My speech below has been the subject of some debate. In particular by my friend the new Presidential advisor on research. His response which he has circulated widely is a defensive effort most typical of other holders of the same office. However in so doing Mr. Morrison Rwakakamba makes some grave but basic mistakes. Firstly he conflates the issue of reconstruction of our system of government, in particular its checks and balances, with regime change. Also he makes more of the title of my speech, which while provocative as its intended to be, is nothing like the substance of the talk I gave. The idea of constitutional reform, review or amendment is a healthy one in Uganda today. I argue of course that the much needed reforms should be arrived at by way of a constituent assembly which is a more inclusive political process and can yield, beyond the law, a consensus in our political life that Uganda badly needs. Over to you.
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Good morning,
I would like today to argue the following
- That Uganda’s preparations for oil production especially the institutional investments and legislative arrangements are insufficient by themselves to prevent the traditional risks posed by oil production. The reason for this is that it will not be the quality or even content of these institutional and legal environment that will define the oil sector. Instead this sector will be shaped by the character of Uganda’s politics.
- I also want to put forward therefore, that alongside the legal and institutional reforms, Ugandans must within the next 10 years, attempt to come together to reconstruct the political system itself in order to guarantee not just commercial success from oil but to insulate Ugandan society from the havoc it normally causes.
- Finally, I am suggested that the mechanism for reform of the political system is a Constituent Assembly because of my belief that our present constitution and its system of checks and balances no longer functions normally. A CA is also a more inclusive process as opposed to reforms that one can expect merely from an elected government under the present conditions.
Welcome. Before I start I would like to extend my profound thanks to the organizers of this talk, the Open Society Institute of Eastern Africa and its sister organizations.
Especially, I would like to thank the Open Society Foundation and the Fellowship team in New York for a wonderful year as an Open Society Fellow.
Allow me to welcome as well our online audience to this discussion titled “ Why Uganda needs a constitutional crisis; the legal and Institutional limitations to Uganda as one of Africa’s latest oil producers.
The hash tag for this conversation is Uganda2022, reflects the heart of the matter.
By 2022 it is expected that Uganda will have started producing oil from the Albertine valley.
By my own calculations, Ugandans in 2022 will also have a new President.
Thus, in the next decade we will bear witness to a double transition, one political and one economic. This double transition is quickly approaching. The question is, will we be ready?
I am here today because we are not ready. But I believe we can be. I believe we can prepare our country to make her first peaceful political transition in history. I believe we can produce and export Uganda’s resources to the benefit of all Ugandans, and not a precious few.
Oil had first been discovered in 2005. 2005 was also an important year of major political changes that included a return to multiparty politics and controversial constitutional amendments that resulted in the lifting of presidential term limits.
Since then some estimates put Uganda’s oil reserves in excess of 10billion barrels pending further exploration. Oil and politics have been tied from the beginning, and will continue to be tied into the future.
Today, the oil generation are 15-25 years old. In 10 years, when commercial oil starts reaping benefits they will be in their thirties and forties.
This is the generation for whom the economic changes brought about by oil will mean the most. They face, as we do now, a choice of reform or revolt.
Alongside the preparations for oil production, we are simultaneously confronting another problem, that of a peaceful political transition. Uganda has never had a peaceful handover of power from one ruler to another, or from one government to another, save for when the Union Jack was lowered at Kololo to raise the national flag, marking independence from the British in 1962.
Since then only violent political competition and eventually, civil war, have determined who governs this country, with disastrous consequences for Ugandan society, its economy and its citizens.
The violence of the first half of independence meant that public institutions, commercial ventures and peaceful political competition could never take root.
War also saw a lost generation- the independence generation, many of whose professional lives were disrupted. Many of our country’s most brilliant minds were forced flee to exile or perished in Uganda’s killing fields.
Lack of political stability has been a problem for Uganda’s petroleum prospects historically. The British colonial authorities postponed plans to commercialize oil several times from the 1900’s due to war or poor economic conditions, including the situation created by the world war of 1945 and thereafter the changing political landscape of emerging independent Africa.
Uganda’s first petroleum legislation was passed in 1957, just a few years shy of official independence. But violent political conflict after independence acted as a permanent filibuster for petroleum exploration.
