Oil Money Not For Consumption

1982 Views Kampala, Uganda

In short
President Yoweri Museveni in a special address to parliament has emphasised that the oil money shall not be used for consumption but for capacity building.

President Yoweri Museveni in a special address to parliament has emphasised that the oil money shall not be used for consumption but for capacity building.

The president noted that oil money shall never be squandered on importation of luxurious vehicles, perfumes and travels but will be used to get cheaper sources of energy. He said the money will be used on Hydro power sites like Ayago and Isimba among others.

Museveni further noted that the money would be used to fund scientific innovation in government universities and institutions as well as form capital for scientists to commercialize their innovation. Much emphasis will also be put on training people in oil and gas sector.

And in the long run, according to the president, Uganda shall venture into nuclear innovation using the Uranium available in the country. He said some of the money from the capital gains tax is being channeled to the construction of Karuma power dam.

The president outlined how Uganda would benefit more from the oil venture compared to the oil companies. He observed that before the recovery of costs, the companies will be taking 74 barrels out of every 100 barrels produced while Uganda would get 26.

But after the recovery of cost, this amount would reduce to 42 barrels out of every 100 barrels while Uganda’s benefit increases to 58 barrels. This amount does not include taxes which are 30% of barrels and royalties which are 5% up to 12.5% of the gross production. Museveni placed the equity by the company at 15% of shares.

According to Museveni, taxes, royalties, dividends would raise the total government share to 152,366 barrels out of every 200,000.

Museveni also noted that there will be better oil agreements now and in the future compared to the period before 2005.