The price of oil in Uganda and South Sudan
For decades Uganda depended on agriculture for the bulk of its revenue, but with the oil discovery in the west of the country in 2006, citizens expected the financial windfall to improve the standard of living. But now, six years later, many doubt whether the average Ugandan, surviving on US$1 a day, will ever benefit from the oil-induced boom.
Gabriel Katabazi, a resident of Kanungu district, November 25.
We shall not benefit from this oil discovery,” said Gabriel Katabazi, a guard at Lake Victoria Hotel Entebbe, and a resident of Kanungu district in western Uganda where oil was found. The gap between the poor and the rich will increase,” he said. The rich people are now buying land there so that they will be compensated.”
The nation’s high rate of corruption has sparked doubts about the ruling party’s ability to deliver on its slogan of prosperity for all”. There was a report that a huge sum of money from the office of the Prime Minister Mama Mbabazi was channeled into a private account. According to a report published two weeks ago in the Daily Monitor, an independent newspaper, some 50 billion Ugandan Shillings were stolen. The donor money, which came from the United Kingdom was designed to help post-war recovery in Northern Uganda and the Karamoja region. The story has further reduced the public’s opinion about the government and boosted fears that the oil money may also be taken.
Raising fears about corruption, Britain’s Observer newspaper reported a year ago that Uganda’s Parliament intended to investigate allegations that three ministers, including the prime minister, minister of internal affairs and minister of foreign affairs, were bribed by an oil company.
In neighbouring South Sudan oil is an economic lifeline, making up more than 95 percent of revenue. But it also triggers transparency issues. Like in Uganda, South Sudan has witnessed corruption in higher government offices. Earlier this year, about 75 government officials were alleged to have taken four billion US dollars. President Salva Kiir wrote a letter urging the culprits to return the money. Nonetheless, his slogan of Zero tolerance to corruption” turned out to be too little as those who stole the money did not return it.
South Sudan has a history of oil-related conflict. The peace accord signed in Naivasha ended Africa’s longest civil war, opening the door for the nation’s independence. However, at the start of the year, oil production ceased amid allegations that Sudan was syphoning off southern oil, something that Sudan argued was justified as payment for the South Sudanese using its pipe network.
A pipeline in South Sudan’s Unity State, June 17.
Clashes have since continued with the two countries subsequently battling over the oil field that is called Heglig by Sudan and Panthou by South Sudan.
The recent cooperation agreement signed in Ethiopia’s capital Addis Ababa has led to the plan of reopening the oil field and production. But the future cooperation of these two nations remains unclear as key issues remain unsolved.
Ugandans living in oil-rich areas can profit by selling their lands, while other locals benefit from employment in the industry. However, others are forcibly relocated. In South Sudan, however, those living in oil rich areas are often caught in the crossfire of antagonism between Khartoum and Juba. The areas of Byei and Heglig where oil is underground are among the hot spots. A number of reports say civilians were bombarded by airplanes alleged to originate from Khartoum, an allegation refuted by the North despite some testimonies by a UN official.
