Referendum Proposed to Determine Oil Money Usage

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Former Finance Minister’s Referendum Proposal

Former Finance Minister, Prof. Ezra Suruma, has put forward a unique idea for Uganda to consider: using a referendum to decide how the country’s oil revenue should be spent. This suggestion emerged during his keynote address at the Social Protection National Dialogue, held at Hotel Africana in Kampala.

The Proposal: A People’s Say in Oil Wealth Distribution

Prof. Suruma’s proposal centers around achieving social protection, which encompasses efforts to combat issues like poverty, poor health, and illiteracy. He believes that by conducting a referendum, the Ugandan people can express their preference for receiving shares in a permanent fund. This fund would grant them direct access to its earnings and, more significantly, a voice in its allocation.

With this fund in place, all citizens could partake in the decision-making process regarding the distribution of the country’s oil wealth.

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Social Protection and Economic Vulnerability

The proposed “People’s Fund” would be instrumental in providing social protection to various vulnerable groups in Uganda, including those in need of pensions, orphans, people with disabilities, the unemployed, and the elderly. It aims to ensure that the benefits of Uganda’s oil wealth are accessible to a broader spectrum of the population.

Taking Cues from Global Practices

Prof. Suruma cites the examples of countries like Norway and Alaska, USA, where citizens have a say in the expenditure of oil revenues. In 1976, the people of Alaska voted to create the Alaska Permanent Fund, earmarking a portion of mineral wealth for it. This fund has grown substantially through investments and has distributed dividends to the residents.

Ensuring Equitable Distribution and Transparency

Prof. Suruma argues that leaving the decision on oil revenue expenditure solely to civil servants could lead to inequitable distribution and susceptibility to corruption. When individuals hold shares in the fund, they can influence its leadership, demand accountability, and influence how the revenue is shared between the government and the people.

Current Framework: The Petroleum Fund

Uganda currently operates a Petroleum Fund, as established by the Public Finance Management Act. This fund is designed to receive proceeds from petroleum activities and allocate them for infrastructure and development projects. However, concerns have arisen about its management and transparency.

In 2020, a report by the Bank of Uganda indicated a significant drop in the fund’s revenue. Parliament later discovered issues regarding the fund’s cash flow plan and lump sum withdrawals.

Calls for Government Responsibility

Angella Kasule Nabwowe, Programs Director at the Initiative for Social and Economic Rights, advocates for a reduction in wasteful government expenditure on trips abroad and national events, as well as a more transparent and progressive taxation system. She underscores the government’s obligation to provide social protection for all Ugandans.

UNICEF Representative’s Call for Equity

Dr. Mohamed El Munir A. Safieldin, the UNICEF Representative to Uganda, emphasizes the need to redistribute resources to promote equity among the population. He highlights the disparities in privilege and access to government benefits, calling for a broader redistribution of these privileges.

Dr. Munir also stresses the importance of considering the needs of children in any social protection plans, given their vulnerability, especially in the wake of the global COVID-19 pandemic.

Government’s Role in the Discussion

The Second Deputy Prime Minister and Minister of East African Affairs, Rebecca Kadaga, encourages ongoing discussions among stakeholders to achieve social protection for the entire population. She emphasizes the importance of considering proposals like the Oil Fund in these conversations.

Theme of the Dialogue

The dialogue’s theme, “Investing in social protection across the life circle,” underscores the importance of comprehensive social protection measures for all stages of life in Uganda.

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