Oil exploration work continued to suffer after the 1981-86 war especially in areas north of Lake Albert where the LRA managed to create unstable conditions until the Christmas of 2005.
In fact its in Murchison National Park and the areas that the most promising prospects for oil have been found. Perhaps the most vivid example of the human suffering that epitomizes this problem is the history of violence in the oil areas of today.
Twice during the colonial experiment and later in post-independence Uganda the communities known as the Luo-Babito, or the contemporary societies of the Banyoro in the south of the Albertine and their Luo cousins in the north face virtual extermination.
In the late 1800’s, the colonial war on Bunyoro waged with a scorched earth policy ravaged the proud and prosperous Kingdom of Cwa Kabalega.
Thereafter starting in 1987, a war of containment in Northern Uganda, waged with the same ferocity, lasting over 20 years, brought the Luo cousins of the Banyoro to their knees.
Untold human suffering in horrible camp conditions in both cases crushed an entire society with death, disease, torture and degrading treatment.
In fact one of the supreme ironies of Uganda’s oil story is that later it was a British oil company founded by former soldiers that discovered oil. That company, Heritage Oil and Gas, was led by Anthony Buckingham, an ex-soldier in Her Majesty’s government who made his fortune in Africa as head of a military consulting company, or if you prefer a modern day mercenary.
As we can see political stability and the longevity of a viable constitutional order are critical not just for oil exploration and commercialization more so in where no constitution has fully survived a change of government.
Nearly every government that took over power created its own constitution or legal arrangements that overrode the preexisting constitution. This was the case in 1967 and the rule by military decree after the Idi Amin coup of 1971. Uganda’s experience is also an African one. Post-independence African governments that were successful in producing oil have done so in conditions of violent political competition, and operating through weak and unstable institutions. This crop of pioneer producers, including economic giants like Nigeria and smaller nations like Equatorial Guinea, have come to symbolize the so-called curse of plenty or the resource curse.
Perhaps the worst example of all is the Democratic Republic of Congo whose weak national institutions and history of political conflict and war have stunted what is undoubtedly one of Africa’s most naturally endowed countries.
In 1990, the government of Mobutu Sseseko signed a joint exploration and production agreement with Uganda. This unitization agreement still stands as one of the most progressive agreements in Uganda’s own oil story. It covers common ownership and production of oil in the Albertine Graben. However the progress of exploration on the Congolese side of the border has lagged behind Uganda’s recent success in part due to continual insecurity and political agreement in Eastern DRC.
Thus to answer the questions of our collective future, we must urgently ask ourselves questions with no easy answers. We must discuss, debate, and decide which political and public institutions will be capable of being the responsible midwife of the coming years.
Are our current political institutions capable of overseeing a historic peaceful transfer of power by 2022?
Will these institutions facilitate the prudent management of oil revenues?
The answers to these questions will define our collective responsibility to our shared future.
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For the oil and gas sector these questions are important to its commercial success. Uganda’s oil discoveries are unique and present new challenges to the government and oil companies, challenges that are found nowhere else in the world. These challenges include Uganda’s geographic location, the unique history of the great lakes region, and the location of the oil fields themselves.
Uganda is landlocked, so commercializing its oil involves exporting to both regional and international markets. This requires stability not just domestically but regionally.
Uganda intends to lead commercialization with heavy investments in a local refinery. The feasibility of this policy requires stable political and public institutions at home and viable regional markets especially in the East African Community. Oil in Uganda is also situated in the volatile western border where violent conflict continues in the DRC and large stateless areas the size of Uganda itself present real security challenges.
Perhaps the most unique challenge is that all the oil in Uganda, including prospective new areas, are located in national parks and protected wetlands or around and within water bodies like the trans-boundary Lake Albert which is shared between Uganda and DRC.
Extraction of oil risks serious environmental damage. Environmental damage is not only a concern of Uganda, but is and should be a concern for all the riparian states. Lake Albert flows directly into the River Nile.
Livelihoods such as fishing and farming depend on the environmental sustainability of oil extraction.
In a worst-case scenario, contamination of Lake Albert or protected areas may trigger local and regional conflict and precipitate the flight of international oil companies whose profitability in today’s free markets depends on their reputation as responsible corporate citizens.
