Uganda’s Hopes in Extractives Sector Lie in EITI [opinion]

Uganda has high expectations in the extractives sector, especially with an addition of oil and gas resource to the basket of the abundant mineral resources. However, these hopes can only be realised if the country agrees to sign up to the Extractive Industries Transparency Initiative (EITI). The EITI is an international standard for transparency in extractive industry payments and receipts. In countries participating in the EITI, companies are required to publish what they pay to governments and governments are required to publish what they receive from companies. For Uganda, only Tullow Oil Plc has done so.

The ministry of Energy and Mineral Development recently conducted a two-day consultative workshop at Speke Resort Munyonyo to review the mineral policy, law and taxation.

This is in addition to the highly-geared second edition of the Uganda Mining, Energy, Oil and Gas conference and exhibition scheduled for May 20 and 21 next year. Uganda Chamber of Mines and Petroleum, in partnership with the Energy ministry, is organising the 3rd Mineral Wealth Conference, 2014, scheduled for October 1 and 2, 2014. Its theme is: “Uganda’s Transformation: A New Era in Mining”.

These and other efforts are an indication that the extractive industry is taking centre stage in the governance of Uganda’s political economy. We appreciate that the Uganda government has interested itself with full force in investing in extractives resources. This is one way of enhancing its resource envelope to improve the standard of living for Ugandans and reach out to the poorest of the poor.

Hitherto, Uganda deliberately undertook the Sustainable Management of Mineral Resources Project (SMMRP), from 2008 to 2012, with financial and technical support from World Bank, African Development Bank and Nordic Development Fund. Under this project, the government undertook geo-surveys and mineral resources assessment in which it identified potential mineral target areas for exploration and development.

According to official records obtained from the Energy ministry, since 2012, more than 726 licences in mineral development and mining have been issued, up from 100 in the previous ten years. This means that Uganda’s prospective bases have increased over time, hence expanding the extractives sector as well as increased payments in terms of revenues from, so far, the concessional licences.

This will add onto the projected value of the 3.5 billion barrels of oil so far confirmed from Uganda’s additional golden resource, estimated to have so far contributed $2.4bn in foreign direct investment (FDI). The growing positive expectations and needs of the sector with the growing well-intentioned ideals of government, as stipulated in both the National Development Plan (NDP) and Vision 2040, need to be insulated by both the national and international bulletproofs.

This should be through signing up to EITI. Definitely, it is in the interest of government to see that Ugandans are getting out of poverty and enjoying services. That alone will earn the government support and, therefore, the next term in office. The EITI campaign benefits government more than the activists, especially CSO representatives and passionate individual campaigners.

In order to support government to spearhead the translation of natural resource wealth into better development for the local citizens, the EITI becomes the key centrepiece of the value-chain.

The EITI further increases public information, thereby empowering the public to put to task their government to account for every penny of the resource revenues, which many governments in Africa tend to fear. It also helps in enhancing revenue collection and management, for improved service delivery.

In other cases, EITI enhances opportunities for attracting investors increases trust among key players in the governance and the service delivery chain (citizens, government, CSOs, private companies and investors), and hence makes it easy for constructive dialogues and effective prioritisation. The EITI debate should, therefore, be mainstreamed in all government undertakings, including the aforementioned events and other conferences.

The author is the general secretary of Publish What You Pay, Uganda chapter, (PWUP-U).

Source : The Observer

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