Oil Industry | The politics of Oil in Uganda
Juan Pablo Parez Alfonso, a founder of OPEC complained in 1975: “I call petroleum the devil’s excrement. It brings trouble. Look at all the waste, corruption, and public services falling apart. And debt we shall have for years.” There is an adage about wealth and democracy that goes, “the more well-to-do a nation, the greater the chances it will sustain democracy.” This literally means that oil rich nations with large oil deposits should shine for beyond all other as beacons of democracy and freedom. “Are oil rich nations really doomed to autocracy and inequality?” “Among the world’s top oil exporters, only Norway and Indonesia can be realistically described as democracies. While others like Nigeria, Russia and Venezuela demonstrate a mere semblance of freedom, Schubert states.
The idea that oil resources might be more an economic curse than a blessing began to emerge in 1980s. From 1965-1998, in the OPEC countries, Gross National Product per capita growth decreased on average by 1.3%, while in the rest of the developing world, per capita growth was on average 2.2%. Today, oil constitutes 30% of total exports revenues in some 34 less developed countries and none can be classified as democratic.
This trend should obviously defeat all logic, but only if consideration is not given to the genesis and cycle of internal conflict within oil producing countries. In this model, oil resource is the spark and fuel for long running conflict. On the one hand, for any opposition force to destabilize a nation, it attacks the main source of income i.e. the oil producing region. Secondly, once in control of these regions, either fully or marginally, the resources are then utilized to finance the rebellion, hence creating a perpetual cycle of conflict.
Angola for example, is Sub-Saharan Africa’s second largest oil producer after Nigeria. Recently discoveries suggesting it could soon become the largest. But the 1999 UN Human Development Index placed Angola at 160 out of 174 countries. Angola, by all standards, should have a thriving economy. Instead it suffers from incessant internal conflict, with massive proportions of national wealth unaccounted for, and the well being of the population seemingly not being a priority to the government.
Sudan’s seemingly endless civil wars perhaps the largest running conflicts in Africa, also explain this phenomenon. Since oil began flowing from the Government controlled Heglig and Unity oilfields, which lie uncomfortably close to the battlefields in the war-torn south, there has been an escalation of the conflict in the Sudan. It also explains why the south has failed to become a fully independent entity and peaceful state.
South Sudan’s nascent oil industry and reserves are estimated at as high as here billion barrels. Countries that depend on oil for revenue bask in wealth, but overwhelmingly suffer what the economist has termed a, “Poverty of Policy”. The Ghanaian Chronicle of 28 February 2008 explores this phenomenon in an article titles, Nigeria’s resource cures.
In Nigeria, an oil wealthy state is a rich country with desperately poor people. Despite its massive earning from oil, 70% of its estimated 140million people live below the poverty line. More than 80 million Nigerians live on less than 1 SUD a day, in a country that has earned 340 billion dollars from oil since the 70s. Nigeria is ranked 144 out of 146 by the Transparency international Corruption Perception Index (CPI) 2004. It is therefore right to state that Nigeria’s oil wealth has failed to generate development and rather only produced and rather only produced deep rooted corruption as the bedrock of internal policies.
So, where does Uganda stand in all this being a new player? There is a great disadvantage, unless the country guards vigorously against the problems faced by the majority of oil producing countries. There are signs that the oil curse prophecy may be proven true. Although a new entrant among Africa’s oil producing countries, Uganda has seen tension rising over the Island of Rukwanzi in Lake Albert. The tiny Lake Albert Island has already become an area of contention between Uganda and the Democratic Republic of Congo (DRC).
The Island lies in the Albertine Gorge which is the foremost area of recent oil discoveries. It also lies along the disputed 160 km long border of Western Uganda and the DRC. Although the Island is barely 3 km wide, it is strategically located as a base for oil exploration, which has been ongoing for several years. Hostilities broke out when a Canadian Heritage Oil expatriate worker was shot and killed on 4 August 2007 by the Congo soldier.
Further more, though there is a belief that projected revenues from oil shall rescue Uganda from external budgetary support. However, this may well come to naught. The key to economic independence, regardless of increased resources, will be a commitment to fighting corruption.
Uganda is advantaged in that oil discoveries have come later rather than earlier. The country needs to learn from the mistakes made by other countries and make the most out of this opportunity.