Oil production in Uganda thus faces the unique challenges of security in one of the most volatile regions in the world and of environmental protection for one of the most important water sources on earth.
These challenges can only be addressed by strong domestic institutions.
Do these domestic institutions exist today?
A look at the oil sector landscape today shows serious problems. One in particular stands out.
That of approach.
Most Ugandan institutions are constructed on what is known as international best practice.
This is a dilemma I want to address today.
Most optimists about Uganda and Africa’s oil sector, including myself, consider that the difference between Nigeria and Uganda or between Angola and Ghana is that between hindsight and foresight.
New oil and gas producers can look back at the mistakes old ones made and avoid them the argument goes. Subsequently across Africa, countries like Uganda and Ghana are embracing this so-called “international best practice” to benchmark their new oil and gas sectors.
Employing international best practice is the wrong approach. It is often presented as the answer to present and future problems, which it is not. Uganda has followed “best practice” path in many areas. In the oil and gas sector, new legislation, the oil and gas policy of 2008 as well as many other policies are presented as kosher because they are an amalgamation of best practice.
Best practice describes how things supposed to work under laboratory conditions. It is not things work in reality. Ultimately, the state of a country’s institutions, its unique history, its political culture and its environment hold sway over how carefully calibrated policies gleaned from mistakes elsewhere can be avoided.
In other words, the primary responsibility for institutional building is to look at one’s resources, one’s history and capacity not simply one’s ambitions.
Consider first domestic institutions charged with protecting the environment.
The National Environmental Management Authority – NEMA – is charged with regulating activities that may affect the environment. But NEMA, like many domestic institutions, struggles with funding and retaining of professional staff.
Thus, much of the professional expertise on environmental management is concentrated within the international oil companies. Professional expertise is nearly absent amongst NGOs in the non-state sector.
So dire is the human capital deficit that in one case the environmental regulator had to rely on the Chinese Company CNOOC for tests on the impact of underwater drilling on Lake Albert.
Why? Because Uganda did not have and could not afford the required laboratory tests. Subsequently NEMA director Dr. Tom Okurut gave permission for drilling to proceed – after tests were conducted on non-indigenous fish species in a Chinese laboratory.
There are many examples of this variety.
Even Uganda’s premier oil institution, the Petroleum Exploration and Production Department, is struggling to keep up with the pace of the sector. PEPD is an interesting story. In the 90’s when it was hunting for oil it was largely ignored by the government and politicians. This allowed it to quietly build a professional culture without undue interference. After the discovery of oil it has been stampeded by the interest of the government and the public. Its not quite the same institution.
The best practice dilemma can best be illustrated by the old parable of the Sower in the book of Matthew:
“ Once there was a man who went out to sow corn. He scattered the seed in the field, some of it fell along the path, and the birds came and ate it up. Some of it fell on the rocky ground, where there was little soil. The seeds soon sprouted, because the soil wasn’t deep, but when the sun came up, it burnt the young plants and because the roots had not grown deep enough, the plants soon dried up. Some of the seed fell amongst the bushes, which grew up and choked the plants. But some of it fell in good soil and the plants produced corn, some produced a hundred grains, others sixty and others thirty.
And Jesus concluded, “ Listen, then if you have ears”.
Institutions especially best practice institutions are like perfectly good corn seed. However their performance is dependant on the conditions they find. If the conditions are poor they die. In less than ideal conditions they will survive but not thrive. It takes truly good conditions for them to thrive.
Ugandans from all walks of life often say that the country has good policies but it’s their implementation that causes problems.
It’s their way of saying that the laws and policies may be good- but the conditions they confront fail them.
It is these conditions I want to address in the context of the legal and institutional preparations that Uganda has put in place for oil extraction at the close of this decade.
Like the Sower, can we reasonably expect these institutions to thrive? If not what can we do about it before they whither and die?
It’s useless to imagine institutional performance in the oil sector that is estranged from and isolated from the political system within which it operates.
This is the problem of sector-by-sector analysis that goes hand in hand with most appraisals of international best practice. The problem of present day reforms including the two petroleum laws, the proposed revenue management law and the institutions that will emerge, is that they do not define the oil and gas sector; the political environment does.
