Archive for April, 2010

Great Expectations: Uganda’s mineral and oil fever

April 15, 2010

Managing wealth is managing expectations, and managing expectations is not downplaying them

Usually a journalist should do a story and not involve in it, get overwhelmed or despise it, I almost burst out in laughter when a man brought a jerrycan to an oil-exploration site expecting to get some crude as jaribu— vernacular jargon for a free sample of a product that a seller gives a prospective customer.  It was two years ago, during a stakeholders’ tour of the exploration areas and proposed site for setting up a mini oil refinery, when the resident of Kaiso-Tonya village in Hoima district appeared with his jerrycan to the amusement of tourists who included legislators, local leaders and journalists.

Until recently, people in that place still ask what happened to the promise of fuel and electricity which the now abandoned early production system, was to deliver.  This shows how far expectations from the discovery of oil deposits have reached across all levels of Ugandans from national planners to the middleclass, investors, politicians, cultural leaders, and now country people.  The concern about allowing expectations ride higher than realities is that it is the other factor that has been found to cause the so-called oil curse, besides secrecy and excluding locals residing in oil-rich areas from actively participating in the program of developing the resource.

‘Ignorant Expectations?”

Many Ugandans are expecting that the price of fuel will at least halve, when the country begins refining petroleum products locally, not considering that fuel is an international product whose price is determined at that level and not domestically.  Government planners are expecting more room in planning because the national budget could for the first time be fully financed using local resources not subject to conditions known to be imposed by donors, but Uganda is part of the global economy including institutions like the International Monetary Fund and others that pressure for democratic and economically rational budgeting. Cultural institutions such as Bunyoro where some oil fields are, are expecting special treatment in developing social services, yet other folks from West Nile have been heard saying that oil flows from there and deposits in Bunyoro, literally suggesting that the resource should be fully treated as a national asset and proceeds distributed equally.

Individual land owners are expecting to make a kill when explorers confirm presence of high-value resources on their plots, not knowing that the government valuing officer has parameters that take into a constitutional considerations that resources at a certain depth on any land in Uganda belong to the State and are therefore not part of the compensation package on top of the surface area.  Support sector entrepreneurs in areas like insurance, health, foods and beverages, logistics and other industrialists, are expecting a frenzy of business, not knowing that they must push for government policy that positions them to gain and limit on outsourcing, such as allowing for establishment of a re-insurance company for that sector.  People have been promised that the oil industry will create thousands of jobs.  But it seems it has not been thought of how the majority of indigenous employees will react when they find that almost all jobs that pay much higher wages in comparison to what they have been appointed to do, are occupied by expatriates as the reality is that Uganda will be short of technical skills needed in the new industry for some time.  Government is still considering whether to establish a new institution for higher learning for petroleum and mineral studies only, or begin with a faculty at Makerere University, but which ever path it takes, it will still take a couple of years before Ugandans can fully manage their mines and petroleum assets across all disciplines.

Generally many Ugandans expect life to become a bed of roses whenever the oil begins to flow.  But once reality strikes, and it begins to occur to people that the resource only catalyses economic transformation, and that they need to work even harder to gain from oil, life could already be a bed of thorns for many, and analysts say that this is often the beginning of social unrest.

Managing expectations is everyone’s role

I interviewed Prof. Venansius Barya Baryamureeba, Vice Chancellor Makerere University for a magazine published by the newly established Chamber of Mines and Petroleum.  I understand this Chamber will among other things, engage various stakeholders including the Executive, legislators, local leaders and companies to manage expectations, by helping beneficiaries understand what is realistically accrued to them., following a philosophy that; communication of truths about issues at hand to all stakeholders in a uniform manner, transparency and participatory management is arguably the best shot at managing expectations.

Barya like he is popular called uses previous well-intended government programs to illustrate a scenario of Uganda’s social welfare in the event that expectations and indeed the actual resource are not managed well.  For instance people got overly excited for the Universal Primary Education, and sat back because they did not have to work hard to pay for education, and instead bore more children.  “The government has good intentions, but to what extent do we communicate them to the people? Beginning with Parliament, there are people in Parliament who do not even know about these issues, and they are the ones supposed to go to the constituencies and talk to the people.  most people in political parties do not really understand these issues, so who is going to communicate them because they are the ones going to look for votes, you should be able to communicate some facts at least as part of your services to the people.”

Barya advised that the political leadership should borrow a leaf from faith institutions. “We have churches and different denominations, but there are things they communicate that are the same across the board, like values, how to bring up children, etc.  But what is common in this country among our parties? What message can we all go to a rally and say we want this message for every body? But because you want to be different as a party, you communicate the other message.”

