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Land, oil and dispossession

This overview of the connections between oil and land in Uganda was written for the second issue of our quarterly newsletter, now in print.

By an unfortunate twist of fate, Uganda’s oil and many other mineral resources lie beneath some of the poorest and most marginalised areas of the country.  According to the 1995 Constitution, the state holds these resources in trust for the people; but the great risk is that they will be captured by predatory elites, rather than used for the benefit of the people as a whole.

The early colonial era achieved the contradictory results of stitching together disparate kingdoms and communities into a single ‘protectorate’ yet at the same time embedding regional and class divisions within it.

Buganda, along with parts of Toro and Nkore, was developed as a cash crop economy, supplying cotton to the British textile industry. In these areas, after the Crown had claimed ‘vacant’ land, the rest was shared as freehold (mailo) land between 1,000 chiefs and clan leaders, whose clansmen henceforth worked the land as tenants.  This was a radical transformation of previous social and economic relations.

In the rest of the country cash cropping was introduced later and less extensively, and nearly all land remained under customary tenure, used for mainly subsistence agriculture or pastoralism. Well over half of Uganda’s land remains under customary tenure to this day.

Dispossession

Along the Albertine rift, large tracts of land were gazetted as forest or game conservation areas.

In much of Bunyoro, people were left to meet their needs from a relatively narrow corridor between gazetted land to the east and Lake Albert to the west.  Combined with the fact that the kingdom was forced to cede land to Buganda as a penalty for resisting colonial occupation (and as a reward to Buganda’s leaders for their help in bringing Bunyoro and other areas under British rule), this created a lasting sense of historical grievance.  The discovery of oil in Bunyoro could not help but bring those grievances to the fore.

Yet the Banyoro were not alone in being dispossessed. As the sun set on the British empire, many people were displaced and resettled in the process of creating national parks. In some cases entire ethnic groups were relocated, with generally dire consequences for them. This happened, for example, to the Ik people, who were removed from their ancestral hunting grounds to make way for the Kidepo National Park, and went into terminal decline.

Karamoja, already being prospected for gold and other minerals, may well now become a new frontier in oil exploration, given recent discoveries across the border in Turkana, Kenya.

Much of Karamoja’s surface land technically belongs to the state. This will likely be news, and highly unwelcome news, to the great majority of Karamajong people, who saw negligible development in the 20th century and who now risk being classified as ‘squatters’—like the Baganda tenant farmers before them—on their ancestral lands.

Land markets

Secure property rights are often said to form the bedrock of market economies—the foundation on which the rule of law is built, giving rise to general development and prosperity. This was a central argument of John Locke, the British philosopher whose thought greatly influenced the founding fathers of the United States of America. It remains an article of faith in the thinking of mainstream development economists.

Yet across much of Uganda—and many other places too—people do not see land as a mere commodity, property to be bought and sold, but as more deeply connected with their way of life, traditions and culture.  For this they are often chastised as having ‘backward’ ideas.

Uganda’s 1995 Constitution and 1998 Land Act confirmed the four kinds of tenure instituted under British rule—mailo, freehold, leasehold and customary—but government policy has been to encourage a shift from customary to freehold.  A family that has inherited customary rights may apply to the local Land Board to have a freehold title issued.

This, however, has proceeded only very slowly.  The process involves significant costs, as the land must first be surveyed and demarcated, and other community members must recognise the family’s claims. Many families, in any case, cannot see point of obtaining a piece of paper to formalise their tenure.

Yet this leaves them vulnerable to outside entrepreneurs, developers and speculators.

“Speculation is legal”

Land speculation is certainly rife in oil-rich areas but it is not illegal, a senior central government official, who preferred not to be named, told Oil in Uganda recently.

Local entrepreneurs, he acknowledged, have been buying up plots from individual farmers, perhaps on behalf of wealthy families from elsewhere and with the assistance of District Land Boards, which have jurisdiction over land titles and are independent of central government control.

The apparent aim is to aggregate smallholdings into substantial parcels that can be sold on at much higher prices to private developers as an expected oil boom gathers pace.  Compensation settlements for land that is compulsorily purchased for oil infrastructure or related public works are another source of potential profit.

Yet this does not break any law, according to the official.  A buyer may reach a private agreement with a customary landholder, have the land surveyed and receive a freehold title provided that the community confirms that the seller did have customary rights over the land.

The official acknowledged, however, that District Land Board staff “may not be doing their jobs properly” in visiting the community to verify that the seller has rights and that those rights are recognised by his neighbours.

Moreover, although land registries are, in theory, public documents, in practice they are jealously guarded by Land Boards, adding to the suspicion that local officials are complicit in the accumulation of land by a lucky few.

 “Speculator’s honeymoon”

Stephen Mukitale, the NRM Member of Parliament for Buliisa County, Buliisa, has long been waging war on land speculation in Bunyoro.

For several years, he claims, around 30 families “from Kampala” have been using local agents to buy up land along the whole Albertine Graben.

