What does the discovery of oil in Kenya mean for Uganda?

The oil debate in Uganda has been more spectacular in recent years. Available information indicates that the presence of oil fields in Uganda was first confirmed in 2006, in the Albertine region, in the west of the country, by Heritage Oil, a British international oil and gas exploration, development and production company. . Another discovery followed in the Amuria district of eastern Uganda earlier this year (2012). However, the parallel discovery of oil in the Turkana region of northwest Kenya created a moment of dilemma. In the clear sense of its purpose, it demanded knowledge of the future prospects of oil exploration for the country and other parties in the oil business.

Once the production capacity exceeds the demand in the local, regional and international markets, the bargaining power of the country will be reduced as much as the prices and remuneration of work. The situation forces employers to fire workers or even create conditions for industrial strikes and instability in the country, in response to low job satisfaction. In addition, there will be serious losses recorded by parents, funding institutions and the government after failing to meet the ultimate goal of retaining as much income as possible for the prosperity of their people to offset the costs of training their local expertise in oil production and management. The resulting economic turmoil and backlash eventually threaten national security, which in turn unsettles political authorities. It will be under such circumstances that the discovery of oil will seem more fatal than not.

The indigenous population of the area prided itself on having oil fields in their midst. They had to quickly seek percentage profit guarantees for rapid development and, probably, regain their glory, as one of the most economically powerful people in the country. Unfortunately, the pride turned out to be illusory as the prospects for economic dominance spread to the wider region of Africa. Some profits made so far from the oil companies are significant, but they may soon depreciate. Such benefits include: scholarships for higher education in petroleum and natural resource management, compensation money, and health facilities. Concern to ensure the sustainability of these community programs may also cease. The same pride and disappointment was incidentally shared by the rest of the nation.

The already existing cancer of corruption has already spread to the nation’s oil economy. Ethics and integrity in all aspects of business operation are never taken into consideration. The issuance of licenses to oil companies, land grabbing, poor system of granting benefits (benefiting the wrong people) and the governance of oil leaves the nation aggravated. These vices began to damage the oil production process early on, which alone predicted failure. With economic uncertainty and anxieties looming, corrupt officials are even busier doing what they do best. That is, siphon off oil revenue and demand leftovers from oil companies as much as they can, privately, before the sector collapses. The same officials had recklessly manipulated the economy with a view to saving their political faces by using the country’s resources to later offset the losses with ‘pending’ oil revenues. Now, with the discoveries of oil wells in other parts of the region, it brings even greater shock and misery to the nation.

Regional dominance and global master player focus may be the country’s only savior in such circumstances. You could use those attributes to further your financial interests. Fortunately, at the moment, Uganda has a lot of influence in the region and internationally. You will only have to strengthen the existing balance of power and the state of affairs on the global scene. But in doing so, some countries may emerge to claim or claim regional leadership as well. For example, Tanzania was once a regional leader under Mwalimu Julius Nyerere (RIP) – you may want to regain your regional position. If that happens, the conflict of interest could result in a regional security crisis, in which some flashes of war would establish new positions of power and, ultimately, new economic positions.

And while Uganda’s regional influence counts more for winning and dominating the oil market in the region and on the world stage, it clearly lacks the experience to boost its credentials as an oil exporter. He has to rely on foreign experience at this time. Even the current plan to install a regional refinery to guarantee maximum oil profits faces a great challenge for the country. With much local and international disgust at the political and economic corruption reflected in donor countries, it can be very disconcerting for potential foreign investors to trust the country’s business environment. In addition, there are many options in the region and in Africa in general. So-called investors might be reluctant to invest in Uganda, where there has never been a successful record of oil production, where poor governance is reflected in oil production, and where the country is at risk of security breaches, preferring the most predictably safe economies.

However, if the countries of the region cooperate on the production, management and trade of oil under the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), the stability of the oil prices and the national economy. for the benefit of the people. This is so because there would be freedom of movement, common decisions on prices and profits, and preferential treatment for traders operating within regions. As is already the case, staff from oil companies will commute to work anywhere in the region or job seekers could choose to apply and work in any of the member countries. Typically, by doing so, the threat to the peace and security of the regions, highlighted above, would be brought under control. The Ugandan government has already shown great wisdom in its groundwork to facilitate regional integration and strengthen the existing structures in those regional bodies.

It will also be important to maintain a vibrant agricultural sector, without which not even oil plants would survive; since they would need food and energy to meet their labor needs. Food must be produced regionally to increase affordability and accessibility to the broader population. Understandably, if the booming oil business continues to offset food production, famine or high food prices could be the order of the day. Also, inflation will increase the cost of production and reduce savings. It will then be irrational to specialize in oil production and forget about agriculture, which well explains our history of economic survival.

In general, the Ugandan government has for a long time neglected the development of appropriate and renewable technologies, putting little energy and financial resources into research and innovation. It only waits at the end of the road for the sweat and achievements of individual citizens to later claim and consider as their own; arguing that he created the conditions of peace for that person or persons to prosper.

The widespread belief is that the discovery of minerals such as oil never happens without some form of colonialism manifested through the invasion of multinational companies in any of those countries. Coincidentally, for some time the authorities have expressed great hunger for them. Multinational companies are often followed in oil-producing countries by economic security agencies of their respective governments. And because these companies come from different countries, they start to fight for the favors of the indigenous authorities. If the authorities of the day fall out of favor with any of them, the affected country uses its military resources to overthrow the authorities, preferring one (usually the country’s local opposition) to defend its economic goals. Countries like the Democratic Republic of the Congo (DRC) and the former Sudan have already gone through a similar cycle.

In fact, the discovery of oil in Kenya creates a dilemma for Uganda. This calls for more sophisticated means to carefully manage the resource so that it still meets the country’s hopes and avoids unnecessary economic and political shocks. Among them are the strengthening of efforts towards regional and international cooperation, and the promotion of rational foreign investment and pro-citizenship or pro-nation. While that happens, it is also important that the country continues to be aware of the significant benefits of investing in agribusiness and supporting research and innovations.