Monday, October 17, 2011


In January 2002 on the banks of the River Nile, President Yoweri Museveni turned on the ignition of a Caterpillar bulldozer, the ceremonial groundbreaking for the AES Nile Power sponsored Bujagali Dam.

Over the previous seven years government and the promoters of the $500m project had slugged through bureaucratic hurdles, political rearguard action and tortuous back and forth with a media savvy environmental lobbyists from here to Timbuktu.

Understandably Museveni was irritated by the circus and said as much in his uncharacteristically short speech that day.

Some of the opposition to the project led by MPs like John Ken Lukyamuzi, hinged on the fact that according to AES’ projections they would sell power to the grid at about 9 US cents a unit while at the time Ugandans were enjoying highly subsidized power at about 4 US cents a unit.

Lukyamuzi and company using this as a rallying point popularized the notion that the environment would suffer for the building of the dam.

Time waits for no man and certainly not for Ugandans, despite what they think.

Events a continent and an ocean away in Argentina conspired to force AES’ hand and it had to pull out of Uganda.

That aside had AES been able to start building in 2002 it is arguable that Uganda’s economy would be very different from what it is now – inflation may not have tripped into double digits for instance. A debate for another day.

Because of Lukyamuzi’s best efforts we are now paying about 15 US cents for our power. Thank you very much! And the Bujagali dam will eventual cost almost thrice the original cost when it comes into full production 17 years after it was first nooted.

Fast forward today and we find ourselves in an almost similar situation with the exploitation of our oil resource.

Last week’s goings on in parliament were high on drama, low on substance and had all the hallmarks of a medieval inquisition.

The accusations leveled on the first day fell flat when the accused responded leaving conscientious Ugandans wondering what this was all about.
What is little reported and causes me to reminisce back to the AES Bujagali episode is the houses resolution to stay all forward movement on the development of the oil fields until appropriate legislation is put in place.

A very honourable request.

However we – both parliament and government need to see the bigger picture when dealing with these kinds of issues.

It’s all very nice if you are a political neophyte to enjoy your 15 minutes of fame after ruffling some big wigs’ feathers, but let us ask ourselves, who is going to pay the costs which will continue to accumulate regardless of whether Tullow sells off or not?

How will the uncertainty about doing business in Uganda affect our attempts to attract credible investors? As it is now Uganda is not a prime investor destination its inadequate infrastructure aside there is a lot of uncertainty regarding our political and bureaucratic process that entrepreneurs are forgoing our mouth watering returns for predictability and lower returns elsewhere.

And how will it affect our own businessmen if they choose to borrow from abroad or link up with foreign partners? Our businessmen who are still steeped in rudimentary practices are being denied the chance to partner with international businessmen and benefit from the transfer of best practice because as explained above the international business would rather not bother with us. We may tow the pseudo-nationalist line that we do not need foreign investors in this country, but see where that attitude has got us since 1972.

I am all for cleaning up the bureaucratic processes in this country – in fact that is one of the biggest costs of doing business in this country. I am not averse to the odd MP grandstanding for his rural constituents. And I will not shed a tear if a minster resigns.

But we need to have a holistic view of things, especially of what makes economies tick, what makes business work and how we can harness this for the benefit of our people.

To paraphrase, the world shall not wait for Uganda to develop.

In their resolution the MPs compelled the government to bring all oil-related legislation to the house in the next few days so they may be passed expeditiously. If need be they should work weekends to iron out the kinks and pass the law.

The political fanfare can wait for another day let’s keep our eye firmly on the ball, the welfare of Ugandans depends on it.

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