August 18th, 2011
10:38 AM GMT
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Kampala, Uganda (CNN) Along the Entebbe Road, that bustling, traffic-ridden street that links the airport to Uganda’s capital city Kampala, is a small hairdresser called “Obama Salon.”

The name conjures up an ode, a prayer, a little bit of wishful thinking on behalf of the salon owner, who no doubt wanted some of Barack Obama’s yes-we-can-do-it magic to wear off on this neglected avenue in Africa.

For the beleaguered residents of Kampala, a run-down city that tries hard to create some order out of the chaos of poverty, life remains hard. Food prices and transport prices continue to spiral higher and higher, making residents angry that those with so little have to pay so much for the basics.

It will not be like this for much longer, say the optimists.

That’s because beneath Uganda’s soil, in the northern parts of the country in the Lake Albert region, lies an extraordinary oil bounty.

Uganda is about to come online with Africa’s newest resource bonanza; the country has the potential to become a mid-size producer of oil, on a par with Mexico. The riches are potentially a game-changer. Some hype suggests the country will be awash with $2 billion of cash a year in oil revenues.

Powerful, connected people in Kampala talk about the staggering changes that are about to come to Uganda, how the Ugandans don’t realize the implications of the windfall that sits beneath their land. There is a sense from some that the good times are about to start rolling. But are they?

The continent is littered with examples of how the riches beneath Africa’s soil have done little to uplift its people. One only need look to the Congo or Nigeria, two massive treasure troves of natural resources that have been squandered by greed and bad leadership.

How does Uganda avoid that so-called “oil curse?”

The responsibility lies with President Yoweri Museveni, a man who has been in power since 1986. The decisions he is taking right now will define this East African country, and its neighbors, for the rest of this century.

It’s important to not get bamboozled by the potential for development and upliftment of ordinary Ugandans because, many believe, that is not President Museveni’s first priority.

To ensure his political future, observers suggest, Museveni has to control access to the oil wealth, which is why no “oil minister” or “oil ministry” has been formed yet in Uganda. That sector will, according to people familiar with the situation, stay in the presidency.

Secondly, Museveni has to manage the expectations of Uganda’s powerful kingdoms that believe more power should be given to traditional leaders. There are also tribal pressures about where the majority of the oil wealth should be spent – in the local areas where the oil is being drilled, or in the urban areas, where Museveni’s ruling party is based?

Thirdly, there is already criticism that Museveni has “sold-out” Uganda’s oil wealth to the companies that control the major blocks - Total, the French oil giant, Tullow, the Irish player heavily involved in Africa, and CNOOC, the Chinese monolith.

Human-rights campaigners say the Uganda oil contracts are designed towards a “resource extraction program” aimed at company profit and not country development. They insist that the contracts are structured in favor of these companies and not the Ugandan state. Tullow denies that and says that the Kampala contracts are some of the best in the world.

The other challenges are practical as well as political. There are apparently still negotiations on how to extract Uganda’s oil, how to transport it and where to get it refined.

Some want to build a pipeline - a heated, underground transport line out of Uganda. Others want to expand on already-existing railway tracks to the east. Many want the oil to be refined in Mombassa, Kenya. Some worry it will be refined in China or elsewhere.

Decisions and responsibilities that lie ultimately with Uganda’s ageing president. Is it too late? Or is he ready to make bold decisions that will bring a possibility of hope to the hairdressers in the Obama Salon?

soundoff (35 Responses)
  1. African well wisher

    With the US, EU China, India thirsty for oil, I wonder who shall come first and ruin the nation, if not we should expect to see a puppet leader who shall do nothing for the people ever.

    Considering the US is kinda losing its pals in the middle east I wonder what shall happen to UG now, they shall be destroyed, or there shall be a military base in UG itself, its kind of like a gun being pointed to the leader asking him to kill his own people, destroy its own economic system...

    these days the US seems to be a puppet nation with China as its master, lets see what happens, its really exciting, I wonder how much UG shall change in 15 years starting next year.

    August 18, 2011 at 8:45 pm |
  2. Henry Baisi

    Whatever happens, Uganda will have money in its coffers beyond what it currently has. That will find its way to the people in one way or the other. The people of Uganda will wash poverty off their faces. Credit goes to Museveni for creating a stable political climate which has enabled the country to reach that position in its history when it can start to exploit its natural wealth.

