Oil & Gas conference held 23-24 January 2013, Serena -Kampala hotel

The Norwegian ambassador to Uganda has said countries in the East Africa region need to safeguard the oil revenues from financial mismanagement if they are to gain from the nascent industry.

Speaking at the closing of the oil and gas forum that ended on Thursday in Kampala, Thorbjørn Gaustadsæther said that the region was fast becoming a playground for petroleum industry heavy weights.

“There are needs for safeguarding the environment, for regulations and for convincing energy firms that their billions dollar investments are safe from financial mismanagement as well as political instability across the borders,” he said.

“It is no secret. Corruption is rampant within most countries of this region.” Using Uganda as an example, the ambassador said the petroleum sector in the country and the region at large will require “huge amounts of foreign investment. But as the former US secretary of state says, capital is a coward. It flees from corruption and bad policies, conflict and unpredictability. In other words, corruption is bad for business.”

The ambassador also noted that no East African state is yet fully compliant with the Extractives Industries Transparency Initiative (EITI). He said steps must be taken to secure budget discipline and develop more sophisticated financial systems accompanies with competitive auctioning processes.

“EITI compliance will build critical trust in the ability of the government of this region to handle the oil and gas resources on behalf of its people,” he said.

Gaustadsæther also noted that there were signs of improvement in the fight against corruption.

“There is cause for optimism regarding overall anti-corruption measures. The tools are there as are offers of assistance. Now what we need is the political will to act,” he said.

Mr Gaustadsæther also said there was great potential for regional cooperation and integration in regards to oil.

“Regional cooperation can yield very positive results, laying the ground for sound revenue management, infrastructural development, training and education and subsequently poverty reduction and development. We encourage the East African Countries to explore the various opportunities that exist.”

The two day conference was jointly sponsored by the Economic Policy Research Center in Uganda and the Africa Growth Institution at the Brookings Institution in Washington DC, USA.

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