as they wait for oil which they hope will change their quality of life.
Whereas Oil is no ordinary pocket change sector and has the greatest potential to magnificently change the entire economic landscape of Uganda, there lies a very big challenge of circumventing the potential pitfalls to which many oil rich countries in Africa have fallen victim.Crafting practical remedies for the problems that usually come with enormous wealth should be taking center stage so that the citizenry and Government are in position to optimally utilize the country’s oil resources.
The question in this case would be: Have Ugandans been or have they prepared themselves for this forthcoming wealth and its challenges?
Over the past two or so decades, scores of scholars all over the world have argued about the paradox of plenty that seems to puzzle many countries that are blessed with vast amounts of non-renewable resources. These resources are always seen as a ray of hope to many but years into exploration, they turn out to bring the direst of effects to the countries that own them therefore bringing plight to majority of the citizens, especially the host communities.
In Africa, the major debate on Oil discovery has always been on whether it is a bonanza or a curse and unfortunately, it has been the latter most of the time which implies that having natural resource wealth does not necessarily transform into Economic Development.
Isabel dos Santos, Africa’s richest woman and eldest daughter of Angola’s former president José Eduardo dos Santos is facing charges of money laundering and embezzlement of public funds during the 18 months she was at the helm of the Angolan state oil company, Sonangol. While at Sonangol, Isabel dos Santos amassed interests from banking to television in Angola and Portugal and in January 2013 Forbes magazine named her Africa’s first female billionaire. Findings by the International Monetary Fund (IMF) on Angola’s National accounts revealed that between 2007 and 2010 $32 billion had gone missing with most of the missing money being traced off-the-books through spending by Sonangol, $4.2 billion was completely unaccounted for and all this was happening at the expense of majority of the citizens who continue to live in abject poverty.
Uganda, the new kid on the block is no saint when it comes to mismanagement of funds as accountability mechanisms have always been restrained by corruption tendencies and yet these have direct bearing on citizens’ quality of life. According to World Bank statistics, the average income in countries with high levels of corruption like Uganda is about a third of that of countries with a low level of corruption. Also, as of 2018, Uganda’s Human Development Index was 0.528 which put it in the low human development category (159 out of 189 countries).
Inequalities caused by corruption weaken societies and make it nearly impossible for political decisions to reflect and include aspirations of all citizens. Limited transparency shrinks the space for human development which makes it hard even for the much talented to reach their full potential.
As we gear up for the much anticipated resource wealth, the challenge will lie in taming the meteoric rise in revenues. We need to learn from our sister countries that have been there and not only advocate but also participate in the establishment of strong institutions, systems and right policies that will see lasting value created from the oil resources which will accelerate growth and reduce poverty.
The writer is a Programme Associate at Global Rights Alert
As published by the New Vision