Economic Diversification and Growth

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Chapter 5 i. Highly skilled technical personnel is needed to help Finance design and use effective oil revenue spending and saving mechanisms. Each year, two public sector agents are sent abroad to study oil and gas management issues. This is not sufficient to remedy the lack of specialized MFPED staff in that area. ii. The Ministry of Justice needs skillful and experienced negotiators to negotiate the best possible deals with international oil companies and maximize the share of oil revenue accruing to the government. It should use experienced consultants, while developing local capacity through staff training abroad and in the country. iii. PEPD has developed its knowledge of the oil sector during the preliminary development phase and URA has already created its own Natural Resource Management unit. However URA will need additional technical staff specialized in reporting, auditing and taxation of the oil and gas sector. iv. An OAG audit of NEMA has shown that the institution should review its guidelines taking into account the special characteristics of complex oil-related environmental issues. v. OAG itself is concerned with its lack of technical knowledge for the auditing of oil and gas institutions. 5.8. In other words, for most of these institutions, an appropriate combination of outside expertise and staff training – locally and abroad – is necessary to develop local capacity. Part of Kampala Road , the main street in the Kampala city 5.9. Two institutions, envisaged in the NOGP, have not been created. 88 Uganda Country Economic Memorandum: Economic Diversification and Growth in the Era of Oil and Volatility
Figure 5.1: Natural Capital and Corruption Corruption perceptions index 2013 Uganda Natural capital as % of tangible capital 2005 Figure 5.2: Corruption and Income Log GNI per capita 2012 (USD, ppp) oil management institutions before production begins. For instance, the absence of a National Oil Company could obscure the division of labor between the Ministry of Energy and the Ministry of Finance and could strengthen the influence of other institutions. Such problems would be difficult to correct at a later stage in an environment which could be dominated by rent-seeking behavior. ii. Close coordination between MFPED, Ministry of Energy, URA, the Bank of Uganda and other institutions is vital for effective management of oil revenue. The development of a comprehensive capacity-building program also is of high priority. Source: Authors’ computations based on World Bank, World Development Indicators, updates of World Bank data (2006) and data from Transparency International. Note: Each country is represented by a bubble the size of which is proportional to the country’s population in 2012. Consequently China and India are easy to identify in the Figure.1. - “Natural Capital” goes beyond “Natural Resources”. This explains Uganda’s very high share of natural capital as per the 2005 Figures which do not include oil (i.e. natural capital represents 84 percent of tangible capital). iii. Finally, transparency is critical. The Ministry of Finance and other public sector institutions should share information on the size and use of oil revenue with civil society organizations and the public at large. II. Improved Governance, Public Finance Management, Public Investment Performance, and Management of Expectations i. The role of the Petroleum Authority will be to monitor and regulate petroleum exploration, development and production. ii. The National Oil Company (NOC) will deal with the commercial aspects of the oil industry. Its creation is underway. The existence of NOC is critical to shield the state from direct liability. 5.10. Table 5.1 summarizes the oil and gas sector institutional structure, describes the functions of each institution and indicates in which areas reinforcement is needed. i. Despite progress made, the present institutional set-up is incomplete. The lack of clarity with respect to the respective roles of the Petroleum Authority, the Ministry of Energy, the National Oil Company and other institutions involved in oil management may affect the sound development of a promising oil sector. It is essential not only to clarify the responsibilities of each entity but also to accelerate the establishment of appropriate A. Governance, corruption and accountability 5.11. Uganda’s public sector management practices are broadly similar to what is found in most of the other countries in Sub-Saharan Africa. According to the latest World Governance Indicators data base, Uganda’s scores are above the SSA average (see Table 5.2) but the country’s record is poor on fighting corruption and patronage. 89
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Report No: 97146-UG Economic Divers
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Contents Contents List of Acronyms.