He also alleges that he has been harassed and intimidated by local security chiefs and police because of his efforts to expose this.  On December 2, 2010, he complained in parliament that:

“Every time I appear, he [Officer in Charge of Buliisa police, Edison Muhangi]  comes with an AK 47 and some people . . . They have shot at me three times . . .  I request that this matter is urgently handled if we really want to prevent a Niger Delta and an Ogoni [situation]in the Rift Valley, because I can see the speculators, the oil sharks, moving so fast to even recruit in the security,  even to recruit political leaders, even to recruit those who should be protecting the community.” (Hansard)

The MP claims that his investigations prompted President Museveni to announce a ban on further land transactions in Bunyoro, in a bid to calm the situation.

Yet Hon. Mukitale believes this has now turned into a “speculators’ honeymoon” because it has prevented locals with customary tenure rights from obtaining freehold titles.

And after oil?

If the past and the present are both marked by dispossession of the many for the benefit of the few, the danger is that the future also will be.

When the oil is gone—in around 30 years from now—the soil will remain. Uganda’s land, much of it prodigiously fertile, is the country’s most enduring natural resource. Its fertility may be threatened by local and global climate change, but it is likely to remain a critical resource for many generations to come.

But when the oil is gone, who will own Uganda’s soils?

The local oil rush is coinciding with a global land rush. Higher commodity prices—driven by  the growth in the number of people, especially in Asia, able to afford significant consumption—are driving large scale land acquisition by commercial investors. According to a recent report in This is Africa:

“Africa’s land is attracting unprecedented commercial interest from governments, sovereign funds, private companies and asset managers, from neighbouring Qatar all the way to South Korea. Around 53 million hectares – roughly the size of France – has been sold, leased or licensed globally since 2001, and that only covers deals with reliable sources. The true figure could be over 200 million hectares.”

In Uganda’s case, the land rush—involving local elites at least as much as international investors—may in future be spurred by what economists call ‘Dutch disease.’  At its simplest, the ‘disease’ will, as a result of oil revenues and increased government expenditure, raise the value of the Ugandan shilling. That will make agricultural exports, the current mainstay of Uganda’s economy, less competitive.

It is highly likely that policymakers will cite Dutch disease as another reason to encourage large scale, commercial agriculture. Big farms, it will be said, can achieve economies of scale, mechanisation, and higher productivity, and so could sustain the competitiveness of agricultural exports even during an oil boom.

In short, oil wealth could be a significant factor in leading the country towards the kind of plantation agriculture that, by a quirk of colonial history, Uganda largely avoided in the 20th century.

Yet if that happens, what will become of the many millions of Ugandan families who still live from subsistence farming and cash-cropping, and to the smaller but still substantial number of pastoralist families?

The oil industry will certainly not absorb them.  A few thousand skilled workers—welders, fitters, etc—will be needed over the next few years to build the infrastructure required to extract the oil. But once it is flowing regularly the operation will be overseen by just a few hundred highly trained technicians and managers.

With Uganda’s population currently growing by 3.3 percent each year, the livelihood challenge won’t get any easier. According to the World Bank, even if family sizes decline steadily in response to improved life expectancy, “in 2050, Uganda’s population is likely to exceed 80 million people,” compared to some 34 million now. And by then there will be no more oil.

All of which is good reason for policymakers to use oil wealth to support, and not to dispossess, the small scale farmers. Report by NY

Sidebar: DRILLING DOWN TO THE DEEPER ISSUES

Surface issues: As oil production gets under way, are there workable procedures in place to assess and pay fair compensation to people whose land is compulsorily purchased, occupied, or otherwise affected by the extensive infrastructure that will be needed for production, storage, transport and waste dispoal, and for associated public works?

Just below the surfaceThere is now ample evidence that substantial areas of land in the Albertine Rift have been acquired—‘grabbed’ is the usual, Ugandan way of putting this—by local and national elites. The presumed motive is investment in land whose value, as the region becomes an oil-boom area, is soaring. Profit may come either from later compensation deals, or by re-sale for private developments.

Because land in the region is, overwhelmingly, held on a customary tenure basis, most communities believe that they have secure and hereditary rights over it—and are dismayed to find that it is being sold from under their feet in deals of, at best, dubious legality.

Yet when these deals lead to conflicts, local authorities and police appear generally to side with the buyers.

Gender dimension: It is invariably men who decide to sell land and who decide how to use the proceeds.  If these are spent in a consumption splurge, women are often left struggling to feed the family.

Cultural identity and conflictLand for many people, especially under customary systems, is intimately entwined not only with livelihood but also with issues of cultural heritage and identity. Purchases by outsiders, even with due legal process, can be experienced as cultural encroachment and invasion.

In Bunyoro, these issues are amplified by a widely held sense of historical grievance over lands forfeited in the colonial era, and subsequent economic marginalisation.

Yet this is further complicated by the fact that Bunyoro is not, in fact, communally homogenous. Tensions over land have already sparked inter-community conflicts.

An uncertain futureMost economists agree that, even with good management, oil revenues will tend to strengthen Uganda’s currency, raise the price of services such as construction, and make agricultural exports less competitive. One effect of this ‘Dutch disease’ may well be to increase policy pressure for concentrating land holdings in larger-scale, commercial farms—whose economies of scale, it will be argued, make them better able to compete on world markets. But what will happen when the oil runs out?  If Uganda is not able to absorb former subsistence farmers into other occupations, the country may be left with a large, impoverished and landless underclass.