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Refinery residents blow compensation on booze, motorcycles

Two men merry making in Kyapaloni town, Kabaale parish, Hoima. (Photo: Chris Opio)

Two men merry making in Kyapaloni town, Kabaale parish, Hoima. (Photo: Chris Opio)

A good number of the compensated refinery area residents are spending their money on luxuries, ignoring lessons from a crash course in financial management and investment that the government took them through last year to prepare them for the windfall.

Government has so far paid about 800 of the 2473 residents that own property in Kabaale parish, Hoima district, and they will soon leave the area to make way for the crude oil refinery.

“I have a list from Crane Bank showing that 48 people have received money,” said Pascal Ozete, a local leader in Nyahaira village. “Yes, they are living a better life.”

Oil in Uganda visited Kyapaloni, one of the 13 villages where compensation is ongoing, and found a different mood from what was there in the last half of last year. The area is now lively and most of the small bars are full.

In one of the bars, Okwir Boniface, one of the recipients of the compensation money, is seated enjoying a bottle of beer.  He revealed he was paid five million shillings in December last year for his land.

“I am a member of a group of 10 people who owned land in Kabaale and we were paid fifty million shillings ($20,000),” he said. “I received my share through Post Bank. I withdrew two million shillings and used 400,000 shillings to buy a set of chairs and the rest for my children’s school fees. The remainder is what I use to drink some beer and to feed.”

According to Stella Kahangwe, a native of the area, bars are now good business. Some shrewd bar operators have even shifted from Hoima town to the area.

Sex workers have also followed suite, temporarily pitching camp here to cater for these new millionaires.

And the clients are in abundance. In another of the bars that Oil in Uganda entered, the male patrons, thrilled by the seeming arrival of ‘new girls’ in the area, were eager to pay for sex.

“He has asked me if he can have you girls, that you are so beautiful,” said the guide, pointing at a dark, shabby youthful man who had obviously had a lot to drink.

“That is how it is here, people have left their husbands and children to come and sell sex,” she added.  “Like that one [pointing at one of the ladies in the bar] “she is a sister to the owner of the bar. She has a family in Hoima town but since Christmas time, she has been camping here, making money from men.”

More boda bodas

Some of the compensated residents are also spending their money to acquire motorcycles-commonly referred to as boda boda. Some even acquired loans as far back as November last year-using the impending compensation money as security- to buy the motorcycles.

According to Boniface Okwir, three of his brothers used their share to buy motorcycles. “I will also buy mine once my children are back in school,” he told Oil in Uganda.

Most of those buying the motorcycles intend to deploy in the transport business, but now the market has become saturated.

“We have very many boda bodas today, yet transport business is low,” notes Chris Opio, a Kyapaloni resident. “All of them (boda bodas) just line up at the stage.”

Back in Hoima town, motorcycle traders are laughing all the way to the bank. A trader on Wright Road confirmed that the majority of the customers since the festive season have been from the refinery area.

The refinery area residents insist that the Hoima traders cheat them by inflating the price of the motor cycles. According to them the price ranges ranges between three and four million shillings depending on the make, but the traders normally over charge them by at least five hundred thousand shillings.

“When they see someone covered in dust (due to the dusty Hoima-Kabaale road)  coming into the shop, they immediately hike the price because they think you have ‘refinery’ money,” says Opio.

Financial management training inadequate

Some of the residents Oil in Uganda spoke to admitted having attended a training in financial management that was conducted by Strategic Friends International (SFI) on behalf of the government in November last year, but confess not picking any useful lessons.

“The training was more theoretical than practical, it is as if we were in class,” says Innocent Tumwebaze, a student in his senior six vacation who is also still waiting for his compensation.

He adds that the training did not consider the needs and interests of the residents, because rather than encourage projects like agriculture and poultry, the residents were instead encouraged to start trading and transportation business.

Chris Opio agreed, adding that the training was not practical. “That process was a waste of time. It was theory and not practical at all,” he said. “Instead of bringing for us farming experts, they brought for us this guy (the facilitator) who kept talking about starting business in town. Like he kept talking about boda bodas and people have now bought them, yet transport business is low.”

But according to the Petroleum Exploration and Production Department’s (PEPD) Bashir Hangi, the training helped to minimize the mismanagement of the money.

“Even accountants can put money to waste,” he said. “The training was meant to minimize the abuse and I think that we achieved that.”

“The people assessing the contents of the training never attended so what they are saying is not true,” Hangi added. He explained that the affected persons were taken through aspects of financial management, enterprise selection and modern agriculture. “It is unfortunate that not all of them have taken serious what they were trained on,” he noted.

Mr. Hangi further added that PEPD was planning another sensitization exercise this week to educate the locals on the need for saving and to encourage them to save for their children’s education.

Relocation starts in April

Meanwhile, the government is sticking to its earlier timeline for the compensated residents to leave the area within three months of receiving payment.

According to Hangi, for those people who were paid in December last year, government plans to take control of their land when the three months elapse in April this year.

But with these locals wasting the money away on luxuries, it is unlikely they will have acquired new homes by then and some of them may not be willing to leave peacefully.

This report was updated on 03 February, 2014.

By Flavia Nalubega and Beatrice Ongode

editor@oilinuganda.org