Bunyoro hopes of oil wealth rise as colonial treaty is found

The Bunyoro region’s hopes of getting a lion’s share of the oil wealth from recent discoveries in the region now hinge on a 54-year-old colonial era agreement that assigned the kingdom “a substantial share” of proceeds from any mineral wealth exploited on its territory.

Kingdom officials tell The EastAfrican that they have initiated high-level contacts with the central government to bargain for a fair share of oil wealth based on an agreement signed between Bunyoro and colonial authorities in 1955.

Article 36 of the agreement between Bunyoro Kitara Kingdom and the British Protectorate government states: “In the event of any mineral development taking place, a substantial part of the mineral royalties and revenue from mining leases shall be paid to the native government of Bunyoro Kitara.”

The agreement document, a copy of which The EastAfrican has seen, has surfaced soon after the executive approved a new National Oil and Gas Policy that designates the oil resource as a national asset.

Energy-sector sources say the government is still in the process of designing a new oil revenue law that will determine how oil proceeds are shared out between the central government, local authorities and landowners.

Bunyoro argues that while kingdoms were abolished in 1966 by the first Milton Obote regime, its agreement with the protectorate government was never annulled, so still remains valid and should therefore be the basis for any negotiations over royalties to the region.

Officials from the kingdom told The EastAfrican that they have written to President Yoweri Museveni on the matter, and are eager to start negotiations.

Bunyoro Kitara, one of the most powerful kingdoms in 19th century East Africa, is located in western Uganda, home to the oil-rich Albertine Rift. 

The kingdom still commands respect among a significant portion of the country’s citizenry, and is currently involved in litigation with both the Ugandan and British governments, which if successful could strengthen their claim for a lion’s share of the oil wealth. 

However, Hilary Onek, Minister for Energy and Mineral Development, said that the matter has not yet reached his desk, but advised that the government follow the new policy of managing oil wealth as a national asset.

We now have a policy we are following, so if Bunyoro feels aggrieved, they should instruct their Members of Parliament to try to change the law through the House,” said Mr Onek.  

On the part of the kingdom, what should be negotiated with government is not the validity of the agreement, but the share it deserves, an important issue not stated in the colonial pact. 

“We originally wanted a share of 5 per cent, but we have since reviewed our position, and we would like to negotiate the share with government because the agreement does not state it,” said Yadezi Kiiza, newly installed Prime Minister of Bunyoro.

Hundreds of thousands of barrels’ worth of oil reserves have been confirmed in ongoing exploration activities in Uganda, validating prospects of substantial revenue from the country’s next main export.

As far as oil wealth sharing is concerned, the National Oil and Gas Policy stipulates that the biggest share will remain in national coffers, while smaller shares go to the local government in the exploitation area and the landowner under whose property the oil is drilled.