He warned that as things stand in Uganda, political parties could use oil and minerals to divide the country.  “For instance someone will go to Bunyoro and say with federalism, this is your resource, so you should not let the government take even more than 50 per cent, and try to make sure that those resist, then another goes to Karamoja and says that you have a lot of gold, people should not rob you of your wealth.  So at the end of the day, you have a country where the leader is not in control of anything,” Barya said, “Even when you are supposed to educate people on a program like UPE, another party will be more interested in seeing it fail, they call it byoya bya nswa (empty promises), they are not interested in saying that as long as this government is in power let us help to make UPE a better program, and do an oversight role to ensure that the money is not stolen. So to me I see parties using this issue of oil to divide the people.”

Some critics argue that Barya’s appeal is insensitive of the fact that political parties must point out and capitalize on weaknesses of implementing a program by the ruling regime to gain political mileage, rather than do the work while incumbents claim all credit given the level of inadequate communication among the electorate.   They indeed argue that to curb corruption, the pressure groups find it more strategic to focus on the bad practices, rather than throw flowers in faces of the corrupt and poor managers.

But Barya insists that many people act out of selfish rather than national interest and it shows in failure to table convincing alternative policies.

I called up city lawyer Ely Karuhanga, President of the new Chamber. This guy who, I am told owns the Barbeque Lounge, a bar I visit down at the centenary park is also the Chairman of Tullow Uganda. He told me; “We need to work with the government to reach people and tell them the advantages of mining and petroleum projects, explaining what is accrued to them.  For instance for compensation, people must understand that it is the government valuer who puts a value to the land, and tells them what they benefit.”  It has happened before that investors find themselves stranded, when land owners demand outrageous compensation packages.

“We also need participation of legislators to ensure that laws affecting this sector are implemented, also on the part of investors because it is a high-risk business involving huge capital investments.  So we must ensure a conducive investment environment that respects the sanctity of contracts,” Karuhanga further told me.

To a significant extent expectations are legitimate because minerals are capable of giving huge economic benefits to a country when managed well, but if people do not understand how they can turn this mineral capital into the improved welfare they seek, they will inevitably become frustrated.

Financial analysts explain that managing wealth means managing expectation, and that managing expectations is not down playing them.  The first step usually is to anticipate proceeds and then agree on the strategic plan of how revenue is going to be used.  Secondly, communicate to all the leaders who matter at all levels whether in government or not including politicians, civil society, cultural and religious leaders, academicians, planners, the private sector, etc, and get them to partly own the process.  This group should decide on a single policy on the matter and communicate only that to masses regardless of political, religious, tribal or any other orientation, and let it be illegal to communicate otherwise.

Some people have advised that the strategic plan of economic transformation based on oil revenue should feature plans on things like investing in value addition so that farmers know that they will not drop their hoes for oil tankers, but sharpen them and gain from where the country has had an international economic comparative advantage for so long.

Raila’s enigmatic visit to Uganda

April 15, 2010

POLITICS; No permanent friends or enermies

Kenyan Prime Minister Raila Odinga’s visit to Uganda for his Easter holiday was not only a gesture of salvaging relations between him and President Yoweri Museveni after a diplomatic chill of over two years, but also breathed fresh impetus into the pursuit for regional integration.

Political analysts had warned that if relations between the influential leaders in the region are left to deteriorate further, it will reflect in their country-to-country relations accordingly, and boil down to failing the East African Community. For instance Uganda has just discovered oil and vast presence of minerals and will need a transport corridor through Kenya to the sea to commercialise her wealth, something that could be difficult if the two countries’ leaders do not click. On the other hand, Uganda is an important market for Kenyan products, and transit hub for goods that come from the Mombasa coast to other countries in the region, meaning that not cooperating could adversely affect nationals and regional economic welfare.

Mr. Odinga had a one-on-one full hour meeting with President Museveni at the Entebbe State House before heading to the countryside in Soroti district, eastern Uganda where he told a rally that he had a ‘frank discussion’ with the President on issues including; intra-regional trade, cross-border cattle-rustling, and the Migingo territorial question. It was the first time Mr. Odinga and President Museveni were meeting since Kenya’s general elections in December 2007 that culminated into bloody civil unrest.

None of the leaders ridiculed each other in public, but neither of them dispelled the notion that they were at loggerheads when observers accused President Museveni for meddling in Kenyan politics during the campaigns and hastily congratulating President Kibaki on declaring him winner of a vehemently contested election. On the other hand, some legislators from Uganda’s ruling party accused Mr. Odinga for dinning with the opposition here, partly why his campaign visit to Uganda in 2007 when he addressed students at Makerere University had minimal participation from officials of the NRM party.

