Uganda urged to join the Extractive Industries Transparency Initiative

The Managing Editor of Oil in Uganda, a website on oil related developments in Uganda, Chris Byaruhanga has challenged the Uganda government to open up and embrace the Extractive Industries Transparency Initiative.

 

The Extractive Industries Transparency Initiative (EITI) is a global standard, where member governments declare income they earn from their extractive industries and the companies operating in those countries also declare the payments they make to host governments. EITI reconciles these two sets of figures and it is through such reconciliation that the anomalies in oil revenue are discovered.

 

In an opinion published in the Daily Monitor, Byaruhanga said “The Uganda government has been consistent, and politically correct, by maintaining that it will join EITI at an appropriate time.”

 

But then he wonders why it is all taking too long to materialize.

 

“Why has Uganda been slow to prioritise an already tried and tested transparency tool? Why can’t we, the citizens, be told how money is exchanging hands in the oil and gas sector?”

 

He believes Uganda should pick a leaf from countries like Nigeria that have embraced the initiative.

 

Just a week ago Nigeria’s President Goodluck Jonathan ordered Nigerian revenue collection agencies to recover $9.6 billion in underpaid or unpaid taxes and royalties from oil companies operating in Nigeria, following an audit of the country’s oil and gas sector stretching over the last 10 years.

 

Byaruhanga says for a long time now, corruption and successive weak leadership have ensured that half of the 70 million Nigerians remain in poverty, despite their country being the leading crude oil producer in Africa.

 

“So it is surprising, as much as it is admirable, when one hears that President Goodluck Jonathan wants the oil companies brought to book over unpaid money.”

 

This loss was discovered and reported following an audit by the Nigerian arm of the Extractive Industries Transparency Initiative (NEITI).

 

Earlier in August 2009, NEITI’s second report identified over $ 800 million of unresolved differences between what companies said they had paid in taxes, royalties and signature bonuses against what the government said it received. According to the NEITI, that sum exceeded the 2009 individual budgets for the Ministries of Education, Health and Power.

 

Later in the 2009-2011 audits, the NEITI revealed that the companies had avoided paying almost $10 billion, including $4 billion that the state-owned Nigerian National Petroleum Corporation failed to remit in oil and gas revenues.

 

It is clear that EITI has enabled Nigeria to make some steps towards the much-needed transparency in the country’s oil and gas sector, and it is on the basis of such case studies that the transparency activist wants Uganda to join EITI.

 

Besides, Byaruhanga notes that in 2010, the United States introduced the Dodd-Frank Act that compels American-registered companies to disclose payments to governments on a country and project-specific basis, while the European Union governments reached a political decision in April this year to implement the Accounting Directive legislation, the European equivalent of Dodd-Frank.

 

Looking at Nigeria’s case and all these developments around the world Byaruhanga wonders what there is to lose, if the Uganda government acts now and opens up its financial transactions with its corporate partners to public scrutiny.

 

“In any case, with the home governments of these international oil companies pushing for greater transparency in their dealings with host governments, that over-used ‘confidentiality’ clause argument that the Uganda government normally puts forward will get weaker and weaker,” The transparency activist reasons.

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