Are oil host communities prepared enough on financial literacy?

The discovery of oil in Albertine Graben in Uganda is so far over fifteen years. A commonly known fact to Ugandans and we all anticipate to have our first oil taste in 2025 as most work in the first phase(upstream) are reportedly ongoing. As it has worked elsewhere, oil exploration is quite evidently associated with lots of projects, initiatives and businesses by government, private sector, non-governmental organisations, Civil Society Organisations and lots of business people being attracted in the oil-rich, Bunyoro sub-region-Hoima and Buliisa districts from across the world. We are also aware that this also attracting a lot of money but the question we are supposed to ask: Were the communities prepared enough to embrace the projects and absorb its effects to us, families and communities?

This comes at a time when the ratio of financial savings to Growth Domestic Product (GDP) in Uganda, is about 9 percent compared to Kenya’s 13 percent.

Saving and delaying spending has proved to be a difficult habit to instill in Ugandans and majority of people are living beyond their means.

I still recall a debate we had in my secondary school to which I opposed the then motion that stated, this house believes the discovery of oil in Uganda will do no good than harm and other similar discussions that tried to insinuate the oil in Bunyoro would be a curse due to the foreseen negative effects of the full exploration process. My arguments were usually positive against the views of my opponents then. However, I am afraid of being wrong with my views then as seriously actual exploration work is ongoing currently and some negative experiences have occurred and others threatening to manifest. These are environmental, social and economic issues.

For example, there are hundreds of people who were compensated as the project affected persons (PAPs) for the East Africa Crude Oil Pipeline (EACOP), a proposed oil Refinery in Hoima district, oil roads, among other oil production enabling infrastructure projects. However, it is disheartening to learn that above 50% of the PAPs instead of investing their compensations in opportunities, they squandered it on short term luxuries.  Some men were seen abandoning their families in villages to marrying other wives in urban areas, using the money to buy alcohol and living expensive lives while neglecting their usual opportunities in agriculture. The crosscutting result out of this was gender based violence that led to broken families, divorced couples, child neglect and later the worst scenarios of poverty hit members of these families and communities.

The scenario above and or other similar cases would be prevented if financial knowledge on prudent use and management of the aforesaid money was passed onto members of host communities. Literally, this would reduce on cases in which locals get overwhelmed upon receiving this windfall gain and learn to plan for their money.

With the ongoing operations and more expected projects in the region, a lot of misuse and mishandling of money will continuously occur if no better solutions preferably financial literacy projects and initiatives are taken by the government, financial institutions, private sector, Non-Governmental Organisations and other stake holders. We will see a lot of youth in oil jobs earning well but generously spending their monthly salaries and allowances on things which are liabilities such as binge drinking, prostitution and generous offers, among others. In the end, the curse will prevail in the region as was always debated on fifteen years back. Failure for this will be a sole responsibility to the members of the multi-stakeholders group in these oil projects.

The author is a Sustainability and Environmental Conservation passionate youth from Mid-Western Region Anti-Corruption Coalition (MIRAC).

Leave a Reply

Your email address will not be published. Required fields are marked *