Remarks by Deborah Malac, U.S. Ambassador to Uganda at the Multi-Stakeholder Dialogue on Transparency and Accountability in Uganda’s Extractives Sector

Tuesday, August 28, 2018

Distinguished partners,

Few industries have the power to transform a country in the way that extraction does.  The wealth that lies beneath our feet can power industries the world over and unlock massive amounts of capital.  In the United States, the gold and oil rushes of the 19th century still resonate today.  And just as in every country that has experienced that sort of dynamic, those effects have been positive and negative, and utterly transformative in ways that are almost beyond understanding.  As Uganda prepares to deepen its development in the oil and gas sector and other extractives industries, it faces great opportunity and profound responsibility. Transparency and accountability are crucial ingredients of good governance under any circumstances, but this holds especially true in the extractives industry.

The industry requires heavy investments of capital, time, and technology.  The sheer scale of these efforts to move mountains and reshape the ground beneath our feet takes great resources, and has the potential to generate large revenues.  Likewise, the costs of mismanagement, malicious or otherwise, can quickly escalate.  These revenues can be a powerful driver for corruption and unrest.  Across the world and throughout history, mineral wealth has often served to undermine democracy, create violence, and increase inequality.  It is not an inevitable outcome, but 29 of the 51 countries classified by the International Monetary Fund as “resource-rich” are actually low- or lower-middle income countries.  The irony has been noted for centuries, but the reality is that the temptations associated with this sudden influx of seemingly limitless capital can be difficult to resist.  Mismanagement of these resources can have long-term negative implications for Uganda’s political and economic stability.  It is therefore essential that development and management of these resources be transparent and accountable.

Additionally, extraction directly impacts the physical land itself, and all those who depend on it for their livelihoods.  Farmers, certainly, but also wildlife and the tourism it attracts.  New roads will alter the ways of transport and ways of life, opening up new places for trade while at the same time closing traditional connections.  Unless properly managed, this disruption can affect individuals’ ability to sustain themselves, stir resentments in affected communities, and have far-reaching consequences.

This multi-stakeholder dialogue, therefore, comes at the right time.  It allows all of us to reflect on issues of national importance.  It helps us advocate for a extractives industry that insures equitable distribution of opportunities and benefits and reflect on what Uganda, as a country, must do to escape the “resource curse.”

USAID has been partnering with the UK Department for International Development through the Governance, Accountability, Participation and Performance Program to strengthen Uganda’s local governance systems.  We are working with civil society organizations to give Ugandans a greater voice in their government and to engage in advocacy efforts on behalf of other community members.

Recent reports by both governmental and non-governmental observers about institutional, procedural and policy loopholes in the petroleum and mining sectors remind us that recent positive developments need the support of all of us in order to ensure a well-governed extractives industry. These developments include the enactment of the Public Finance Management Act, and the continuing efforts of institutions such as Parliament, the Auditor-General’s Office, and the Inspectorate of Government.

To build a transparent and accountable extractives industry as a foundation for the country’s socioeconomic transformation requires still more. Uganda will need continuous review and reform of relevant governance frameworks, including policies, laws, and regulations, to bridge any existing gaps. The country must subscribe to international initiatives, such as the Extractives Industry Transparency Initiative, and adhere to regional commitments on good governance.  Artisanal and small-scale mining needs formalization, registration, and support. 

The relative inexperience of most Ugandan institutions in this sector requires continued institutional strengthening and capacity-building.  Together we must strengthen independent monitoring and oversight by civil society, media, the public and other independent observers; and we must implement relevant instruments, such as the Public Finance Management Act and the Access to Public Information Act, and respect constitutional safeguards regarding human rights.

I would like to thank the Government of Uganda for its past efforts to reform policy and law to make the extractive sector transparent and accountable.  I also wish to thank civil society actors—ACODE and others—for the engagements you have had and continue to have with government and private sector to enhance transparency and accountability.

I thank you all very much for joining us to ensure that the riches of Uganda are enjoyed by all Ugandans, and wish you all successful discussions.

Protea Hotel, Kampala
Issuing Country 

Last updated: August 28, 2018

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