Relations between the two men reached the bottom when Raila Odinga’s State visit to Uganda last year was canceled at the last minute because of a territorial dispute between Kenya and Uganda over the Migingo Island. Later, President Museveni was reported to have been abusive to the Jaluo community during his address to students at Dar es Salaam University, reports that provoked Kenyan youth to uproot the railway line that transports goods from the Mombasa coast to Kampala, and other dstinations in the region.

I learnt that certain politicians have been working behind the scenes to improve the leaders’ relations, and their meeting over Easter is just the beginning of clearing mistrust and building confidence. “I had a frank discussion with President Museveni about many bilateral and regional issues and I can assure that we have good working relations. Some things might have happened during the elections, but that is behind us now,” Mr. Odinga said.

When I personally talked to Odinga, and when he addressed a rally in Soroti, he pointed to the Migingo issue, cross-border cattle rustling and intra-regional trade as some of the things he discussed with President Museveni. “I told President Museveni that we can not be talking regional integration, then we quarrel over a piece of rock, and we agreed to quickly settle that,” Mr. Odinga said.

He also said that Kenya will arrest any people who come and raid cattle in Uganda, and return the animals. “Any one who comes from Kenya and raids cattle here is not a true Kenyan, and anyone who comes from Uganda and raids cattle in Kenya is not a true Kenyan,” he said. Mr. Odinga also said that Kenya is going to begin buying drugs from the new factory that is making life-prolonging drugs for people living with the virus that causes Aids.

I was told by a friend that on the Uganda side, Cpt. Mike Mukula a former junior minister for health, one of President Museveni’s chief mobilisers, and personal friend to Mr. Odinga who hosted him during his campaign tour in Kampala has been the mule behind repairing these relations. I visited Cpt. Mike at his country home in Soroti to verify some of these things; he told me, “It is very important that these leaders work together because of the influence they hold in the region, any problem between them will affect the regional integration we all looking for, so far we are on course to dispel mistrust and build confidence.”

Mr. Odinga used his visit to also cultivate some political capital at a regional scale when he visited and mingled with ordinary Teso people in Soroti district to drum up support for regional integration.

In Raila’s word
For the few minutes I personally talked to Raila he said; “It is our ordinary people who are the key to this integration, that is why we must engage them across the region and show that we are one.” Mr. Odinga’s address to a rally of hundreds of people in Soroti was a reminder of how things used to be in past, and why it is important to integrate. “When I first came to Soroti in 1958 with my father when he was fundraising for a memorial hall to be built in Kisumu, all we needed to show at the border in Busia was a driving permit. Business people, students and laborers used to cross freely. Why should I go and buy malaria drugs elsewhere when Uganda is now manufacturing them? We should invest here, and trade among each other before we think of the outside world,” he said.

The entourage
His entourage was indeed a statement of reaching out to the communities that exit in both Kenya and Uganda; Assistant Minister for Labour Odeke Ojaamongson, Minister for Fisheries Development Dr. Paul Otuoma, Minister for Medical services Prof. Anyang’ Nyong’o, and a legislator Justus Kizito, whose name is common among Ugandans, all have ancestry ties with Ugandan tribes including Teso people and Samias.

The Teso people who historically reside in Teso district in the western part of Kenya, and eight districts in eastern Uganda including; Amuria, Soroti, Kumi, Katakwi, Pallisa, Bukedea, Kaberamaido and Tororo are silently building a movement to reckon with in not only social, cultural, economic, but also political aspects under a joint apex body dubbed; Teso Development Forum (TDF). The ethnic group also has a cultural leader bearing the title Emorimori who receives allegiance from Teso people in both countries.

I found out that the scramble for new districts that has showcased rare political maneuvering in Uganda for the Teso region is being led by a joint task force that includes Ugandans and Kenyan Itesots. After getting two new districts in Uganda’s Teso sub-region, the taskforce is now in Nairobi lobbying politicians there for new constituencies in western Kenya where Teso people reside so that they can increase their numbers in Parliament. Analysts think that if this is also true for other ethnic lineages that extend beyond national borders in East Africa, then it will be clever for politicians especially those with regional ambitions to look for political capital there.

New ethnic-centric political order for East Africa

April 15, 2010

Ethnic streams that extend beyond national borders in East Africa could shape regional politics in anticipation of the political federation sooner than later, going by emerging theories over Kenyan Prime Minister Raila Odinga’s meeting with Teso people during his Easter holiday in Uganda’s countryside.

