Mak don applauds Uganda’s oil laws

Kampala, Uganda | THE INDEPENDENT  |  Makerere University, University law Don, Joe Oloka Onyango has given Uganda’s oil management laws a thumbs up for distributing powers to different agencies charged with managing the country’s oil revenues, a move that could deter maladministration.

Reviewing Uganda’s oil legal regime for a chapter in a newly published book, Onyango said the legal regime in Uganda appears to be determined to avoid the debt trap associated with oil-producing states in Africa. But also, he says, regulation placed in different government agencies means it will be hard for one agency to mismanage the resource.

“Uganda has taken the first step towards achieving the separation,” he writes. Uganda oil laws place regulation in the hands of government and bodies such as the Petroleum Authority. Revenue collection is placed within the ambit of the Uganda Revenue Authority; custody of collected oil revenue is entrusted to the Petroleum Fund, while investment of the same revenue is in the hands of the Petroleum Revenue Investment Reserve. 

Government’s commercial interests in the oil sector is a preserve of the National Oil Company. Onyango said “this proliferation of duties is key to the de-concentration of power and a further deterrence to mismanagement.”

The book is entitled Oil Wealth and Development in Uganda and Beyond, with contributions from different experts and published by the Leuven University Press this year. The academic says the biggest challenge for Uganda is that Minister of Energy is given immense powers for the control and the overall management of the Petroleum Fund.

He describes this as “problematic.” Also, the don says, the National Oil Company is also subject to influence from the Minister who may issue instructions to it in the execution of its tasks. This can be abused, he indicates. The don says while the laws look good on the paper, Uganda’s track record suggests their provisions might not be followed.

He writes: “Given Uganda’s track record in deviating from sound policies and laws on paper to adopt the contrary paths in practice, any benefits from the positivist in these parts of the legal regime will greatly depend on the Government’s own adherence to the rules.”

Already, government has withdrawn all the money that was saved in the petroleum fund and spent it on budget without involving the investment advisory committee which should decide where such money may be invested. This is one of the indications that the laws might just stay on paper.

He calls for the tightening up of the bidding process, greater oversight of the licensing and allocation process, and a greater role for Parliament. On access to information regarding on goings in the oil sector, the academic says it is still hard for the interested public to receive it as at times government hides behind confidential clauses in agreements it signs with the operators.

Uganda has 6.5 billion  barrels of oil with between 1.4 billion to 1.7 billion commercially viable.

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