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CSOs Call For Audit Of The Oil Sector; Fear Oil Money Will Be Put To Waste

Following the oil cash bonanza in which 42 top government officials were rewarded with colossal sums of ‘oil money’, activists want an audit of the entire oil sector.

This move follows a public uproar, over ‘the ‘scandal’ in which 42 top government officials, were paid Shs 6bn (about $1,656,000) as a reward for winning Tullow and Heritage cases over Capital Gains Tax.

Winfred Ngabiirwe, the Executive Director, Global Rights Alert, says the ‘oil cash bonanza’ speaks volumes of how oil money is and will be spent.

This bonanza confirms our fears that oil revenues will not deliver the country from poverty,” she explains.

The level of secrecy and the impunity of the key players in the sector only confirm that Uganda is creating her own model of oil curse. It appears, those in power have decided to eat what they can eat, uncertain when production will start and oil dollars start flowing,” she argues.

According to Ngabiirwe, all these are attributed to government’s delay or refusal to sign up to the Extractive Industries Transparency Initiative (EITI), a global frame that promotes transparency and accountability in the extractives sector.

The EITI framework, she argues, would enable Ugandans to know how much the country is earning from oil and gas resources and how the money is spent.

We need a forensic audit of the entire sector. First, we need to know whether the country is collecting the right amounts of money from oil companies, and are oil companies paying right taxes to our coffers and then Ugandans must follow the money. Short of that, we are dreaming that will benefit our country,” she demands.

Gerald Karuhanga, the Ntungamo Municipality Member of Parliament, concurs with Ngabiirwe echoing that the cash bonanza is a confirmation of how oil money will be put to waste.

He argues that the fact that government can extravagantly spent colossal sums of money on “a golden presidential handshake’, for simply winning a case, what will happen when the ‘real’ petro dollars begin to flow.

Defending the oil cash bonanza, Sarah Birungi Banage, Uganda Revenue Authority’s Assistant Commissioner for Public and Corporate Affairs, notes that the ‘presidential golden handshake’, was in appreciation of the exemplary performance by the team and a standard international best practice.

“….. government granted the team involved an honorarium or bonus or golden handshake totaling Shs 6bn. This represented less than 1% of the amount brought in or defended,” reads in part a statement from URA.

The team brought in a combined total of $700m into government coffers after a series of court battles in Uganda’s Tax Appeals Tribunal, High Court, Court of Appeal and High Court of London, Court of Appeal of UK, and two international tribunals. This was from the Heritage transaction and the subsequent Tullow transaction. The two cases were an unprecedented win for the country, and the first of its kind in Africa in the sector of Oil and Gas Taxation,”  the statement further notes.

The officials who benefited from the ‘presidential golden handshake include; former Permanent Secretary in Ministry of Energy Fred Kabagambe Kaliisa, URA’s Commissioner General Doris Akol, former URA’s head of legal affairs and ED KCCA Jennifer Musisi, Secretary to the Treasury Keith Muhakanizi, former Attorney General Peter Nyombi and his deputy, Fred Ruhindi, Lawrence Kiiza from Ministry of Finance, Ernest Rubondo, the executive director of PAU, Francis Atoke, the Solicitor General. Others include lawyers; Ali Ssekatawa (URA), Martin Mwambutsya (then State Attorney), Peter Muliisa among others.

In November, 2015, President Yoweri Museveni wrote to the Minister of Finance, Hon. Matia Kasaija authorizing cash payments to the 42 government officials.

I met with a team of officials that handled the case and they requested to be considered for a reward in appreciation for the work done. Given the amount of money that was recovered for the government, I agreed that government pays them some money as a token of appreciation. I therefore direct that a team of 42 government officials be paid Shs 6bn only,” Museveni wrote in his authorization letter.

The oil cash bonanza comes after,  the ‘first oil money’ was allegedly illegally released from Bank of Uganda, purportedly on the orders of the President to buy fighter jets in 2013.

Report  by Edward Ssekika