Poverty in the midst of plenty

Gilbert Boyefio For about a decade now, there has been frequent reports of substantial new oil and gas findings in most parts of Africa, with East and West Africa being the most beneficiaries. Africa undoubtedly is endowed with vast quantities of both fossil and renewable energy resources. According to a World Bank report on African oil and gas, “in the past 20 years, oil reserves in Africa grew by over 25 percent, while gas grew by over 100 percent. Africa’s rich oil fields and the prospects for more discoveries have transformed it into an important player and a key “target” in global oil production and resource extraction”. However, despite the abundance in natural resources and wealth most parts of the continent remains poor and under developed due to corruption, conflicts and mismanagement. Nevertheless, proper stewardship of extractive industries and the revenues they generate has tremendous potential to lift people out of poverty and contribute to sustainable development. “African citizens would be wealthy, if they enjoyed a per-capita share of the natural resource wealth being plundered from their continent. Instead, a corrupt few in government and corporations grab the entire value for themselves, leaving people to die,” stated in a report by the Inter Press Service News Agency. The good news is that new entrants in the industry like Ghana and Uganda are poised to change the old trend by putting in place the right regulations and legal framework, enforce transparency and accountability. In Uganda for instance, the policy goal of the Ministry of Energy and Mineral Development is “to use the country’s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society.” Consequently, the Ugandan Government has table before parliament two bills, namely the Petroleum (Refining, Gas Processing and Conversion, Transportation and Storage) Bill, 2012 and the Petroleum (Exploration, Development and Production) bill, 2012. In Ghana, although oil production started in December 2010 without a national policy on oil and gas development, government has made quick amends to champion the passage of two important Acts, Petroleum Revenue Management Act and the Petroleum Commission Act. These are aimed to introduce a strong and clear legal framework for managing petroleum revenues and independent regulation of the petroleum industry respectively. In addition, government is developing the Petroleum (Exploration and Production) Bill and the Local Content Bill to be laid before Parliament. While Ghana has signed on to the Extractive Industries Transparency Initiative Uganda is yet to do so. The EITI was launched in 2003 to promote, support and improved governance and transparency in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas, and mining. The structure comprises resource-rich developing countries, donors, international and national resource companies, and civil society. As of July 2009, 30 countries are implementing EITI, 20 of which are in Africa. Eight African countries have produced EITI reports. These countries hope to spend the millions of dollars to be accrued annually from the oil and gas production to address the health and social issues of their people. Social transformation Until the discovery and exploration of oil by Tullow Uganda and its partners, the people of Buliisa, a remote rural community in Western Uganda, made up of mainly pastoralists or subsistence agriculturalists were not used to paid employment. Buliisa is about 300km from the Capital City and is located within the rift valley, close to major wildlife reserve. The town with a disperse population of about 80,000 people lack high skilled manpower due to the high level of illiteracy. Many of the people live below the poverty line. “Tullow Oil has introduced money into the community and this has impacted on the standard of living of the people,” disclosed Fred Lukumu, Buliisa District Chairman. The way of life of the people has now changed to embrace a new dependency on money. Similarly, thousands of kilometers away, a rural community in the western region of Ghana, Bonyere, with a less population but many similar occupations to Buliisa, until the Jubilee Field oil production is not used to company work. Bonyere is also about 350km from the Capital City, Accra, but has all the social amenities a town could ask for including a school, clinic, electricity and a pipe borne water. Bonyere is currently the location for the gas project and also the Domuli Thermal Power Project by the VRA. According to the site engineer, Hassan, “so far 10 indigenes have been employed directly in the clearing of the land for the Domuli Thermal Power Project, which commences operation after a short break for compensation issues to be sorted out.” He said they hope to employ more indigenes as the project progresses. The people of Bonyere have high hopes for the oil and gas industry. For James Blay, a 30 year old Carpenter with two children, the opportunities presented by the oil and gas industry goes beyond direct job creation. He believes the sector will boost his business. According to him, “when people get money they would be able to use my service more”. Blay, a carpenter for nine years earns around GH1,000.00 during the peak fishing season in August because according to him “the people have more money to construct or rehabilitate their buildings and acquire new furniture”. Accommodation is cheap in Bonyere with rent ranging between GH3.00 to GH10.00 a month. But the people are not perturbed that rents are likely to go up when outsiders start trooping into the community as a result of the oil and gas work. Back in Uganda, Mr. Lukumu indicated that with the onset of oil exploration in the region most of the people of the district now have more money to send their children to school, change the roofing of their building from thatch to corrugated sheet, enter into trade or expand their farms. Tullow Uganda is currently constructing six infrastructure projects supporting the areas of Health and Education in both Hoima and Bullisa Districts. The total cost for these Corporate Social Responsibility projects is approximately $5million. According to Mr. Lukumu, Buliisa was upgraded from a county status to a district due to the discovery of oil on their land to allow them equal say and representation in the country’s administration and legislature. He noted that the community hopes to see rehabilitation of their very bad road network and also get connected to the national electricity grid. “Buliisa District has two ground water based pumped piped water supply systems serving approximately 20 % of the population having access to safe water while 80 % of the served population uses point water sources. However there is fear that further development of the oil industry will cause in an increase in the water demand in the district,” stated a Ugandan Government website. For 20-year old Elisa Faizo, the presence of Tullow is a blessing in disguise. Faizo was a small shop operator before being employed as a Mason at the Buliisa Health Centre Project site, which is funded by Tullow Uganda. He said, “I now earn USH10,000 per a day, which was more than I could get running the shop.” This opinion was shared by Robert Oting, Francis Agaruva and Steven Ancho all employees of Excel Construction Limited, one of the sub contractors working at the Ngege 5 exploration area. Robert is 24 years old mechanic at Paida, Francis Agaruva, 22, was a farmer at Kakoora and Steven Ancho, 25-year-old, was a driver at Nebbi. Their duties at the site include filling the pot holes at the site, taking out rubbish, and flushing water out of the drainage system into the pit to ensure that the drain is always clean. The three earn a daily wage of USH5,000 to USH7,000. They have been working at the site for three months now. They expressed joy at the discovery of oil on their land and described it as a good omen. An assertion Tullow Uganda shares with them. Tullow Uganda says they are committed to operating as a responsible company and contributing to social economic development in the communities in which they operate. “The company works directly with the communities adjacent to our operations, addressing their most pressing needs to improve quality of life as well as enabling longer term social empowerment,” remarked Cathy Adengo, Communications Manager, Tullow Uganda.