President Yoweri Museveni outlined the plans his government has for Uganda’s future oil revenues on Tuesday at an oil and gas conference in Kampala. Mr Museveni said that whereas oil is usually seen as a magic bullet for Uganda’s development, it is only a small aspect of a bigger development story.
The president said oil was an “enabler” that would bring in “quick money” to work on the weak fundamentals without which the country would not develop. “We shall use the finite resources to build durable capacity for our economy,” Mr Museveni said.
The oil revenues will also be used to finance the construction of a new railway and a “few” roads. They will also fund science and innovation, irrigation across the country, renewable energy resources, and high tech education.
Mr Museveni, who was the chief guest at the second annual Uganda International Oil and Gas Summit, added that the oil revenues will not be used to import consumer goods, but will be put in a fund that will be used to develop more important projects.
But rather than dismissing the anticipated oil revenues – which are currently estimated to be worth about $50 billion – the president acknowledged their importance to Uganda’s development process. For the oil revenues to change the country, Mr Museveni seemed to argue, they have to be put to their best use on vital infrastructural projects.
The president opened his speech by emphasising the role played by infrastructure and human resource development in developing a nation. The two factors were responsible for pulling China – and to a certain extent India and Brazil – out of poverty into the ranks of prosperous nations, he said.
Producers and consumers are linked by infrastructure, while a highly trained human resource is important for an underdeveloped nation to realise its potential, he said.
A good example of a country that has done well because of its good infrastructure and human resource is Japan, according to Mr Museveni. Japan does not have any oil or minerals, and there is no agricultural output to talk of, but until recently was the second largest economy in the world. “Why?” he asked. “Because of human resource.”
The president credited highly trained Ugandans for helping develop Uganda’s oil resources. In 1986, he was approached by Shell BP about oil reserves in Lake Albert. But, he said he could not negotiate with them because there was no one on his team who knew anything about petroleum.
Government proceeded to advertise in the press for young Ugandans with undergraduate degrees in physics and geology so they could go and specialise in petroleum, Mr Museveni said. They were sent to the UK – Aberdeen, Imperial College – and “by 1989, we had a small unit of petroleum.”
Then, he was ready to negotiate.