Kampala: In early 2006, Uganda announced the discovery of rich oil fields to the beat of drums and sound of trumpets. Immediately, many people said Uganda, with its epic levels of corruption, was going to fall in the deep abyss of the “oil curse”. That we would stop doing all other work, and kill ourselves fighting over oil revenues. There is some good news. Uganda may not be befallen by the “oil curse”. Rather it will have a “Congo problem” instead with the oil.
The problem with the Democratic Republic of Congo’s (DRC) mineral wealth is not that it is being stolen, and has nearly turned the country into a nation of lazy parasites. Rather, that considering how much mineral wealth it has, only a tiny bit of it is being dug up and sold. The small mines that some Ugandan crooks were fighting over some years back during our “occupation” of the eastern DRC are peanuts. Most of DRC’s wealth remains in the ground.
The DRC’s hydropower potential is so huge, if the Inga Dams were ever built to their full capacity, they could supply all of Africa and Western Europe with their electricity needs for years to come. As it is, most of DRC is in darkness.
The same thing could happen with our oil. First, the Production Sharing Agreements (PSAs) were kept secret in some big people’s mattresses. To this day, they have never been made fully public. Then there was a big fight in Parliament and in many capitals abroad about which Ugandan minister and officials had eaten a bribe from the oil production firms.
Also, the battle with exploration firm Tullow Oil over the famous $450 million capital gains tax is not about to end.
Meanwhile, we went on an oil cheering parade. We had grand speeches about how Uganda’s oil was for the “benefit of all East Africans”. The first petro dollars were supposed to be in the bank this year. Now, the timeline has been shifted to 2015.
There was a case to be made for building a refinery, because Uganda being the only soon-to-be-oil nation in the region could reasonably plan on being the East African oil supplier. Then barely a month ago, things started to change. Tullow announced the discovery of interesting volumes of oil in the Turkana region of Kenya. Then on Monday, it made a dramatic announcement – that it had found more than 100 meters of light crude oil in Turkana twice the amount yielded at the same stage of similar discoveries elsewhere in East Africa. Why is this important?
Because Kenya consumes nearly 60 per cent of East Africa’s oil products, so it was going to an immediate market for Uganda’s refined oil. Now that it is also swimming in oil, has a coastline and port – and is already ahead investing in the infrastructure to transport oil, Uganda will still be able to sell its oil, but further afield. And, depending on the economist you talk to, the return on the planned Uganda refinery will likely take longer.
By now Uganda should be selling refined fuel to Kenya and other nations. We aren’t, because our oil became like a drunkard’s land title. Many a drunkard goes around waving his title, borrowing money to buy booze and muchomo against it.
We sang, sang, about the oil, and really didn’t put money down building roads, passing the laws on disposal of waste, or setting up storage.
We wasted time as the big people were going on about how the oil belongs to the ruling National Resistance Movement. Then, it belonged to the President – because it was found while he is in State House. Then it belonged to the people of Bunyoro. Finally, someone remembered, and said it belonged to the people of Uganda.
Why, one wonders, with all the oil money we would be banking now, is Uganda’s oil not on the market. It’s the “Congo problem”. We are sitting on the oil, partly because the big people have what you might call a “sharing phobia”.
The secrecy over the oil deals and the resulting “sharing-paralysis” has left the country unable to act decisively and in an enlightened way about oil.
The big people, for too long, were too afraid to create a national oil corporation and let professionals manage this resource, because they would lose control. Now Uganda’s oil has become like a miser’s winning lottery ticket. The miser is afraid to claim his lottery winning, because he dreads having to share it with others.
Meanwhile, Kenya finds its oil; Rwanda might soon hit an oil jackpot; and Uganda’s oil could lose its shine because it is no longer the only black liquid on this side of Africa.