The Ugandan public sector is today ravaged by institutional inertia. A good place to start is to consider the massive delays on important national projects such as the National ID or even the construction of Karuma Dam, Uganda’s largest hydroelectric power project.
Procurement delays, largely driven by graft and corruption, now average 10 years and often raise the cost of projects by more than half. Uganda’s stellar procurement regime has not helped. The capital-intensive energy and road sectors are impaled by this problem, which is not about the institutional set-up per se. Corruption in procurement is a political industry.
Recent official government reports suggest over half the annual budget is stolen. According to the African Peer Review Mechanism- some 550 billion Ugandan shillings leaks out of the system every year. That’s about 3bn dollars in the next 10 years — enough money to build the oil refinery Uganda wants.
Corruption does not only lead to tremendous leakage of cash. It also saps the energy of the professional classes, many of who are fleeing the country whenever possible. Public sector corruption leads to poor allocation of resources and talent.
The Auditor General, who annually examines government accounts, believes that the current state of corruption will overwhelm the oil sector.
One embarrassing episode was the admission by the governor of the Central Bank governor –an independent institution created by the constitution- that he was unable to prevent the draw down of the national reserves for the purchase of military hardware in 2010.
It is not possible to reform such a system through laws and policies alone. We must reform the political system itself, including its system of checks and balances.
An overhaul of our political system will take time, debate, and most of all, compromise. The ballooning size of government and profligate corruption have occurred because they benefit many of those whom we have entrusted to lead this country. They do not benefit the vast majority of Ugandans. They are also a product of a political system that still relies not on the strength of good policy but on the robustness of political patronage.
And so we are all headed for a train wreck unless we do something now.
Time and tide, they say, wait for no man. Political and economic transition are on the horizon and we need to prepare ourselves. Preparing ourselves involves addressing four key issues.
I believe addressing these issues will require a constitutional review.
One, we must reduce the size of government.
Two, we must strengthen checks on the executive.
Three, we must create incentives for a peaceful transfer of power.
Four, we must transfer to complete and real civilian control of the military.
There is near universal agreement in Uganda that the size of the government, which is driven mainly by the requirements of political patronage, is too big. The growth in the official bureaucracy is not a growth of competence.
But how can one re-size the government, reduce the number of Mps without a major constitutional overhaul?
Another defining feature of the Ugandan political system today is an oversize, expensive and domineering Executive. The impact of a dominant executive is the near complete erosion of the system of checks and balances between the different arms of government.
You can refer to the present and widely published crisis in the judiciary following the re-appointment of retired Chief Justice Benjamin Odoki.
How can one provide for a less powerful Executive without a constitutional review?
Let me pause here and share a proposal that I have made in the past which has been met with some cynicism.
Namely that I would like to see the next basket of constitutional reforms include a permanent immunity for President Yoweri Museveni. A similar arrangement was made to transition the long reigning government of Augusto Pinochet in Chile. The idea was to create a peaceful political transition that takes into account the unique political history of a country.
We must pave the way for our president to transition to a new position that acknowledges his achievements while creating room for new ideas and leadership.
Perhaps last and not least on this list of transitional challenges is the place of the Ugandan military establishment in society and politics. After the 1986 victory of the NRA that later became the Ugandan army, its leaders formed and have continued to lead the government subsequently participating in electoral politics.
This has lead to accusations of institutional bias against the army and the other security organs especially its continued representation in the national assembly.
How can Uganda provide for an independent military without reforming the constitution?
In the next decade, Ugandans have an opportunity to reform the political system itself,and in so doing provide for room for institutions that will allow our people and economy to flourish.
It is a safe political transition that will determine the operating environment for the institutions of the future. It is a stable economic transition that will allow us to support our rapidly growing population. By 2022 we will know whether we have succeeded.
My own proposal to fit this goal is for Ugandans to seriously consider a constituent assembly to reform the constitution and re-organize the government. I propose a constituent assembly, as opposed to other forms of constitutional reform, because such an assembly provides the best chance for an inclusive process.
But no matter the institutional forum, it is the process of debate that will create an environment where prudent choices are made about Uganda’s challenges and opportunities. I would like to end by congratulating the Ministry of Energy and the Petroleum Department for their efforts to maintain a professional approach to this sector, and to other government departments who have supported them.
Thank you.
