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Management Of Uganda's Exatractives Resources Improves-NRGI

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The index by Natural Resources Governance Institute (NRGI) rated Uganda's Mining Sector as slightly better governed than oil though still in "weak" category. It finds that like the hydrocarbons sector , licensing and local impacts are a problem.
02 Sep 2021 11:52
The NRGI found Uganda's governance of impacts of oil and gas lacking.

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Uganda has made some progress in the governance of its natural resources, but is still classified as “weak” in this regard, according to a new assessment.

In the 2021 Resource Governance Index, experts found small improvements in the country’s governance of the oil and gas sector, but point to particular failings in the licensing process.

  “Without a publicly available cadaster showing who has the licenses to which blocks, and without the disclosure of contracts between the government and companies, we Ugandans are largely in the dark about who has the right to explore and extract oil, and on what terms,” said Paul Bagabo, Uganda-based senior officer for the Natural Resource Governance Institute (NRGI), which publishes the index.

“We also don’t know who owns the companies with which the government does business, and therefore are in need of laws requiring the public identification of ‘beneficial owners.’” 

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NRGI also found Uganda’s governance of local impacts of oil and gas projects to be lacking, citing the inability of citizens to access environmental and social impact assessments without a waiting period and paying a fee.

NRGI did note improvements to the governance of the Petroleum Fund, but laws regarding deposits, withdrawals and investment rules scored poorly.

  “There is fierce debate internationally and within Uganda about the role of emerging oil producers amid the transition to green energy, as well as the coronavirus pandemic,” said Bagabo.

“A transparent and accountable oil and gas regime would ensure that revenues from oil operations are invested wisely to avoid ‘stranded assets’ as importing countries reduce their appetite for fossil fuels.”   NRGI rated Uganda’s mining sector as slightly better governed than oil, though still in the “weak” category.

Like the hydrocarbons sector, licensing and local impacts are a problem, the index assessors said.

Stronger points on the mining side were the existence of an open mining cadaster, reforms in the fiscal regime and robust rules for disclosure and auditing of the sub national resource revenue sharing mechanism.

“In addition to problem areas in the mining and oil and gas sectors specifically, resource governance in Uganda is also hampered by a poor overall ‘enabling environment,’” Bagabo said. “Inadequate institutional arrangements for the control of corruption remain a challenge, which may impact our ability to govern our resources well.” 

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The Resource Governance Index (RGI) serves as key point indicators in the extractive sector governance in resource producing countries around the world. It also serves as a global benchmark, country and sector diagnostic tool, and a roadmap for policy and practice reform.

According NRGI, effective governance of the of oil, gas and mining sector is a persistent challenge around the world. If well managed, it has been found that resource wealth has the potential to improve the lives and livelihood of over one billion people living in poverty in resources rich countries.

The lack of transparency and absence of accountability means that citizens often don’t see the benefits of their resources.