Oil and Governance in Uganda

Abstract

Many critical governance issues were created with the discovery of major oil deposits in Uganda. Because developing countries like Uganda lack strong institutional foundations, it is widely assumed that riches flowing from oil will result in huge sums of money being diverted to politicians while the country ends up worse off in the long run. Uganda certainly faces this “natural resource curse,” but the potential for corruption is only one of many governance issues arising from the potential of oil riches. The government needs to work effectively with foreign oil companies and neighboring countries to recover and transport the oil. It must also establish institutions and procedures to manage its new oil economy. Moreover, questions must be answered regarding ownership the oil producing lands and how the fragile environment of the country can be protected.