Business News of 2014-06-11

Gov’t decision key in resource development

Mr George Lugalambi, Media Program Officer, Revenue Watch Institute, has said good implementation of economic decisions by African governments founded on strong governance was essential to resource development.

He said the extraction of natural resources like minerals, oil and gas in most parts of Africa was at an infant stage, a critical time at which key important decisions that have long term impact on the growth of the extractive industry were being made by various stakeholders.

Speaking at media training for 30 African Journalists in Uganda, Mr Lugalambi emphasized the role of government in making and implementing such decisions in the extractive industry.

He said government in its role of planning for the eventual utilization of these natural resources must put the protection of the interest of its citizens at the forefront and make good decisions by involving the local people, managing revenue and making investment for sustainable development.

Mr Lugalambi said a larger part of Africa has vast natural resources potential with less success stories being recorded except for South Africa and the northern part of the continent where oil reserves has been exploited exhaustively.

He said countries like Uganda, Kenya, Ghana, Tanzania and South Sudan had put in place strategies, policies, regulation and litigation to harness these natural resources so that local people and the countries at large can benefit.

He said Uganda for example, despite discovering oil and gas in 2006, is still drafting national laws that are aimed at directing the oil and gas industry, a sector which the country has hinged most of its economic aspirations, including poverty alleviation.

He said lack of such laws had disabled the country to put in place a National Oil and Gas Company, a regulatory authority and to pave way for key infrastructure development like the refinery, pipeline and storage facilities.

Mr Lugalambi said on many occasions the Uganda government officials had said that the delay was a tactical move to avoid mistakes in managing the resources.

He said the country had entered into significant contracts with oil and gas companies, but the contents of these agreements, including the Production Sharing Agreement, had remained unknown to the public.

He said young governments in terms of developing natural resources are disadvantaged because they lack the expertise to explore, extract, add value, transporting and facilities to transport the products to the markets.

“The market itself is a hurdle as the local market lacks the ability to consume natural resource products especially minerals either as raw materials or finished products. This means that the investors in the extractive industry either puts in place facilities that add value to minerals and refine the oil to be consumed locally or exported to European and Asian markets” he added.

He said the lack of ability to add value was a disservice to the country because raw materials were sold cheaply as opposed to when value has been added.

“In the natural resource decision chain, governments as people who make a decision on behalf of their citizens are expected to exhibit transparency, effective management by promoting good governance, policy formulation and implementation and promoting accountability,” he added.

Source: GNA
« Previous | Next »
Sponsor Links
News Categories
Site Menu