    August 18, 2011 at 10:52 pm |
  3. A foreigner in Uganda

    While I hope that Uganda can break the oil curse, I have to admit that I have serious doubts. While we haven't seen the large uprisings in Uganda that are taking place in North Africa and other parts of the Middle East, the political situation here is far from stable. There is a seemingly constant stream of security warnings regarding police and army crackdowns on protests coming from my embassy, including one just yesterday. Let us also remember that Uganda is probably one of the largest recipients of aid, per capita, in the world. It sits at the bottom of so many rankings related to poverty except GDP per capita, but that can't be saying too much when you consider the fact that over 40% of the nation's GDP is aid. For whatever reason, that aid has not trickled down to uplift the people. I admit that oil money is not the same as gifted aid, but I feel like it's not an encouraging sign.

    August 19, 2011 at 6:00 am |
  4. Jinja resident

    With the rampant corruption and suppression done by Museveni and his family, the profits will be squandered amongst a select few in government and oil executives. The history of misspending and little real development or increase in wealth for average Ugandans speaks for itself. Despite GDP growth, at times, of 6%, wages have changed little and have actually fallen a great deal due to high inflation and currency devaluation stemming from terrible economic policy for Ugandans/great resource extraction policy for multinational corps that provide few skilled jobs for Ugandans. The NRM holds the country in a stranglehold of incompetent government and corruption and must, like Museveni, go now.

    August 19, 2011 at 9:06 am |
  5. Ricky

    The country is poised with a great resource beneath its soils, alot of raw materials can be extracted which will favor import substitution of raw material to reduce the country's outflow of the green buck , new industries like plastic manufacturing will be boosted, and so on but, environmental degredatino lies ahead, examples like that in the gulf of mexico and nigeria should make us first think about protective measures just incase before pocketing the oil revenues. I know greed will out shadow social benefit leading to BLOOD OIL. God help us.

    August 19, 2011 at 11:44 am |
  6. ppipa

    First, Uganda shouldn't avail any opportunity to any of the western multinational countries lay its hands onto the Uganda oil. Let us give China a chance and see how it all goes. Initially, China has exhibited better qualities as far as considering how Africa needs a payback. We should be able to learn from what is going on from the rest of the world. I mean we should learn from Libya and the likes. Western multinational countries and USA are in for total exploitation of African resources and its them that bend the leaders here. And don't forget that the western multinational countries nolonger have money and that is why they are wagging wars back and forth to create ways to of stealing from other nations the way it happened in Iraq, other nations and now Libya. China and Iran can help us drill and refine our oil from here after it's value added. But so far so good.
    Foreigner in uganda is just pessimistic about Uganda and such attitudes are sowed to demean developing nations as if they us to resign from progress. We can't afford to be tied in psychological demeaning games anymore.

    August 21, 2011 at 9:42 am |

    I cannot but only laugh reading the title will "Can Uganda avoid the oil curse" this is a country that has been lead by the same man since I was in primary school. I am 36 the country exist on foriegn aid and corruption is rife in all aspects of the coutry. That country is cursed like any other African country with oil and before people start protesting I am African. Our leaders have have rapped our coffers while the west has given them a place to hide all the money yet send us aid so in answer to your question No Ugandan cannot avoid the CURSE.

    August 21, 2011 at 10:59 pm |
  8. Edward Sevume

    Infrastructure, Infrastructure and once again infrastructure. That means good roads, in town and countryside in order to help with solving the logistical problems connected with transporting agricultural produce round the country(read internal markets), that means building schools for the kids making primary and secondary education affordable – why not HSCE free so a big burden is lifted off the shoulders of the poor who would like to see their kids continue studying, that means establishing political institutions at the grassroots level that are financed with public funds but with the control from the government to ensure political participation for all! That means helping small farmers with small start up capital but with a thorough control so that the money lands into the hands of those who need and not in the hands of the scavengers! That means public investments in long term projects in sectors that can make Uganda be able to participate fully and compete on the International arena! But to begin with, investments in human capital able to play the role China is playing to day as the machine tool of the world. That means first and foremost, technical schools to have to be built to spread the good seeds! That means also ensuring investments in future energy sources as oil is a resource who´s supply is limited(not renewable as such). Further money from the oil should go to improving the supply of hydro electric energy to different parts of the country as this spreads opportunities for industrial production and provides a good standard of living for the whole country as a whole! The list is long on how oil finds could revolutionize the country´s standard of living! I hope the the president fights hard to prove that a resource of this kind can put Uganda on the list among others with full AAA rating! Good luck Mr President!

    August 22, 2011 at 12:24 am |
  9. makerere student

    oil curse or not, museveni's time is up...he should go Honourable
    or his honour might be watered

    August 22, 2011 at 9:36 am |
  10. EZE

    Can you Robyn Curnow,stop refering to my beloved country Nigeria as a failed state.South Africa has as much poverty if not more than Nigeria.You view your country with rose tinted glasses,a country that oppresses and impoverishes the true indigines."Those who live in glass houses shouldn't throw stones".

