What Can Uganda Learn from Ghana’s Oil Experience?

Jacob Waiswa 

Peace Center,

Makerere University 

Introduction 

Oil is one of the most precious minerals in the world today alongside gold and diamond. The wealthiest nations in the world today are dependent on it. There are Saudi Arabia, Kuwait, United Arab Emirates, Iran, United States, Canada, Great Britain and Russia. And in Africa there are Nigeria, Congo Brazzaville, Libya, Chad, Gabon, Equatorial Guinea and, of course, Ghana. As usually the case in Africa, Ghana’s oil reserves were discovered in 2007 to become the nation’s multibillion dollar industry –producing over 200, 000 barrels of oil everyday. 

Experts refer to Ghana’s oil and gas discovery the largest on the continent in the last decade. Uganda is a new entrant on the oil production scene. Formal reports about the existence of oil were made known to the world in 2011. That caused anxiety among the mainly middle- class whether its discovery will be a curse or blessing whilst citing naughty examples around the world like the Nigeria Crisis and foreign interventions in the Arab Peninsula. 

 Ghana's Experience

 It is interesting to note that Ghana did not have such conditions as anxiety over the discovery of oil in 2007. Luckily for it, it has got a smaller and well-informed population who had information about oil experiences both in Africa and Europe. Nigeria provided the most immediate experiences to it. Ghana provided foreign firms and their governments most business friendly environment reinforced by well-practiced and respected democratic principles. It is in Ghana’s interest and will power to pursue experiences of successful countries like Norway.

Ghana practices high level of transparency in all its business dealings. Decisions are based on contributions of expert knowledge and experience by stakeholders, who are accounted to each other. Those are the ministry of energy and oil agencies like Ghana National Petroleum Company (GNPC), Ghana Petroleum Commission (GPC), Ghana Investment Promotion (GIP), Ghana Ports and Harbors Authority (GPHA) and Ghana Gas Company (GGC). 

The nation’s experts, universities and research institutions in the field of oil production and economics add to existing bank of knowledge, and do have and enjoy the platform to convey it. Ghana is open to expert criticism and challenge to its policies. The media reinforces the search for accountability through amassing interest to report on oil concerns and offering a platform for government and stakeholders to report their annual returns. 

Despite involvement of foreign firms in the oil industry Ghana was shrewd enough to raise its shareholder percentage above 50. It was a strategy aimed at ensuring socio-economic security of its people against the always exploitative foreign firms. Realizing the background of their economy is Agriculture, Ghana was not swayed away from it by oil wealth. They remained committed to Agriculture. In fact, 60% percent of the oil revenue is allocated to the agriculture sector. For Ghana, stability and democracy are relished.

Ghana’s revenue is for the good of its people and it ensures equity while meeting citizens’ needs. The people of Ghana are very enthusiastic and cannot easily be taken for granted; they are empowered enough to demand for and equal share of the country’s wealth. Trade unions are a recipe to the already conducive trade and working environment. They forge a healthy working relationship with firms dealing in oil and together maintain good income levels of workers in the industry. Contracts made between government and oil firms and policies that follow are constantly scrutinized to ensure their projected outcome. 

 Lessons for Uganda 

From Ghana’s oil experience Uganda learns to involve stakeholders in the debate on the oil subject and take outcomes seriously, to invest in trade diplomacy and experiential learning from successful oil producing countries, ensure sustainable peace for oil economy to thrive through the values of democracy (transparency and accountability), encourage a vibrant civil society and societies of trade unions, scrutinize firms intending to invest in the sector to ensure their viability, mind the welfare of people through environment protection, encourage oil research and studentship, and maintain a larger share capital in oil firms as a buffer against foreign business exploitation.

Conclusion 

The debate on the oil sector is normal and must be encouraged to compel parties in the oil sector to account for every transaction done, which in a long run reduces unnecessary anxieties and smoke fumes for war. A foundation based on democracy in oil governance will potentially turn the discovery of oil in Uganda a blessing.

ATTITUDES TOWARDS FOREIGN INVESTMENT IN UGANDA

Jacob Waiswa
Situation Health Analyst
Dishma-Inc.
P.O. Box 8885,
Kampala-Uganda
Tel. +256392614655/+256752542504
dishma.imhs@gmail.com
www.situationhealthanalysis.blogspot.com

Since liberalizing the economy in 1987, foreign investment has been much sang, appealing and ardently supported by the national resistance movement government –to the extent that anyone who sabotaged the ‘good’ intentions of foreign investors faced its (government) wrath.

Such intentions, for example, were to: reducing the unemployment burden and managerial inefficiency in government bodies charged with promoting cash crop economy that afflicted the nation, then.

With 48% admissions to the fact that foreign investment was good for the country, 27% who said foreign investment was not good for the country, 22% who said that sometimes it was good for the country, and 3% (who did not know whether it was good), it either total failure on the part of the architects of foreign investment major paradigm or lack of government involvement, commitment and will to ensure fair treatment of local business competitors and laborers. Foreign firms have been criticized for coming in with own labor force, low payment, and poor treatment of local labor force.

And those who were supportive (at 57%) to non-government organizations (NGOs) positive contribution to development, 12% (who said NGOs did not contribute to development), 31% (who said that sometimes NGOs contributed to development), 3% (who said did not know about NGO contribution to development), is a reflection of areas –where NGOs can be found and their impact on the people there. Some areas did not have NGOs, yet their services were highly needed.

NGOs have been famed for locating themselves in urban areas rather than in rural areas –where services are dearly needed. At the same time some of them are brief case type or simply do not deliver the much-needed public goods.

The 21% who said yes to a fact of government monitoring of foreign investors, 47% (who said government did not monitor foreign investors), 28% (who said that sometimes government did monitor foreign investors, and 4% (who said they did not know whether government monitored foreign investors) answers the question of inadequacy of non-government organizations and foreign investment firms in their primary goals to people emancipation and reducing administration costs of corporate governance by government.

These firms need to be monitored to best benefit the people like genuine employment, fixed minimum living wage and protection of local businesses. For those, who said yes to a fact the government monitored foreign investors (at 21%) cited the roles government standards agencies in attempting to maintain the standardization of production, ensure consumer rights and citizen welfare.

23% (who said yes), 55% (who said no), 23% (who said sometimes) and 1% (who said did not know) –on the effectiveness of poverty eradication programs, showed the general dissatisfaction of the citizens about government-driven programs to eradicate poverty.

The national agricultural advisory services (NAADS) has been criticized for being partisan and corrupt citing numerous officials country-wide arrested for swindling NAADS funds. Funds are reportedly not accessed by the grassroots people who need them –but, rather, disappeared along the way.

In conclusion, whereas foreign investment is a good calling, it is full of inefficiencies that must be corrected if they are to mean anything to the people of Uganda. The government only does the appeasement role in its deals with foreign investors –with little or no respect for its people.

It is, thus, important that government increases the power and effectiveness of its regulatory organs to highly favor and protect its citizens’ endeavors –since it is them (citizens) who eventually feel their (foreign investors) impact.