Former Finance Minister Ezra Suruma has criticized the Public Finance Bill that seeks to manage revenue from the recently discovered oil in the country saying it is a recipe for corruption.
Dr Suruma, who is also the senior Presidential Advisor on Finance and Planning, says that the Bill in its present state has many gaps that could be exploited to steal public money. He explained that the Bill gives too much power to the minster that could easily be abused.
Suruma, who mentions that he was speaking from experience, cited section 59 (2) (c) of the bill, which says that monies of the Petroleum Revenue Investment Reserve shall be invested in among others, any other qualifying interest that the minister prescribes. He explained that such an open provision also puts the minister at a risk of being targeted by potential investors with an eye on the oil money.
He also faulted the provision in section 60 (6) (b) that seeks to authorize Bank of Uganda to invest Petroleum Revenue Investment Reserve in a derivative, a type of investment attributed to financial crisis reported in many parts of the world lately. Suruma, formerly, a deputy Governor at Bank of Uganda, says that such a type of business was purely speculative adding that it was not appropriate to commit monies for the nation to such speculative ventures.
On section 71 that provides for sharing of royalties, Suruma criticized the Bill for failing to specify who in the district would pay out the royalty to bodies such as the cultural or traditional institutions. The section says that while government will retain 93 percent of revenue arising from oil production, the remaining seven percent would be shared by the districts that could in turn choose to share with the traditional institutions.
The former minister however said he was happy with the provision contained in section 56 on reporting and accountability that requires Accountant General to maintain proper books of accounts and records of the oil revenue and submit regular financial statements to the minister, secretary to the treasury and the Auditor General.
He also said the decision to include the provision for managing oil revenue as part of the overall Public Finance Bill was a practical attempt to avoid having difficulties, which a separate law on oil revenue management would have presented. Many people have been campaigning to have the Chapter on Petroleum revenue management removed from the Public Finance Bill and enacted separately.
The Bill is the third legislation prepared to govern oil production in the country. Other are the Petroleum (Refining, Gas Processing and Conversion, Transportation and Storage) Bill that was passed last month, and the Petroleum (Exploration, Development and Production) Bill which was passed in December after months of heated debate. Both await the president’s assent before becoming laws.