By Ibrahim Kasita and Vivan Agaba
A new oil revenue sharing plan is underway, with a huge portion of the petrodollars invested in infrastructure development to spur economic growth.
“We are submitting to Parliament the Public Finance and Accountability Bill to handle the issue of oil revenue management,” Fred Omach, the state minister of finance in charge of general duties, said yesterday.
Without specifying when the Bill will be tabled in Parliament, Omach said 7% of the total oil revenue collected will go to the people living in the oil-producing regions of Bunyoro and Acholi.
The minister was yesterday speaking at the opening of an oil revenue management seminar at Speke Resort Munyonyo.
The remarks come at a time the public is demanding to know how oil revenues will be shared and managed in a transparent manner.
This was after it was confirmed that there are about 2.5 billion barrels of oil reserves in the Lake Albert rift, which is regarded as profitable. Oil production is expected to begin in about three to five years.
Experts believe that Uganda will earn close to $3b every year when oil production starts.
“We are proposing that the oil revenues be collected by Uganda Revenue Authority and the money deposited in a special account in Bank of Uganda,” Omach said.
“The oil revenues will be invested in infrastructure like roads, railways and power generation research and innovation.”
Prof. Emmanuel Tumusiime-Mutebile, the governor of Bank of Uganda, highlighted issues critical to the sound management of the oil revenues in Uganda.
“The revenues accruing directly from oil are finite. If oil revenues are consumed rather than invested, living standards in Uganda may rise in the short term but this will not be sustainable,” he said.
“If the oil revenues are to be harnessed to generate a sustainable increase in living standards, a substantial part of them must be invested outside the resource sector in physical, human and environmental capital including education, healthcare, roads and railways.”