Uganda warns on misuse of oil royalties

20 April 2016, Kampala – Peter Lokeris, the minister of state for minerals in the ministry of Energy and Mineral Development, has warned local governments against planning to utilize revenues from oil royalties to increase allowances of councillors and other local politicians.

Uganda Energy-Minister-Irene-Muloni

Irene Muloni, Energy Minister

He said money from oil has been ring-fenced only for development activities. Lokeris was addressing local government leaders from oil and minerals-producing areas at Speke Resort Munyonyo recently.

The conference was organized by the Advocates Coalition for Development and Environment (Acode) and Civil Society think tank, Uganda Local Governments Association (ULGA), and Natural Resource Governance Institute (NRGI) to sensitize local governments on revenues from oil royalties.

Lokeris said: “Local governments that are going to benefit from the oil royalties must maintain other sources of income as usual and not to rely on oil revenues. This money [oil royalties] is not for allowances; it is ring-fenced only for developmental projects,” he said.

Section 75 of the Public Finance Management Act, 2015 provides a formula for sharing revenues from oil royalties of the revenue streams from the oil and gas.

According to the Act, oil royalties will be shared among central government that will take 94 per cent, six per cent is allocated to local governments in the oil-producing Albertine graben. In addition, the central government will allocate one per cent out of its 94 per cent of the royalties to cultural institutions.

 

The Observer

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