Yesterday I received an invitation to an international Oil symposium scheduled for 23rd March in Dubai. The theme is “Financing Projects in New Oil Era”, and discussants will be the finance heads of the major oil companies from the six gulf states (leading national corporations like SABIC, RTA, ORPIC and KPC).
These are also the big project sponsors in their respective countries.
Uganda has been blessed with the precious resource. Oil reserves are estimated at 6.5 billion barrels (though only 1.4 billion barrels are said to be extractable).
Hopefully these are reliable figures. The difference 5.1 billion barrels is substantial. If the entire collective national resource is being claimed by one individual, he/she will be offloading historic amounts of state finances into his/her personal Swiss bank account.
Proper accountability increases management proficiency on budget deficits and unblocks significant sources of finance for national projects. Including pre-financing facilities where banks can make funds available even before the resource is extracted.
This approach requires restraint and selfless management lest nations scramble irresponsibly for the funds from the resource.
In the US, the worlds leading oil producer, they extract 13 million barrels per day (International Energy Agency report).
A quick calculation shows that they deplete the equivalent of Uganda’s entire oil reserves every 500 days.
By Hussein Lumumba Amin