All laws governing Uganda’s extractive sector will undergo a review by the government following the admission of Uganda to the Extractive Industries Transparency Initiative – EITI, to improve transparency and governance of natural resources.
Uganda, whose membership was confirmed on 12th August will now be required to publicly disclose information such as contracts, beneficial owners, revenues, and payments to ensure public oversight as a requirement for the new member.
The EITI sets out standards of disclosure of all information along the extractive industry value chain from the point of extraction, revenue generation, and sharing, awarding of contracts and licenses, to final expenditure of all proceeds.
Saul Ongaria, a senior economist in the Ministry of Finance says that they have now drawn up an 18 months’ work plan with several activities aimed at implementing the EITI requirements.
He says that the key activity being embarked on is a review process for the country’s legal framework, contract awarding process, register of licenses, and others to ascertain the closing of gaps that would deter transparency in the sector.
“The process will review, analyze and identify obstacles for alignment with the EITI standard, track and report on collected revenue and track and report on social and environment expenditures by companies”, said Ongaria as he explained the key issued to be implemented in the next 18 months.
Regarding the process of reviewing extractive laws, Siragi Magara Luyima, the Civil Society Organizations (CSOs) representative on the EITI Multi-Stakeholder Group (MSG); a group that brings together officials from the Ministry of Finance, Energy, Uganda Revenue Authority (URA), and CSOs specifically said that the Public Finance Management Act (PFMA) of 2015 is one of the main legal frameworks that require urgent review.
According to Magara, there is a need to review PFMA, 2015 to create an expenditure ceiling on the petroleum revenues transferred into the Uganda Consolidated Fund, to avoid overdrawing the petroleum fund and appropriating huge sums of money that would end up in the economy and cause inflation.
He also notes that the appropriation from the petroleum fund should clarify on infrastructure. Not only considering road and energy infrastructure projects but also health, agriculture and education infrastructure should be considered to ensure equity of benefits from oil resources.