The Independent Uganda: You get the Truth we Pay the Price
One-man show
It is common knowledge that President Museveni’s home, State House, is a one-stop centre for investments in Uganda. Investors go to the Presidents directly when they want a deal although the country has a host of institutions—Uganda Investment Authority, ministry of trade among others—that should deal with these issues. The institutions only deal with peripheral issues.
In the past, oil company officials praised Museveni’s one man show claiming it made it easy to do business in Uganda. But they too are getting frustrated by the lack of an institutional framework for the sector since their oil spool got stuck nine months ago in February when main explorer, Tullow Oil, sold two-thirds of its interest for US$ 2.9 billion in readiness to start production. Only Museveni appears to have all the answers on how and when production can go ahead and he has been tight-lipped.
This prompted the MPs insistence that the one-man show ends.
“If Museveni does not want institutions,” Odonga Otto, who also sits on the oil forum argued, “let him (also) dissolve URA and let ministry of finance do the collection of taxes…”
It is not only MPs; the concern among ordinary Ugandans has been that oil is very technical sector and decisions must be informed by experts and not ministers or the president.
“The qualification required for one to become minister is senior six,” Odonga says “how can you trust such a person to deal with licences with people from Washington.”
The MPs say the tendency for President Museveni and his close associates to run the show since oil was discovered in 2006, had led the country to lose billions of money in botched contracts, unpaid rent fees, taxes and royalties, and outright bribery and corruption.
Uganda is yet to resolve a tax dispute with Heritage Oil, a company that sold its assets to Tullow at US$1.4 billion and fled without paying US$404 million in capital gains tax. As a result, Uganda has spent over Shs 10 billion pursuing the company in a London court.
Critics say if Uganda had experts drafting the agreements between the government and Heritage Oil, such arbitration would not have ended up in London. But apart from Heritage, the government is also in a tax dispute with Tullow Oil over its US$2.9 billion farm-down to Chinese Offshore Oil Company (CNOOC) and Total.
To the MPs, a National Petroleum Authority could reverse this predicament as it would have powers to grant and revoke licences. The President would still hold sway by appointing the authority board with parliamentary approval.
The government responded with an array of countries that are usually quoted as the poster-child of good oil sector management, including Norway, to show that in all of them, the minister or the executive grants and revokes licenses. Ghana, on which Uganda has benchmarked most of its practices, is not quoted that often because there, it is the Petroleum Authority that wields this power.
A question of trust
Henry Bazilla, the chairman Civil Society Coalition on Oil and Gas, speaks for many when he says President Museveni does not want to cede these powers because he wants to control the oil like he controls the economy, the army, and everything.
“We do not trust him,” Bazilla says, “It is bad practice to trust an individual with a resource that has potential to lift Ugandans from the doldrums of poverty to some civil status.”
Winnie Ngabirwe of Publish What You Pay Uganda Chapter hopes that having the authority will make the licencing process and the sector at large more transparent.
“Having about seven people making the decision is better than having just one,” Ngabirwe says, “all the seven will not agree and there will be very many opportunities for information to leak and enable us to hold them accountable.”
But Dickens Kamugisha, the executive director, African Institute of Energy Governance, oil authority or not, nothing will work with Museveni in charge.
“Whether it is passed or not,” Kamugisha says, “it is not very relevant today with this government where the president influences almost every institution, the benefit will be in the long run when Ugandans can stand up against such leaders and demand accountability.”
To make his point, he names other ineffective authorities like the National Environment Management Authority (NEMA), and Uganda Forestry Authority (UFA).
“More swamps and wetlands are being cleared when NEMA is there than when it wasn’t,” he says, “more forests have been cleared when UFA is there than when it wasn’t. We can only hope that our parliament keeps progressing and is able to hold these institutions accountable,” he says.
The Bill also provides for the commissioning of petroleum infrastructure.
The government already pushed through a clause that criminalises disclosure of information by former employees of the envisaged regulatory Authority, forbidding disclosure for up to ten years. However, Bazilla says that this clause passed because of an already existing draconian law, which he hopes will in future be dealt with.
Museveni too has eyes on the future. In several speeches, he has vowed not to abuse oil money and to use it to transform Uganda into a first class country and crush anything that stands in his way. To secure the oil resource, he dispatched Special Forces, an elite group of the Uganda People’s Defence Forces headed by his son, Brig. Muhoozi Kainerugaba, to the oil region.
He also used the first money to come out the sector, to buy fighter jets because, he said, he needed to shield the sector from attack. Museveni has always got his way around parliamentary stubbornness; the question is what he will do with the power over oil that he covets, now that his minister has got it.
