Oil in Uganda
Uganda discovered commercially viable oil deposits in the Albertine Graben region in 2006 and has since embarked on establishing effective management procedures to promote growth and development for the country. By the end of 2013, Uganda’s proven oil reserves were estimated by the Ugandan Petroleum Exploration and Production Department to be 3.5 billion barrels, which are expected to yield at least $2 billion per year for 30 years once oil production commences. In light of these potentially transformative discoveries, Uganda faces a number of policy choices, and the welfare of the local communities in the Albertine Graben region is a priority concern.
Oil exploration and production will certainly lead to social, cultural, economic and environmental changes for this region. However, we do not yet know exactly what these changes will look like or how they will occur, or, consequently, what policy responses Uganda should take.
Surveying the Local Communities Affected by Oil Discoveries
In light of the complex climate surrounding local community engagement and expectations concerning oil discoveries, the Economic Policy Research Centre (EPRC) in Uganda, in partnership with the Africa Growth Initiative at Brookings, is undertaking a household baseline survey in the Albertine Grabem region with the goal of exploring the social and economic impacts of oil activities there. The survey will specifically assess three broad areas: land challenges, population dynamics and health considerations; food security, employment trends and the environment; and governance and the private sector. The following describes background on each of these study areas and why EPRC thinks they will be important for the region
Land, Population and Health
Land is a very important resource. Several reports (e.g., Uganda Land Alliance, 2011; Bomuhangi and Doss, 2012) indicate that oil exploration activities, such as the digging of seismic wells and drilling, have already led to changes in ownership of land, conflict, and displacement as well as an influx of migrants vying for opportunities in the Albertine Graben.
Not only is this growing migration likely trigger population growth, increase land pressure, and escalate competition among the indigenous people and newcomers, it is also likely to place more demand on the already limited social services of education, health and water in the region. This large movement of people has implications for fiscal expenditure and allocation as well, making it critical to capture land issues, demographics and changes in social infrastructure, including schools and hospitals and other physical infrastructure aspects such as roads and telecommunications. In addition, there is a precedent of increased health and other social problems connected with oil exploration: For example, studies from Nigeria and Ecuador document increased health risks to communities as result of pollution from oil exploration. There are also risks associated with transfer of disease by migrant populations to their new communities (Dadiowei, 2003).
Food Security, Employment and the Environment
Oil discovery and exploration similarly have a history of altering food security and agriculture. Communities in the Albertine Graben are dependent on crop agriculture, livestock rearing, hunting, fishing and forestry, all of which are impacted by oil exploration and drilling. In addition, it is quite possible that the presence of oil will usher in new employment patterns as has been observed in some many Arab oil-producing countries. Our survey will create a baseline to study how the economic patterns of the Albertine region will change as more land is acquired for oil exploration and production. In particular, we will examine how such changes impact the availability of business opportunities and shifts in employment such as from agriculture to trading and other activities.
With population growth and displacement and as people search for new ranges, agricultural land, fuel sources, and settlements, it is likely that encroachment on forest reserves and deforestation will also increase. Along the same lines, oil exploration is known to have destructive environmental impacts. In our study, we will look into how community resource utilization and conservation change in response to environmental changes. For example, we will investigate if and how household access to quality water is impacted as well as if and how forest and game reserves are changed.
Governance and the Private Sector
Oil activities have also brought to light a range of governance challenges and expectations from local communities. The local citizens are particularly concerned with maintaining and protecting land rights as well as the equitable distribution of oil revenues and hope that the government delivers effective programs, laws and interventions that work for the community. But, how can the local people ensure that their rights and needs are met by the government? Our survey will explore in what ways and to what extent communities engage in citizen participation and demand for inclusion, stronger transparency and accountability from government. Scoring these aspects will further add to efforts of managing expectations and ensuring that government plans properly respond to the needs of the community.
Finally, and probably most importantly, our survey will explore if and how oil companies are contributing to overall community well-being in the Albertine Graben. Are poverty levels dropping or rising? What about inequality? Is education more accessible? Are people healthier? How are they benefiting, or not, from the oil discoveries?
Thus, while the discovery of oil in Uganda presents tremendous prospects for economic growth, exploiting these opportunities requires that government be prepared to effectively address the challenges that it brings particularly to the nearby communities (in this case, in the Albertine Graben). This baseline, commencing this March, will provide evidence to inform the government, other policymakers and the private sector so that they can enact effective policies and laws, and implement successful programs to ensure that the rights and livelihoods of the local communities are protected and improved.
Annette Kuteesa is a research fellow at the Economic Policy Research Centre (EPRC) in Uganda. EPRC is one of the Brookings Africa Growth Initiative’s six local think tank partners based in Africa.