Challenges Faced By The Government Of Uganda In Financing Education What Does the Discovery of Oil in Kenya Mean for Uganda?

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What Does the Discovery of Oil in Kenya Mean for Uganda?

The oil debate in Uganda has been the most dramatic in recent years. Available information indicates that the presence of oil deposits in Uganda was first confirmed in 2006 in the Albertine region in the west of the country by Heritage Oil, a British international oil and gas exploration, development and production company. Another discovery followed in Amuria district in eastern Uganda earlier this year (2012). However, the parallel discovery of oil in the Turkana region of northwestern Kenya led to a moment of dilemma. He, in the clear sense of the purpose, demanded knowledge of the future prospects of oil exploration for the country and other parties in the oil business.

Once the production capacity exceeds the demand in the local, regional and international market, the bargaining power of the country will drop as much as the prices and rewards of labor. The situation forces company owners to lay off workers or even create industrial strike conditions and instability in the country, as a response to low job satisfaction. In addition, there will be serious losses recorded by parents, financing institutions and the government after not finding the ultimate goal of retaining as much income as possible for the prosperity of their people to offset the costs of training their local expertise in oil production and management. The resulting economic confusion and setback ends up threatening national security, which in turn unsettles the political authorities. It will be in such circumstances that the discovery of oil will seem more fatal than not.

The indigenous population of the area took real pride in having oil fields in their midst. They had to quickly seek guarantees of percentage profits for rapid development and, probably, to regain their glory, as one of the most economically powerful people in the country. Unfortunately, the pride proved illusory as the prospects for economic dominance spread to a wider region of Africa. Some of the gains made so far by oil companies are significant, but may soon depreciate. Such benefits include: scholarships for higher education in petroleum and natural resource management, compensation money and health facilities. Concerns about ensuring the sustainability of these community programs can also cease. The same pride and disappointment was certainly shared by the rest of the nation.

The already existing cancer of corruption has already spread to the country’s oil economy. Ethics and integrity are never taken into account in all aspects of business operation. Licensing of oil companies, land grabbing, poor benefit system (benefits for the wrong people) and oil governance leave the nation in harm’s way. These vices began to damage the oil production process from the beginning, which only predicted failure. With economic uncertainty and anxieties looming, corrupt officials are even busier doing what they do best. That is, divert oil revenues and demand bribes from the oil companies as much as they can, privately, before the industry collapses. The same officials had recklessly steered the economy with the aim of saving their political faces by using the country’s resources to later make up for the losses using “pending” oil revenues. Now, with the discoveries of oil wells elsewhere in the region, it brings even greater shocks to them and misery to the nation.

The regional dominance and global approach of the master player can be the only savior of the country in such circumstances. He could use those attributes to further his financial interests. Fortunately, at this moment, Uganda has a lot of influence in the region and at the international level. It will only have to strengthen the existing balance of power and the state of affairs on the global scene. But as they do so, some countries may emerge to claim or reclaim regional leadership as well. For example, Tanzania was once a regional leader under Mwalimu Julius Nyerere (RIP) – it may want to regain its regional position. If this happens, the conflict of interests could lead to a regional security crisis, in which some belligerents would establish new positions of power and, ultimately, new economic positions.

And while Uganda’s regional clout counts more to win and dominate the oil market in the region and on the global stage, it lacks the know-how to surpass its credentials as an oil exporter. You have to rely on foreign knowledge at this point. Even the current plan to set up a regional refinery to ensure maximum oil profits faces a huge challenge for the country. With much local and international revulsion at political and economic corruption reflected in donor countries, it can be very disconcerting for would-be foreign investors to trust the country’s business environment. In addition, there are many options in the region and in Africa in general. So-called investors might be reluctant to invest in Uganda, where there has never been a track record of successful oil production, where poor governance is reflected in oil production, and where the country is at risk of breaching security, in preference to more developed economies. predictably safe.

However, if regional countries cooperate in oil production, management and trade within the framework of the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), the stability of oil prices and the economy national could be guaranteed and maintained. for the benefit of the population. This is so because there would be freedom of movement, common decisions on prices and profits and preferential treatment for traders operating within the regions. As is already the case, oil company staff will be relocated anywhere in the region or job seekers can choose to apply and work in any of the member countries. Overall, by doing so, the threat to regional peace and security, which was highlighted above, would be brought under control. The Ugandan government has already shown great wisdom in its preliminary work of facilitating regional integration and strengthening existing structures in those regional bodies.

It will also be important to maintain a vibrant agricultural sector, without which even the oil companies would not survive; as they would need food and energy to sustain the needs of work. Food should be produced regionally to increase accessibility and affordability to the wider population. It is understandable that if the booming oil business continues to offset food production, famine or high food prices could be the order of the day. In addition, inflation will increase the cost of production and reduce savings. It will therefore be irrational to specialize in oil production and forget all about agriculture, which explains well our history of economic survival.

In general, for a long time the Ugandan government has neglected the development of renewable and appropriate technologies, putting almost no energy and financial resources into research and innovations. It only waits at the end of the road for the sweat and achievement of individual citizens to claim it and later consider it their own; arguing that he created the conditions of peace for that person or persons to prosper.

It is widely believed that the discovery of minerals such as oil never happens without some form of colonialism manifested through the invasion of multinational companies in any such country. The authorities have long since casually expressed a great hunger for them. Multinational companies are often followed in oil-producing countries by the economic security agencies of their respective governments. And as these firms come from different countries, they begin to fight for the favors of the indigenous authorities. If the authorities of the day fall out of favor with any of them, the affected country uses its military resources to overthrow the authorities, preferably by one (usually the local opposition of the country) that will defend its economic goals. The Democratic Republic of the Congo (DRC) and the former Sudan have already gone through a similar cycle.

Indeed, the discovery of oil in Kenya creates a dilemma for Uganda. This requires more sophisticated means to carefully manage the resource, so that it still meets the country’s hopes and avoids unnecessary economic and political shocks. Among them are the strengthening of efforts towards regional and international cooperation, and the promotion of rational and pro-citizen or pro-national foreign investment. While this happens, it is also important that the country remains aware of the significant benefits of agribusiness investment and support for research and innovation.

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