Mitigating Political Risk in Uganda’s Oil and Gas Exploration and Sector:

Abstract

The discovery of commercial oil reserves in Uganda raised expectations of improved livelihood among the populace. However, there is concern prevailing political environment sequent to oil discovery and preceding exploration could lead Uganda to an oil curse if not mitigated. The purpose of the study was to access efficacy of policy, laws and institutional frame work to mitigate political risk in oil and gas exploration in Uganda. The study’s analytical framework was based on institutional economic theory by Ronald Coase. Using doctrinal research design the study was conducted based on legal concepts and principles of law, statutes, and case law relating to political risk in Uganda’s oil and gas sector. Findings I revealed political risks such centralization of authority in cabinet, repressing CSOs, Militarizing oil fields, Land ownership concerns, the unresolved Bunyoro question, and corruption with impunity among politicians in charge. The study also found that policy and law perpetuate political risk by further centralizing decision making to the Minister of Energy, Limiting independence of NOC, PAU and access to oil agreements and licenses. Parliaments oversight role on oil is Usurped by policy and Law. It was also revealed that institutional governance framework is weak and eliminates CSOs activity. A comparative analysis with Norway, Nigeria and Botswana indicates that political events in Uganda coupled with weak institutional framework to enforce policy and law relates more with Nigeria’s oil curse than with success stories of Norway or Botswana. The study concludes that oil curse is likely to become a reality courtesy of un resolved political and governance issues in the oil and gas sector. We recommend strengthening institutional governance of oil to reign in on concerns such as transparency and accountability, public participation (CSOs), resolving anxieties in Bunyoro and land ownership around the oil field. The oversight role of parliament on oil and gas should be reestablished urgently.