What does the discovery of oil in Kenya mean for Uganda?
The debate on oil in Uganda has been more spectacular in recent years. Available information indicates that the presence of oil deposits in Uganda was first confirmed in 2006, in the Albertine region, in the west of the country, by Heritage Oil, a British international oil and gas exploration, development and production company. . Another discovery followed in the Amuria district in eastern Uganda earlier this year (2012). However, the parallel discovery of oil in the Turkana region of northwestern Kenya created a moment of dilemma. In the clear sense of purpose, it required knowledge of the future prospects for oil exploration in the country and other parts of the oil business.
Once production capacity exceeds demand in the local, regional and international markets, the country’s bargaining power will decline as much as prices and labor rewards. The situation forces employers to relieve workers or even to create conditions for industrial stoppages and instability in the country, given low job satisfaction. In addition, there will be serious losses recorded by parents, financial institutions and the government after failing to find the ultimate goal of retaining as much income as possible for the prosperity of their people to offset the costs of training their local experience in production. oil and administration. The resulting economic turmoil and backlash eventually threaten national security, which in turn makes political authorities uneasy. It will be in such circumstances that the discovery of oil will seem more fatal indeed than not.
The indigenous population of the area prided itself on having oil deposits in their midst. They had to quickly look for percentage profit guarantees for rapid development and, probably, regain their glory, as one of the most economically powerful people in the country. Unfortunately, pride has become illusory as the prospects for economic dominance spread to a broader region of Africa. Some of the profits made so far from oil companies are significant, but could soon depreciate. Such benefits include: scholarships for higher education in oil and natural resource management, compensation money, and health facilities. Concern to ensure the sustainability of these community programs may also cease. The same pride and disappointment was certainly shared by the rest of the nation.
The already existing cancer of corruption has already spread to the nation’s oil economy. Ethics and integrity in all aspects of business operation are never issued for consideration. Licensing of oil companies, land grabbing, poor profit-granting system (the wrong people benefit), and oil governance leave the nation aggrieved. These vices began to damage the oil production process early on, which alone predicted failure. With economic uncertainties and anxieties looming, corrupt officials are even busier with what they do best. That is, diverting oil revenues and demanding bribes from oil companies as much as they can, privately, before the sector collapses. The same officials had recklessly run the economy with a view to saving their political faces by using the country’s resources so that they could later make up for losses using ‘outstanding’ oil revenues. Now, with the discoveries of oil wells in other parts of the region, it brings even greater shocks and misery to the nation.
Regional dominance and global focus of the master player may be the only savior of the country in such circumstances. You could use those attributes to further your financial interests. Fortunately, at this time, Uganda has a great influence in the region and internationally. You will only have to strengthen the existing balance of power and the situation on the world stage. But in doing so, some countries may emerge to claim or reclaim regional leadership as well. For example, Tanzania was once a regional leader under Mwalimu Julius Nyerere (RIP) – you may want to regain your regional position. If that happens, the conflict of interest could lead to a regional security crisis, in which flashes of wars would establish new positions of power and, ultimately, new economic positions.
And while Uganda’s regional influence counts most in winning and dominating the oil market in the region and on the world stage, it clearly has no experience to further its credentials as an oil exporter. It has to depend on foreign experience at this time. Even the current plan to install a regional refinery to ensure maximum oil profits faces a great challenge for the country. With much local and international dislike for political and economic corruption reflected in donor countries, it can be very disconcerting for potential foreign investors to trust the country’s business environment. In addition, there are many options in the region and Africa in general. So-called investors might be reluctant to invest in Uganda, where there has never been a successful oil production experience, where poor governance is reflected in oil production, and where the country is at risk of security breaches, with a preference for the most predictably secure economies.
However, if the countries of the region cooperate on oil production, management and trade issues within the framework of the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), price stability of oil and the national economy could be guaranteed and maintained. for the benefit of the population. This is because there would be freedom of movement, common decisions on prices and profits, and preferential treatment for traders operating within the regions. As is already the case, staff from oil companies will move to work anywhere in the region or job seekers could choose to apply and work in any of the member countries. Generally, by doing so, the threat to the peace and security of the regions, highlighted above, would be brought under control. The Ugandan government has already shown great wisdom in its preliminary work to facilitate regional integration and strengthen the existing structures in these regional bodies.
It will also be important to maintain a vibrant agricultural sector, without which not even the oil plants would survive; since they would need food and energy to support labor needs. Food must be produced regionally to increase affordability and accessibility for the wider population. Understandably, if the burgeoning oil business continues to offset food production, famine or high food prices could be the order of the day. Also, inflation will increase the cost of production and reduce savings. Therefore, it will be irrational to specialize in oil production and forget about agriculture, which explains well our history of economic survival.
Generally, the Ugandan government has for a long time neglected the development of appropriate and renewable technologies, investing little energy and financial resources in research and innovations. It just waits at the end of the road for the sweat and achievements of individual citizens to claim it and later consider it their own; arguing that it created the conditions of peace for that person or persons to prosper.
It is widely believed that the discovery of minerals such as oil never happens without some form of colonialism manifested through the invasion of multinational companies in any of those countries. For some time, the authorities have coincidentally expressed great desire for them. Multinational companies are often tracked down to oil-producing countries by the economic security agencies of their respective governments. And because these companies come from different countries, they begin to fight for the favors of the indigenous authorities. If the authorities of the day lose favor with any of them, the affected country uses its military resources to overthrow the authorities in preference to one (generally the country’s local opposition) that will defend its economic objectives. Countries like the Democratic Republic of the Congo (DRC) and the former Sudan have already gone through a similar cycle.
In fact, the discovery of oil in Kenya creates a dilemma for Uganda. This requires more sophisticated means to carefully manage the resource, so that it still meets the hopes of the country and avoids unnecessary economic and political shocks. Among them are the strengthening of regional and international cooperation efforts and the promotion of rational and pro-citizen or pro-nation foreign investments. While this is happening, it is also important that the country is aware of the important benefits of investing in agribusiness and of supporting research and innovations.