This second issue of International Alert, Uganda’s Investing in Peace briefing paper series reviews the current status of oil exploration, plans for production, and the policy environment for managing oil in Uganda. Its focus is on the potential for oil to trigger or exacerbate violent conflict in Uganda at different levels: national, local and cross-border with neighbouring Democratic Republic of Congo (DRC). Alert’s research suggests that conflict risks associated with oil have to date been overlooked. Yet even at its current early stage of pre-production, oil has already contributed to an increase in tensions. Moreover there is every danger that this could intensify as the sector moves into production and as new blocks are explored in the future. In order to contribute to the broader effort of harnessing Uganda’s oil for peace and development, this report promotes greater understanding of such conflict risks as an essential first step towards mitigation. It is Alert’s view that with a “conflict-sensitive” approach to developing the industry, any future conflict related to oil can be avoided.
Ugandahas been described by the oil industry press as Africa’s ‘hottest inland exploration frontier’.Current estimates of the country’s oil potential (around 1 to 1.5 billion barrels or bbl of recoverable reserves) would put Uganda among the foremost of African oil producers.Given the recent volatility of oil prices, it is difficult to estimate Uganda’s likely revenues from oil. Yet whatever the oil price, if production goes ahead without hitches, the country’s budget looks likely to receive a major windfall – potentially doubling or even tripling current export earnings.
Such a boost to national income offers Uganda a unique and exciting chance to alleviate poverty and create broad-based development and improved standards of living across the country. As a shared resource between Uganda and the DRC, oil also has the potential to signal a new era of cross-border cooperation in the wider Great Lakes Region. But international experience points to challenges which are often faced by resource-rich developing countries in translating mineral wealth into peace and prosperity. Much has been written about the “resource curse”. Developing countries with inadequate institutional frameworks that become reliant on oil and minerals can see a deepening of a range of political, economic and social challenges, including a higher likelihood of civil war and social instability.
Alert’s analysis of oil-related conflict risks in Uganda presented in this report is based on extensive consultation with a wide range of individuals and institutions at a national level and in oil-affected districts over the course of the past year; as well as review of press reports and literature.