I chanced to talk to the popular politician for a couple of minutes when he told me that he was spending the Easter holiday here to visit old friends and drum up support for regional integration among the ordinary East Africans, although sources within his visit told me separately that he is cultivating political capital at a regional scale. I immediately thought that this lends credence to the school of thought that has hastily pitted Mr. Odinga against Uganda’s President Yoweri Museveni for a possible contest for leadership of the anticipated East African political federation. In 2007, President Museveni took a road trip through Kenya to Tanzania, and the way mingled with ordinary citizens talking regional integration and historical links among tribes and dialects in the region.

Mr. Odinga’s address to a rally of hundreds of people in Soroti district, in eastern Uganda was a reminder of how things used to be in past, and why it is important to integrate. “When I first came to Soroti with my father when he was fundraising for a memorial hall to be built in Kisumu, all we needed to show at the border in Busia was a driving permit. Business people, students and laborers used to cross freely. Why should I go and buy malaria drugs elsewhere when Uganda is now manufacturing them? We should invest here, and trade among each other before we think of the outside world,” he said.

When asked about issues of national supremacy as a threat to regional integration, Odinga said, “It is our ordinary people who are the key to this integration, that is why we must engage them across the region and show that we are one.”

His entourage was however a statement of reaching out to the communities that exit in both Kenya and Uganda; Assistant Minister for Labour Odeke Ojaamongson, Minister for Fisheries Development Dr. Paul Otuoma, Minister for Medical services Prof. Anyang’ Nyong’o, and a legislator Justus Kizito, whose name is common among Ugandans, all have ancestry ties with Ugandan tribes including Teso people and Samias.

The Teso people
The Teso people who historically reside in Teso district in the western part of Kenya, and eight districts in eastern Uganda including; Amuria, Soroti, Kumi, Katakwi, Pallisa, Bukedea, Kaberamaido and Tororo are silently building a movement to reckon with in not only social, cultural, economic, but also political aspects under a joint apex body dubbed; Teso Development Forum (TDF). The ethnic group also has a cultural leader bearing the title Emorimori who receives allegiance from Teso people in both countries. “We want Teso to be a factor,” Cpt. Mike Mukula, who hosted the Prime Minister in Soroti told me.

I also found out that the scramble for new districts that has showcased rare political maneuvering in Uganda for the Teso region is being led by a joint task force that includes Ugandans and Kenyan Itesots. After getting two new districts in Uganda’s Teso sub-region, the taskforce is now in Nairobi lobbying politicians there for new constituencies in western Kenya where Teso people reside so that they can increase their numbers in Parliament.

More in Uganda, Teso people have uniform positions on some national questions such as land ownership. For instance Itesots are vehemently against a proposal that empowers government to acquire land compulsorily, because unlike areas like Buganda in the central part of the country where the land tenure system is largely individual ownership, in the Teso, Acholi, and Lango region (east and northeast), it is owned communally, and only leased not sold.

They are now forging a formidable force comparable to Buganda to begin demanding for compensation for the losses they incurred during the war. Apparently, heads of cattle including long-horned cattle predominant in western Uganda were looted during the war, an injustice that is blamed for impoverishing the region many years later. Cpt. Mukula said, “There was a government emergency restocking program for two years, but this is nothing compared to what people lost, and this has caused them to hate the NRM government.” However the Teso people have been silent on the question of national governance where Buganda has been advocating for federalism, while the executive has decided of a regional tier system.

Leaders from the Teso Development Forum said that they have development plans on paper, but are now on a strategic course of galvanizing unity among Itesots within the region and in the diaspora to implement their plans.

Until these revelations, it is Buganda that has been known to be a major factor in national issues outside the Executive, and recently Bunyoro to a certain extent because of oil discoveries on its territory. However Capt. Mukula a man whose political stature has been an enigma since he was dropped from Cabinet over corruption allegations in the Ministry of Health told me that a new political order at both national and regional level was inevitable, especially now that people want to belong.

Political pundits who I talked to said that whereas multiple determinants in governance could remedy marginalization, they would deepen the cancer of tribalism beyond national frontiers to a regional scale, and possibly be the next cause of the ultimate collapse of an East African union for the second time. It is not a secret that leaders in northern Uganda have expressed the possibility of uniting with fellow Luos in southern Sudan to for a ‘Nile State’ one that would find ties in Kenya and Tanzania, because there are Luo there too.

Lydia Wanyoto a member of the East African Legislative Assembly told me that the assembly is in the process of designing structures of the political federation, and we want the final recommendations to be out to a referendum so that people own it. Whichever path it takes, ethnic lineages in the region could form the real political order in East Africa.