UGANDA JOINS EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE.

Uganda’s application to join the Extractive Industries Transparency Initiative (EITI) has been approved, a move that is expected to open the deals Uganda has signed with different organizations in the oil and gas sector and other natural resources.

Approval of Uganda’s application to join the EITI made it to the 54^th implementing country globally and the 26^th on the African continent. This is a key move especially in light of the country’s burgeoning oil and gas sector. The country recently transitioned to the development and production phase of oil exploitation with major upstream and midstream infrastructure undergoing construction.

Since its launch in 2002, Extractive Industries Transparency Initiative has established itself as a global standard for promoting open and accountable management of oil, gas and mineral resources. The initiative aims to strengthen public and corporate governance, promote understanding of natural resource management, and provide the data to inform reforms for greater transparency and accountability in the extractives sector.

The EITI is composed of three categories of membership; implementing countries, supporting countries and outreach countries. It is implemented at the national level and this is overseen by a locally appointed Multi-Stakeholder Group (MSG) which is a coalition of Government, Civil Society and industry representatives.

 The decision to join the EITI was informed by the appreciation of the value of transparency as the country progresses with plans to develop her natural resource wealth. The initiative has the potential to strengthen tax collection, improve the investment climate, build trust among sector stakeholders and help create lasting value from the country’s mineral and petroleum resources.

As an implementing country, Uganda is required to timely and publicly disclose information along the extractive industry value chain which includes an award of contracts, beneficial ownership, revenues and expenditure from natural resources as well as costs to the environment and how they are to be catered to. This transparency in turn is expected to reduce the current mismanagement of revenues collected by holding the Government accountable to the public. Besides, it will also spur public debate around the previously seclusive sector and consequently guide sector reform.

As a nation embarks on oil extraction, Uganda has shown a commitment to ensure that it does not succumb to the dutch disease that has plagued most of the oil-producing countries. However, benefits of implementing the EITI, which are much anticipated, are hinged on the government being transparent and this has been quite a challenge in the sector. As Uganda commits to exercise transparency and accountability in the extractive sector, there are reasons to be optimistic about the future of the sector amidst fears.