Finance Minister Rejects Calls for Separate Law On Oil Revenue Management

2004 Views Kampala, Uganda

In short
The Petroleum Revenue Management contained in Part VII of the Public Finance Bill is expected to govern the collection and use of money from the oil industry.

Maria Kiwanuka, the Finance Minister has defended the decision by government to present the Petroleum Revenue Management for approval as part of an overall Public Finance Bill contrary to calls to have a separate petroleum revenue management bill. The Petroleum Revenue Management contained in Part VII of the Public Finance Bill is expected to govern the collection and use of money from the oil industry. However, its inclusion in the general bill governing the rest of the country’s economy has raised concerns among a section of the public. But Maria Kiwanuka, the Finance minster says that the decision was made to help demystify the high expectations the country has placed on the oil industry.

She says lessons of best practices across the globe recommend avoiding a parallel system for the collection and utilization of oil revenues adding that, all revenue collection whether from oil or other sectors of the economy would be conducted by the Uganda Revenue Authority with related government agencies and only used with approval by parliament to ensure accountability and transparency. Kiwanuka explains that even Ghana that has been having separate laws for oil revenue management and public finance was also in the process of merging their laws similar to a single Public Finance Act.
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She however acknowledge the fact that there were macro economics and budget difficulties of managing large and volatile resources such as oil that could easily lead to stagnation of other sectors of the economy and corruption, a characteristic of what is generally referred to oil curse.
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Shem Byakagaba, a Managing Consultant at Lantern Consult International says the drafting of bill was affected by absence of widespread consultation from people who could have provided insights. He says the bill lacks specifications on how major functions by key institutions such as parliament will be carried out.
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Revenue Watch Institute – RWI –, an organization that promotes transparency and accountability in managing oil, gas and mineral resources for the public good has made several recommendations of how the Uganda’s Petroleum Revenue Management could be improved. Among them, it’s says there is need for inclusion of mandatory reporting of payments from oil companies, disaggregated and in an easy-to-use online format, transparency of in-kind oil receipts and specification of role and mandate of parliament among others.
RWI also calls for explicit prohibition of using the oil money as collateral on public debt. The Public Finance Bill with the section addressing Petroleum Revenue Management is the one of the two bills concerning oil left before parliament following the approval of the Petroleum Exploration, Development and Production Bill this month.