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Contents Figures Figure 1: Export D
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Contents Tables Table 1: Summary of
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List of Acronyms ACD AFCE AFMUG AFR
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Contents Preface For about ten year
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Contents Acknowledgments The World
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Acknowledgements Credits Regional V
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Exuecutive Executive Summary Figure
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Uganda’s Executive Economy Summar
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Executive Summary longer term as it
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Executive Summary Contractors handl
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Executive Summary was mentioned bef
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Executive Summary 48. Excessive bor
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Executive Summary be met by 2020, w
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Executive Summary Value addition to
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Executive Summary going through the
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Executive Summary Table 1: Summary
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Part I An Economic Development and
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Chapter One 1 Key Messages and Conc
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Chapter One 1 Table 1.1: Poverty Tr
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Chapter 1 is viewed as a promising
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Chapter One 1 also claim 15-17 perc
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Chapter 1 Table 1.6: Savings-Invest
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Chapter 1 significantly by other se
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Chapter 1 Box 1.2: Country Experien
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Chapter 1 Table 1.8: Diversific tio
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Chapter 1 Box 1.3: Product Complexi
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Chapter 1 Box 1.4: A Short-term Exp
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Chapter 1 Figure 1.20: Uganda’s P
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Chapter 2 Development of Oil and Ot
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Box 2.1: Three exploration areas in
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the oil price will recover in the m
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Figure 2.7: Uganda’s Real GDP Gro
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Much of Uganda’s oil deposits are
Page 75 and 76: 2.18. The overall impact of the eme
Page 77 and 78: IV. The Macroeconomic, and Fiscal I
Page 79 and 80: Containers loaded with crude oil re
Page 81 and 82: and other financial institutions to
Page 83: poor performance of state-owned ent
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Page 88 and 89: Chapter 3 Key Messages and Conclusi
Page 90 and 91: Chapter 3 can have a negative impac
Page 92 and 93: Chapter 3 Box 3.2: Financing of Oil
Page 94 and 95: Chapter 3 are required to notify su
Page 96 and 97: Chapter 3 Table 3.1: Mapping of Con
Page 98 and 99: Chapter 3 Figure 3.2: Horizontal Di
Page 100 and 101: Chapter 3 Table 3.2: Addressing Hor
Page 103 and 104: Chapter 4 Strategic Implications of
Page 105 and 106: Figure 4.1: Average Adjusted Saving
Page 107 and 108: Box 4.2: Angola Case Study When fou
Page 109 and 110: time, raising investment spending t
Page 111 and 112: Figure 4.3: Uganda’s Infrastructu
Page 113 and 114: Figure 4.7: Cumulative Spending on
Page 115 and 116: Figure 4.11: Overall Fiscal Deficit
Page 117 and 118: The efficiency of methods of tax co
Page 119: nue will need to be accompanied by
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Page 124 and 125: Chapter 5 Key Messages and Conclusi
Page 128 and 129: Chapter 5 Table 5.1: Summary Instit
Page 130 and 131: Chapter 5 Table 5.2: Governance Ind
Page 132 and 133: Chapter 5 PFM also creates addition
Page 134 and 135: Chapter 5 not published, creating a
Page 137 and 138: Chapter 6 Implementation of the Str
Page 139 and 140: consistent with local needs and org
Page 141 and 142: earth moving equipment and bitumen.
Page 143 and 144: Steel wire Seamless iron tubes M
Page 145 and 146: 6.31. The government and Total are
Page 147 and 148: 6.36. Several policy interventions-
Page 149 and 150: Chapter 7 Implementation of the Str
Page 151 and 152: Figure 7.2: Share of Intra-EAC Expo
Page 153 and 154: Table 7.1: Decomposition of Uganda
Page 155 and 156: Figure 7.8: Transit Traffic t ough
Page 157 and 158: sures aimed at reducing the time an
Page 159 and 160: to the Port of Lamu in Kenya. 4 The
Page 161 and 162: Table 7.7: Labor Migration Policies
Page 163 and 164: References: 1. Acemoglu, D., S. Joh
Page 165 and 166: September 2010, 28 (5), 553-571. Wa
Page 167 and 168: Annexes: Annex 1: Non-hydrocarbon G
Page 169 and 170: (3) • Consumption basket: composi
Page 171 and 172: (12) • International commodity pr
Page 173 and 174: Annex 3: Key Features of the Uganda
Page 175 and 176: Rural Activities: Exportable and Se
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Level of Prices • General Level:
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Total Expenditures: • Primary: NG
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Annex 4: Key Features of the Uganda
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Recursive dynamics o Following prev
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o where: is total consumption in ad
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Human Capital Formation • Schooli
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• Assuming again full depreciatio
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• Thus, an increase in the saving
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Annex 6: Econometric Results of Fir
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Table A6.3: Probit Estimates of Exp
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Economic Diversification and Growth

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