Corruption threatens Uganda oil revenue-opposition
Fri, Aug 13 2010
* Uganda oil revenue threatened by corruption - opposition
* Government says oil money for infrastructure development
By Michelle Nichols
NEW YORK, Aug 13 (Reuters) - Corruption in Uganda will swallow billions of dollars in revenue from the East African nation's budding oil industry that is needed to build schools, hospitals and roads, says a Ugandan opposition leader.
Olara Otunnu, a former U.N. under secretary-general who heads the Uganda Peoples Congress party, said there had been no transparency on plans to develop the oil found in 2006 along Uganda's border with the Democratic Republic of Congo.
Otunnu, Uganda's foreign minister from 1985-86, hopes to topple longtime President Yoweri Museveni when the country goes to the polls in February ahead of the start of commercial oil production late next year.
British firms Tullow Oil (TLW.L: Quote, Profile, Research) and Heritage Oil (HOIL.L: Quote, Profile, Research) have found up to 2 billion barrels of oil in the Albertine Rift Basin and experts say the reserves could be four times bigger. Uganda stands to earn about $2 billion a year in oil revenue.
"Based on the current record all that money would be swindled," Otunnu told Reuters in an interview in New York. "All this is being handled personally and exclusively at the kitchen table of the president. we know nothing about it."
"We don't need to wait until oil begins to flow. We already know ... the oil revenue will become part of his personal ATM machine," said Otunnu, who could be arrested when he returns to Uganda for failing to appear in court this week on sedition charges related to radio show comments made earlier this year.
He says the charges are a bid by Museveni to silence him.
Ugandan Minister for Information Kabakumba Matsiko said it was widely accepted that East Africa's third largest economy has been blighted by corruption, but the government has systems and institutions in place to combat it.
OIL MONEY FOR INFRASTRUCTURE
"Otunnu is entitled to his opinion. Unfortunately he's blinded by his own hatred," Matsiko said. "This oil has always been there, but no previous government including the one in which Otunnu served ever thought about starting exploration."
"The president has stated on several occasions that the oil money will not be used for recurrent expenditure but long-term infrastructure development in the health, transport and other sectors," Matsiko said.
Museveni won power in 1986 and was credited with returning stability and economic vitality to Uganda, ravaged by dictatorship and civil wars in the 1970s and early 1980s. The country's economy is seen growing between 7-8 percent in 2010/11 from 5.6 percent in 2009/10.
But donors and global civil society groups accuse Museveni of suppressing opposition and free speech, tightening his grip on power and failing to rein in rampant corruption.
International donors said this week that they would trim at least 10 percent off their $360 million contribution to Uganda's budget in the year to June 2011 because of concerns over corruption.
Opposition parties have refused to work with the electoral commission, because they say it is corrupt, but Otunnu said that does not mean there will be a boycott of the election.
He also said negotiations continue among leading opposition parties to form an Inter-Party Cooperation coalition to field a single candidate against Museveni.
"Everything is turned into this corrupt enterprise," said Otunnu. "We must make sure ... that there is change, there's accountability, there's transparency -- that this oil will be a blessing for the people of Uganda," he said. (Additional reporting by Elias Biryabarema in Kampala; Editing by Jerry Norton)