A Review of the Nigerian Energy Industry

Uganda MP wants “equal oil revenue sharing”

North Sea, Brent crude oil02 September 2013, Kampala – A Ugandan MP from Lubaga South, John Ken Lukyamuzi, wants the country’s 995 Constitution amended to provide for an elaborate mechanism of sharing of oil revenues.

Lukyamuzi, also the shadow minister for Water and Environment, is unhappy that the Constitution is silent on oil revenue sharing as he stressed that each district in the country was supposed to share in the oil royalties, as the product was a national resource.

Lukyamuzi’s call came as he delivered a paper titled, ‘Oil Production and refining in Uganda: Environmental calamities’ to the rotary club of Kampala South, at Hotel Africana last week.

Uganda struck oil in the Albertine graben in 2006. Some of the 25 districts in which the region include: Adjumani, Amuru, Arua, Buhweju, Bushenyi, Buliisa, Bundibugyo, Hoima, Ibanda, Kabarole, Kamwenge, Kanungu, Kasese, Kibale, Kiryandongo, Kyenjojo, Masindi, Mitooma, Moyo, Nebbi, Ntoroko, Nwoya, Rubirizi, Rukungiri and Yumbe.

There is no legal framework to provide for oil revenue sharing, but the Public Finance Bill 2012, now before Parliament, provides for sharing of only royalties from oil between local governments in the Albertine graben and central government.

Clause 71 of the Public Finance Bill 2012, allocates 7 per cent of royalties to local governments in the Albertine rift and 93 per cent to the central government, meaning that the rest of the country can only benefit through the national budget allocation.

But Lukyamuzi argues that this is unfair, although other observers argue that other districts automatically benefit through budgetary allocations.

“Every district should have a share of the oil royalties,” said Lukyamuzi. “We should streamline the allocation of royalties so that, even areas (districts) without oil will be constitutionally empowered to have a share of the oil royalties.”

However, Lukyamuzi’s proposal is likely to remain on paper as long as the ruling NRM party that commands majority in parliament doesn’t support it. Already, Bunyoro and Acholi are demanding for a higher share of oil revenues, though it is supposed to be a national resource and shared equally. Lukyamuzi says he is ready to table a private member’s constitutional amendment bill to provide for the amendment.

But MP Michael Werikhe (Bungokho South), the chairperson of Parliament’s Natural Resources committee, believes that Lukyamuzi’s proposal is not feasible in Uganda, but concedes it requires further scrutiny.

He says that besides oil, in other sectors such as mining and tourism, it is only the host communities that get a share of the royalties and then the rest of the country benefit through budget allocations since the revenues end up in the consolidated fund.

– The Observer

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