IS THERE PETROLEUM IN SEMLIKI VALLEY, UGANDA?

Who says Presidents do not soliloquize? Dr. A. M. Obote was very good at it. When agonizing over the bad state of Uganda economy, he was often overheard saying, 'it is bad enough for a person to be poor, but for a country to be poor is a terrible thing!' He would then, almost instinctively ask any person nearest to him about 'this rumor about the smell of paraffin on Lake Albert, is this true? Could this indicate the presence of Petroleum deposit? If there is Petroleum nearby in Southern Sudan, why can't Uganda have a bit of it also? After all the bedrock holding the Sudan oil must be tilting towards the western leg of the Rift Valley where Lake Albert is the lowest point. Is it possible to drill a deep hole, say in Attiak there, so that the Sudan oil could flow to Uganda?'

The reality dawned in the weirdest way. In the years 1982/84 the world financial system trembled on the brink of the abyss; debtor countries groaned under the yoke of their debt-service obligations. Under a brutal and bloody dictatorship of Idi Amin the Uganda economy had completely collapsed. This was exactly the time when the second UPC government had taken over and had drawn a 2-to-5-year economic Recovery Program for Uganda. One of the most difficult items on the program was the shortage and balancing of the fuel bills. Uganda was counting the shilling and cent over its tottering Recovery Program when capital flight entered the space age, and financial centers, flight-by-night havens and long-established capitals alike, were shaken to their foundations. Who came up smiling to Uganda? Mr. Tiny Rowland, Chairman of the London based London Rhodesia Company (LONRHO), a mining and agricultural conglomerate in Africa. He became a frequent visitor to Uganda, and always demanded to see the President/Minister of Finance at very short notices. He demanded the following four important things.

1. The right of monopoly to buy all Uganda Coffee and sell it to the world market.

2. The right to extend the oil pipeline from Nairobi to Kampala.

3. A free franchise over the exploration and exploitation of all Uganda's mineral resources.

4. To build and operate a stock exchange and a casino in Kampala.

In return Tiny promised to help Uganda borrow easy loans for its recovery program and debt-service repayment. It is apparent what this man, Tiny, wanted. Reading 2 and 3 above together. It was clear that there was something that this man knew about petroleum in Uganda that the government did not know and could only speculate. Tiny's proposed pipeline was too big for Uganda's fuel needs for 100 years. It could have been that Tiny had set his eyes on an advance pipeline that would carry petroleum from Northwestern Uganda to Mombasa. The open franchise for exploration and exploitation would have meant that it would be LONRHO to give out rights and licenses to oil explorers, and not Uganda government. Stock exchanges and casinos are safe havens for capital flights and money laundering.

If you knew patriotic Obote, you could guess his answer to Tiny. The answer was a definitive 'No!' to all four demands. Tiny walked out angrily. Obote mused 'how can I, an individual, tie the destiny of a whole country and millions of Ugandans in perpetuity without their consent.'

Tiny Rowland flew straight to Nairobi, and from there ordered LONRHO facilities in Africa and London to be put to the use of NRM and Museveni. LONRHO underwrote all NRM bills and debts in Nairobi and Tiny's own Executive Jet was put at the disposal of Museveni. Museveni was now airborne to fly anywhere including Kasese where he soon established his tactical bridgehead for his subsequent advance on Kampala in 1985.

Nationalism and patriotism have always cost UPC its governments. That Semliki oil has already cost UPC a government and may cost Uganda its freedom and sovereignty permanently. Oil and other mineral resources always come with a price, sometimes a terrible price. As one time Tiny was flying over Africa, looking down, he boasted to his executives that there was not a single head of state, down there, that he could not bribe. But in his heart of hearts, as he flew over Uganda, he must have remembered that there was one he could not bribe, and that is the unassailable Obote.

What should already be worrying us now are some of the obvious indicative signs. Foreign interests for several consecutive years have been supporting the Uganda annual budget by over 51%, Uganda's debts have risen from US $1.2 billion in 1985 to a hefty US $7.2 billion to end 2003, large military equipment including gun ships and missiles have been purchased outside the defense budget, Ugandans have been kept in the dark about the cost of the Congo DR wars, and the huge President's Office Expenditures have never been audited. Who is underwriting these costs?

Has that Semliki petroleum been mortgaged already? Is the seeming desperation and callousness, in the recent past, with which President Museveni has sacked his hitherto dependable advisors an indication of an external and foreign insistence that Museveni must remain in State House beyond 2006 to oversee the oil and repay all their debts? How far will these foreigners interfere in Uganda politics and help Museveni to consolidate and entrench his position into the coming years?

How do we confront this new situation which is unfolding? How do we hope to stop Museveni who is fast shedding off what he considers are encumbrances, such as the cabinet, parliament, and the justice?

We must not be unduly excited by the find of petroleum in Uganda. If it is true that there is oil in Semliki, we shall soon see the proliferation of peek-a-boo financial centers, ghost companies, haunted foreign banks, casinos, stock exchanges and other financial activities in one guise or another, in Kampala or even Fort Portal and Masindi. Petroleum finds in a country with a corrupt government in power and unpatriotic and greedy businessmen on the corridors of power is dangerous poison. This poison will kill the whole country. I learnt my lessons from ex-President Jose Lopez Portilo, when he lamented in tears, before the UN General Assembly on 1st October 1982, and described his country, Mexico, as, 'a living example of what occurs when that enormous, volatile, and speculative mass of capital goes all over the world in search of high interest rates, tax havens, and supposed political and exchange stability. It decapitalizes entire countries and leaves havoc in its wake.'

In 1982, when Mexico put its economy into a tailspin to try and stop capital flight, it was both the world's fourth largest oil exporter and its second most heavily indebted developing country.

A slightly edited version of the original article previously published in Ugnet on May 5^th, 2003.