UGANDA’S plan to handle petroleum revenues is ‘sensible’ and promotes transparency and accountability, the International Monetary Fund (IMF), has said, sending a gesture of confidence.
Current oil and gas exploration finds have indicated that the East Africa’s third largest economy posses over 2.5 billion barrels in place, enough to produce at least 100,000 barrels of oil per day for 20 years.
The expected revenue windfall -about $2b per year –will be deposited in a separate petroleum fund subjected to strict accountability yet transparent rules and regulations.
“We are pleased that government is sending the right signals about the way it intends to handle oil management,” Thomas Richardson, the IMF Uganda senior representative, said.
“Because you want to insulate spending outside the budget from the volatile oil prices, the idea is to set aside whatever can’t be spent efficiently in the short run into a fund that will be available for spending in the future.”
Uganda expects this week to get $785m in capital gain tax accruing from the China’s National Off-shore Oil Corporation (CNOOC), France’s Total and United Kingdom’s Tullow Oil $2.9b deal.
This is on top of $121m already deposited on Bank of Uganda’s account by Heritage Oil after disposing its interests.
“The Bank of Uganda will manage more less a keen the way (it) manages the international foreign reserves now which means (the fund is) subject to very clear rules of accountability and transparency,” Richardson observed.