IMF to Uganda: get oil transparency sorted
Following up on recent pieces monitoring worries about the coming exploitation of east African oil (will the curse strike?), we learn from Uganda’s Daily Monitor that the IMF has called for reforms in Ugandan oil governance as the country prepares to cash in.
According to the IMF senior resident representative Ms Ana Lucia Coronel (and many other observers), oil revenue could transform or ruin Uganda’s economy and government “needs to commit itself to absolute transparency”.
“Uganda will have a lot of taxes and revenues when it starts oil production,” she says, “and as a development partner, [the IMF is] optimistic it will turn around the economy… [but] it is important to have transparency and efficiency on how to manage oil revenues.”
Her suggestion for ensuring this transparency: put all the money into a Petroleum Fund run by “a board with clear roles, to decide on how much is saved, how much is invested and how much is injected into the Budget.”
The Monitor article points out that according to Ugandan Finance minister Maria Kiwanuka, “government’s immediate priorities for oil revenues include agriculture and infrastructure development,” and while debate on a proposed Public Finance Bill (which does meet with Coronel's approval, and by extension that of the IMF) is ongoing, it has met “mixed reactions” from MPs, commentators and the public.
There’s a huge amount at stake here and we hope fervently they get this one right. As an aside, here's a link to an interesting piece on News 24 about how Malawi residents fear the discovery of oil in Lake Malawi as a potential curse "that might destroy their way of life."
Stats from the article:
According to government, the first phase of oil production will commence in 2018 with about 10,000 to 30,000 barrels per day (bpd) but will increase to 60,000 bpd.
Current oil volumes, according to the oil regulator, Petroleum Exploration and Production Department, surpass the 3.5 billion barrel mark announced in 2012 and could bring in close to $50 billion (about Shs130 trillion) in revenues. IMF expects oil revenues to boost Uganda’s Gross Domestic Product (GDP) by 25 per cent.