Best contribution of Uganda oil is mindset, work culture change
Saturday March 04 2023
A quick-win stroke that Uganda Tourism Board can pull to boost domestic tours would be arranging visits for Kampala people to the oil fields in the west of the country for them to marvel at the infrastructure being laid there. It would be a culture shock as city folk get pleasantly surprised, or jealously shocked, to see a side of Uganda that is moving forward with the rest of the world.
Public sector underperformance frustrates Kampalans who, in desperation, clutch on to a glorious past, and woe unto you if you dare violate it. So, they spent half of February on social media quarrelling over some stolen iron sheets that had been meant for resettling reformed warriors and pastoralists in the semi-arid north eastern region, and the other half lynching some modestly talented and plainly under-polished singer for claiming to be better than a departed music icon.
Most Kampala folk know so little about the rest of their country that were Karl Marx to resurrect in Uganda, he would overwrite the word “religion” in his statement of its being opium for the masses with “social media”. Accustomed to driving in rugged, muddy or dusty tracks in rain or sunshine respectively, Kampalans touring the west would be forgiven to bet that areas of Bunyoro Kingdom around Lake Albert near the DR Congo border are in Europe, due to the standards of the so-called oil roads. Buliisa trading centre, now called a town, doubtlessly has the best road quality in Uganda.
Two years away
Drilling has started and pumping crude oil to the export market through Tanzania’s Tanga port plus refining some on the ground are still two years away, but the level of preparation that has been going on in the oil fields can be described as ideal by Ugandan standards. It leaves you wondering why public works in other parts of the country take longer than scheduled and get shoddily done, including a road that was fully paid for before an inch of it was built. Why the contractors in the oil fields are properly supervised, unlike elsewhere in the country, is hard to figure.
One big deal in the oil area is the newly constructed airport at Kabaale. This is set to be the real game-changer in Uganda’s and the region’s economy, because, once oil refinery starts, there will emerge many industries in the area using the petroleum derivatives or by-products, whose higher-value products will be transported swiftly to markets on the continent. This will change the century-plus description of the centrally located country as land-locked to air-linked.
The airport, though principally built for delivery of heavy equipment for setting up the oil works over the next couple of years, is set to be even more important for flying cargo to destinations in Africa and beyond. For, while traditionally air transport has been described as expensive, it is suitable for high-value and perishable goods, both of which Uganda is aiming at producing.
The high-value goods are both mineral and agricultural. Uganda is endowed with previously ignored or unknown rare earth minerals, and President Yoweri Museveni has ordered studies for production of batteries to power the emerging electric mobility industry. The country’s comparative advantage in agriculture is legendary and, with value addition, it can improve its export performance, leveraging lower transport costs, owing to aviation fuel cheaply refined next to the airport.
But, probably the biggest contribution of Uganda’s emerging oil industry is the changing mindset and working culture. Already, thousands of Ugandans are working in the oil fields and their culture contrasts sharply with our casual approach to work in Kampala. It is not just the workers, but management as well. This being a tough international industry, there is no room for local attitudes. Three primary companies are in the field: CNOOC from China, TotalEnergies from France and UNOC from Uganda. Their operations are intertwined in joint ventures, and everyone is putting their best foot forward. Surely, after the initial contracted 25-30 years of oil production, the country will be wholly immersed in a new, competitive work culture.
One activity, though, has ended: land speculation. The quick ones who acquired land in the area 18 years ago, when viable oil deposits were confirmed, have made a killing and moved on. If you buy the over-priced land in the area today, you can only re-sell it at a loss.
Besides labour and management, another beneficiary of the culture change is the government. All oil experts you talk to say Uganda has hammered out the best oil deal any developing country has ever squeezed from the international players — thanks to patience in negotiations. This contrasts sharply with the other deals the government makes with foreign contractors, which are often rigged against the country, frequently producing stories of shame and scandal. So far, it seems there will be no monkeying with Uganda’s oil.
Buwembo is a Kampala-based journalist. E-mail: [email protected]