US diplomatic cables leaked by the whistleblower website WikiLeaks last week, alleged that in conversations with the US Ambassador to Uganda, Tullow Oil had accused the Italian oil biggie Eni of bribing two ministers in the war for control of Ugandan vast oil and gas fields. The two ministers named in the cables are Minister of Energy and Mineral Development Hilary Onek, and of Security (also NRM party Secretary-General) Amama Mbabazi.
For the record Onek, Eni, and Tullow have denied the allegations in the cables.
The allegations themselves don’t concern us here. What does it say about the long-term prospect for Uganda when it begins digging out the oil and selling it.
Irrespective of the truth of the specific claims in the cables, there is a widely held view that (like in most parts of the oil world) corruption has already taken hold in Uganda’s oil business even before we put a barrel in the international market.
Since 1969 or earlier, according to some documents I have seen, the existence of oil in Uganda was a well-known fact. What was not clear, was exactly how much. New exploration methods made it easier to establish that — plus a determination by the government to find it.
The Milton Obote 1 seemed to fear the “oil curse”, and didn’t go big on it. Strongman Field Marshall Idi Amin was too inept. That said, the existence of oil in commercial quantities, was established well before the February 2006 elections.
However, it seems there was fear that if the finds had been announced earlier, it would have raised the stakes too much in the 2006 polls. Also, that President Yoweri Museveni would be accused of having amended the Constitution and made himself virtual president for life in 2005, in order to profit from the oil.
In the end, the announcement was made shortly after Museveni was sworn in.
Now the way I see, as this column has noted before, that by 2005 the corrupt in Uganda had eaten what they could lay their hands on. As with Daniel arap Moi’s Kenya, the next thing was to go for land, forests, and so on.
Indeed, we had the Temangalo land sale scandal after that, then leasing the sacred “source of the Nile” to an investor to build a hotel. Things like Shimoni Demonstration School were torn down to be given to investors. Then Chogm came, and it turned out the only way it could – into an “eating” frenzy, the type of which the country had never known.
With oil, foreign businesses have now fully established the essential character of the government and their elite support structures (the law firms that handle crooked business, bank managers who handle dirty money, and security officers who facilitate corruption) – which nearly all of them are on the take.
Almost every major and foreign businessman I have met, says the same thing: “From the very top, to the bottom, everyone is stealing.” What the cables suggest about corruption in Uganda oil, is nothing. They are the opening shots. To get a sense of what will happen when a country like Uganda commercialises massive oil fields, look no further than Nigeria and Angola.
While Nigeria and Angola are among the largest African oil exporters, they have something else in common – they also have Africa’s most frequent fuel shortages and the longest queues of motorists waiting at filling stations. That is because oil often brings an irrational form of economic nationalism that descends into extreme stupidity. Together with corruption, they form a lethal mix.
So look ahead and imagine what will happen with a corruption-riddled oil sector. Like in Nigeria, the chiefs will be stealing the big money at the top, but the small people will be busy below.
So you will have endless sabotages of oil pipelines by small-time bandits who siphon it off to sell in the black market as happens in Nigeria. The government will respond by sending more police and military officers. As in Nigeria, because there is a lot of money to be made, the security chiefs become part of the criminal rings, offering protection to the oil bandits in exchange for a handsome cut.
Then, to get elected from the oil areas, you have to be secretly in the pockets of the gangs and or the big multinationals. The choices for the President become clear. He cannot transfer corrupt police officers and army commanders, without difficulty. If he does, he makes sworn enemies who will be out to get him.
However, if he doesn’t, he incurs the wrath of the officers who want a chance to go into the oil areas and enrich themselves too. So this group will do him in if he doesn’t reshuffle.
His next alternative is to become the Eater-in-Chief, in which case he will be the property of the oil companies, and will have to grant them the best tax and profit repatriation policies. If he doesn’t, they will get rid of him.
We asked for oil. The gods answered our prayers; and in the same breath, cursed us too.
source: Daily Monitor
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