Suruma suggests referendum should determine expediture of Uganda oil money

Kampala, Uganda | THE INDEPENDENT | Former Finance Minister Prof Ezra Suruma is proposing a referendum to determine how the oil revenue should be utilized.

According to Suruma, this is one of the ways Uganda can achieve social protection which involves preventing, managing, and overcoming situations such as poverty, poor health, illiteracy, and others that adversely affect people’s well-being.

Suruma made the proposal while giving a keynote address at the social protection national dialogue at Hotel Africana in Kampala on Tuesday. He said through a referendum, the people of Uganda can be asked if they would like to receive shares in a permanent fund that would grant them the right to gain directly from the fund’s earnings.

He said, that with that fund in place, all citizens would benefit from the country’s oil wealth and would be allowed to participate in the decision on how to allocate it.

According to Suruma, the people’s fund would then provide social protection covering pensions, orphans, people living with disabilities, the unemployed, the aged, and other economically vulnerable groups.

Prof Suruma said Uganda needs to borrow a leaf from countries like Norway and Alaska in the United States of America where people have a say in the expenditure of oil money. The people of Alaska, in 1976, voted to create the Alaska Permanent Fund and commit a portion of mineral wealth to it.

According to the Insider news website, the Alaska fund is grown through investments, and in June 2019, was valued at $66 billion, with the earnings reserve portion valued at $18 billion. The people of Alaska get dividends as a result of their shares in the fund.

To Prof. Suruma, the decision on how to spend oil money should not be left exclusively to civil servants, if it is to be distributed equitably and shielded from corruption. He said when people get shares in the fund, they can decide on the leadership of the fund, demand accountability, and also decide on the sharing of the revenue between the government and the people.

Currently, Uganda runs a Petroleum Fund established under section 56 of the Public Finance Management Act (PFMA), 2015 as amended. This is where funds from petroleum activities are to be deposited. According to the Act, the petroleum revenue is to be used to finance infrastructure and development projects only.

However, there is concern over the management of the fund. In 2020, a Bank of Uganda report indicated that the fund’s revenue had dropped from 304.6 billion shillings in June 2019 to 87.7 billion shillings in June 2020. The following year 2021, Parliament found that the Bank of Uganda did not receive a cash flow plan and that the money was withdrawn in a lump sum.

In May 2021, Amos Lugoloobi who was Parliament’s Budget Committee Chairperson also noted the absence of a clear workplan for 200 billion shillings the House had approved as an appropriation from the Petroleum Fund to partly finance the 2021/2022 financial year budget.   Prof. Ezra Suruma is hence proposing a fund in which people shall have a direct say on how it is run and funds utilized.

Angella Kasule Nabwowe, Programs Director at the Initiative for Social and Economic Rights said the government should stop wasteful expenditure on trips abroad and national events, the unaudited tax exemptions that deprive the country of revenue and also develop a well-executed progressive taxation system to ensure equity in taxation. She emphasized the state’s obligation to provide social protection to Ugandans.

Dr. Mohamed El Munir A. Safieldin, the UNICEF Representative to Uganda also called for the redistribution of resources to ensure equity among the population. He observed how some members of the public enjoy a lot of privileges from the government while the general population struggles to make ends meet. His view is that some of the privileges should be redistributed to allow access to a bigger population in Uganda.

Dr. Munir also said that children form a large percentage of vulnerable people in Uganda especially now in the aftermath of a global pandemic, the COVID 19 which left scores of teenagers impregnated and other children subjected to labor. He said any plans for social protection should bear closely the needs of the children of Uganda.

The Second Deputy Prime Minister and Minister of East African Affairs Rebecca Kadaga called upon the different players to continue the discussion on how to achieve social protection for the entire population. She said proposals such as the Oil fund need to be discussed, likewise others.

The dialogue was organized under the theme “Investing in social protection across the life circle”.

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