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Despite improvements in Uganda’s natural resource administration, the country’s nascent oil and gas sector, as well as mining, are still classed as weak, with expanding gaps between rules and practice, which might stymie the country’s effort for openness, according to a new index.
Uganda got 49 points in the petroleum sector, up to five points from 2017, and 55 points in mining, according to the 2021 Resource Governance Index (RGI) released on September 2.
The index, published by the Natural Resources Governance Institute (NRGI), said the higher score for oil and gas is driven by improvements in revenue transparency, governance of Uganda National Oil Company and reporting on the Petroleum Fund.
“Despite the positive upward trend, challenges remain, placing the governance of Uganda’s oil and gas sector in the ‘weak’ performance band of the RGI,” said the index.
For instance, oil and gas licensing received a “failing” score, hampered by the absence of a cadastre, lack of beneficial ownership rules on public disclosures and the government’s failure to disclose contracts with oil and gas companies.
The NRGI added that although numerical fiscal rules are documented in a public policy, these are not enshrined in law and there is no adherence requirement or monitoring by the government.
The NRGI is a New York-based not-for-profit organisation, which advocates for good governance in natural resources.
Paul Bagabo, the Uganda-based senior officer for the NRGI said there are some failings in the licensing process, which the country needs to address to build a more transparent sector that is at par with better-performing countries.
“Without a publicly available cadastre showing who has the licences for 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,” he said.
