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How will Uganda’s share of the proceeds from oil be divided up and spent?

President Museveni’s administration has outlined its broad priorities on many occasions.  Following the example of Norway and some other oil producing countries, part of the revenues will be placed in a Petroleum Fund {INSERT LINK TO GLOSSARY TERM} for overseas investments, in order to protect Uganda’s economy from the adverse effects of a domestic spending boom, and to save some of the money for future generations. Part of the revenues will be invested in infrastructure projects in Uganda to aid general economic growth and diversification. The priority areas for investment are:

  • Energy, including electric power generation and transmission
  • Road and railway upgrading and construction
  • Agricultural irrigation schemes
  • Science and technology capacity and training

Whilst in broad outline this appears to be a reasonable plan, sceptics doubt whether a government that has presided over so many corruption scandals will be able to implement these policies without considerable leakage and wastage of funds.

Another area of possible contention is the division of oil revenues between central government and local governments in oil-producing areas.  The Ministry of Finance currently appears to favour a 7 per cent ceiling on the amount allocated to local governments. Some localities are likely to see this as inadequate. It may also be seen as a departure from the decentralisation policy of ‘bringing services closer to the people’ which was the theoretical justification for the multiplication of administrative districts in recent years.