Maria Kiwanuka Minister of Finance

The Uganda Government attaches great importance to the optimal management of oil resources right from exploration, through production and investment of the proceeds, said Maria Kiwanuka, the Minister of Finance.

It will, therefore, insist on transparency and accountability as well as balancing of interests to ensure sustainable and inclusive management of petroleum resources as part of the transformation process of the Ugandan economy.

To promote transparency, the Government has already put in place a number of oil policies, laws and institutions to ensure prudent management of the oil and gas resources.

In particular, the Parliament has already discussed or is in the process of discussing the following legislation; Petroleum Exploration and Production; Petroleum Refining, Gas Processing and Conversion, Transportation and Storage; The Public Finance Bill 2012, which contains the petroleum revenue management framework.

Kiwanuka emphasized that dialogues between policy makers, civil society organisations, the petroleum sector operators and the general public are crucial to dispel negative myths and legends that accompany petroleum discoveries and to diffuse the distrust that ensures.

This was at a conference organized by the Economic Policy Research Centre (EPRC), Kenya Institute for Public Policy Research and Analysis (KIPPRA-Kenya), and Africa Growth Initiative (AGI) for organizing this regional forum on managing Petroleum resources in East Africa.

Kiwanuka stressed that the Government recognizes that the oil and gas sector is only part of the economy of Uganda and will be depleted. On the other hand, the other sectors such as agriculture, manufacturing and tourism are renewable.

Thus, the Ministry of Finance, Planning and Economic Development believes that, the exhaustible petroleum resources or the black gold underground must facilitate expansion of the renewable resources or the green gold above the ground.

"The revenues from oil and gas are only part of the funds required to pursue Uganda's development agenda hence the need to keep on course with economic diversification," said Kiwanuka.

"Oil and gas revenues only give the country an unprecedented opportunity to fast-track the investment agenda within a consistent macroeconomic framework and utilized on projects approved by Parliament."

Therefore, the Public Finance Bill 2012, which provides for the management and utilization of oil revenues within the broader framework of the Public Finance policies, laws and regulations will be used.

Speaker after speaker, they talked of the so-called "Oil Curse" and its challenges embedded therein, which include loss of competitiveness due to high inflows of foreign exchange and volatile commodity prices leading to inflation and loss of purchasing power.

As well as, over dependence on petroleum revenues within the overall economy and the question to ask is "What happens when the petroleum asset runs out and the non-petroleum revenue base has been allowed to fade away?"

But Kiwanuka said for the oil revenues to be spent wisely, their needs to be a public dialogue that is continuous and frank among all the stakeholders: government, petroleum sector operators, CSOs and the general public.

Savings for future generations will also not be done but Uganda would invest in infrastructure – a durable asset base that will increase access to reliable power and therefore lower the cost of transport and doing business.

It will also maintain and enhance the non-petroleum revenue base so as to sustain the economy beyond the petroleum period as well as emphasize transparency and accountability in management of the petroleum revenues.

"Accordingly, I confirm that Uganda will be ready to incorporate a regional dimension to our petroleum strategy," said Kiwanuka. "Such a strategy calls for informed discussions based on research and evidence on how best to efficiently and effectively manage petroleum resources at the regional level."

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