Header advertisement
Business

World Bank Cautions Uganda On Oil Revenues

musevenis_856169278

viagra 40mg http://dbkschool.net/wp-includes/class-wp-text-diff-renderer-inline.php geneva; font-size: small; line-height: 200%;”>Makhtar Diop, malady the Vice President for the Africa Region, World Bank, said recently that “every day, we hear reports of new discoveries of oil and gas in Africa – including Uganda,” adding, “we cannot miss the opportunity to translate this mineral wealth into better health services and outcomes, greater transparency, improved governance.”


Header advertisement

The former Senegal Finance Minister said “these revenues must be used to invest in people – and not just the percentage of students enrolled or the number of clinics, but the quality of those services.”


He added: “The prospect of massive hydrocarbon revenues highlights the importance of accountability – a clear social contract under which government officials serve the people, and not themselves.”


This is the latest warning from a reputable international body, cautioning government against the misuse of petrodollars.


There have been allegations of bribery of senior government officials by international oil firms for fatty contracts. The Ministers would later be exonerated after a Parliament inquiry.


Following the discovery of substantial petroleum deposits in Uganda, expectations have been high that oil revenues will lead to economic prosperity and improved standards of living.


However, experts have warned that if not handled properly, oil revenues can exacerbate the resource curse and that overcoming the resource curse requires laws and institutions that foster transparency and accountability.


Today Uganda is home to about 3.5 billion barrels of oil, with more to be discovered in the near future.


Researchers say the oil discovery has also raised public concern over whether the new resource will yield lasting benefits to present and future generations.


According to Francis Tumusiime, a researcher, there is great concern over the need to create an enabling legal, policy and institutional environment that fosters revenue transparency, ensures macroeconomic stability, and encourages effective contract bargaining and the fair awarding of concession agreements.


As a landlocked country, Uganda currently spends an estimated $600 million per year on petroleum imports, and about 23 percent of its population lives below the poverty line.


The production of oil is expected to mark an end to the importation of oil products.


President Museveni insists the oil revenues will be used to boost infrastructure development.


Good leadership


Speaking at the World Bank/Uganda 50th anniversary, Diop said “when a country has leaders who make a firm commitment, put in place the right policies, and have sustained financial and institutional support from the donor community, along with a firm social contract with their citizens, that country can go from a low equilibrium to one of higher, more sustained economic growth.”


He cited US Economics academic, Paul Collier, and others who have documented the importance of the trajectory out of fragility.


“Uganda’s experience 20 years ago inspires us today as we address ongoing fragility and conflict in Central African Republic,” he added.


Diop said the second major lesson of World Bank’s engagement with Uganda has been the PRSP process – the Poverty Reduction Strategy Paper.

He said countries formulated their own development solutions and devised those solutions on inclusive, robust consultations.


Uganda was one of the first countries in Africa to prepare a PRSP and benefit from a series of PRSCs – the Bank’s budget support instrument – the Poverty Reduction Support Credit.


“The lesson we learned from Uganda was the need for a consultative process from which to develop inclusive, pro-poor policies. The PRSP process provided valuable lessons in how to work more effectively with our country counterparts,” said Diop.


He added that when Uganda joined the World Bank in 1963, most African economies were in transition, taking charge of their economies and working hard to boost growth and make their way in the world economy.


“Over the last decade, six of the world’s fastest-growing economies were African. In fact, Africa is the fastest-growing region, second only to East Asia, and Uganda aspires to achieving middle-income status.“


Diop said this is not a question of “luck”; rather, the results reflect a sustained commitment by Uganda’s leaders and it is a tribute to their vision and leadership.


“With a more educated, more urbanized population, a new social contract is needed between Uganda’s leaders and her people. Growth alone, no matter how sustained, will not be enough.”

Advertisement
Comments

Header advertisement
To Top