    August 23, 2011 at 11:16 am |
  11. EZE

    Oil Curse?What a load of rubbish,with all the resources in South Africa, who seems to have benefitted?The Europeans of course, and the true South Africans left in poverty,why not talk of the GOLD CURSE?

    August 23, 2011 at 11:21 am |
  12. Ugandan

    This is article leaves out a lot !
    The analysis is incomplete. Every right thinking Ugandan knows that Uganda's can only begin to dream of a better future when its people and leaders realize that it is wrong for one person to rule a country for almost 30 years ! No country can progress in such circumstances oil curse or no oil curse

    August 23, 2011 at 12:53 pm |
  13. Ben ugandan

    we just need good policies, not an individual. but currently Mr. Museveni is the best candidate for many ugandans who voted for him.

    August 24, 2011 at 9:04 am |
  14. hamza bukenya emran

    wth our govt that we have i think it will be so hard for the poor people to get a share of the oil that we have all that am worried about is the greed that our own president has and some of his close friends,the likes of amama,nasasira,kiyonga and those around the first family,they want a bigger share than no one in our motherland.may be it will be after the m7 regime's downfall that we will be happy that we have oil in our country.

    August 24, 2011 at 12:49 pm |
  15. frank smith

    Of course the curse will continue. There is too much jealousy and depravity in Uganda to avoid it. (Not that Uganda has the corner of the market on these commodities, but it does have some special stockpiles.)
    My only consolation is that the Chinese are involved- American oil companies sold off their exposure to this fiasco long ago, so cannot be blamed. The Chinese overlords will make the Ugandans wish the English were back.

    August 24, 2011 at 1:45 pm |
  16. Joyce Nyakato

    hello, i dont think we would survive this curse. Look at the state of our country. Our economy is doing so badly ad corruption is like our best friend. we will only survive if leadership changes otherwise i see no miracle

    August 25, 2011 at 1:30 pm |
  17. Noah Zaakeka

    The answer is yes and no. Yes, if President Museveni saves the country of the sickening corruption, and No, if the leadership maintains a "Twateera Embundu" (We Fought) attitude and ignores the aspirations of the ordinary citizens.

    August 27, 2011 at 9:42 am |
  18. Cursed Already

    The country is cursed already by the greedy, tribalistic nut ruling it by force. Henry Baisi, you need to get out of the rock or denial you are in and realized that not everyone has a piece of the pie in Uganda. Before you know it all of those from Western Uganda are now going to move to the Northern part, true normads, claim a place and stay.

    August 29, 2011 at 4:40 pm |
  19. Concerned

    I've got a feeling that UG shall exchange oil for infrastructure development and other projects that shall mainly be carried out by China and maybe Japan thus bringing in some sort of development..., in regards to real improvement, well that can only happen if UG starts investing in its own people (like Japan, Singapore, S Korea...)

    1. Providing good quality education can uplift many
    2. Together with easy access to credit many can set up their own businesses thus reducing poverty.
    3. Bringing in a sense of patriotism, all UG made to feel like one rather than being tribalistic

    I can only hope the govt. takes the right steps in bringing in progress, but knowing the president has been in power way too long, he's probably power hungry and might do anything to destroy the nation. Chinese development is good but Ugandans shall need to learn to develop without them otherwise UG shall have good infrastructure but shall still be dependent on China.

    August 29, 2011 at 11:21 pm |
  20. mbona

    take time and read the views expressed in the article above: it is a free download: Offering an insight into Uganda`s Oil resources

    August 31, 2011 at 10:26 pm |
  21. AMOOTI

    Yes,Uganda can avoid the oil course. As a ugandan, I strongly believe that the oil curse can be defenately avoided in Uganda. It's a process and it takes time to avoid the curse.Ofcourse we have corruption in the country and we are fighting it strongly.We have a government that has stayed in power for three decades but that will be history in the next decade and we are very optimistic about it.As many western countries look at Uganda as a poor,corrupt country,ugandans are working hard day and night and there is so much change in Uganda now for instance infrastructure has developed,universal education is in place,good medical care(the medical care may not be the best in the world but atlist there is a system in place) and we can now talk more openly about political issues which never happened before.
    Uganda, is moving forward and is yawning for development and if you have lived in Uganda for more than 20 years you will agree with me but if you are a tourist in uganda for two months you will never know how far we have come as a country.
    Uganda as an independent country has got so many problems,yes we are poorer than USA for example but on the other hand,Ugandans are much more happier than Americans and many european countries.

    If Oil contracts are made open to the general public and terms anc conditions set out clearly on how to maitain the ugandan environment then then the curse will be dealt with.

    September 9, 2011 at 8:19 pm |
  22. jikoy

    It's time for the world to learn, the "secret code" can achieve a 90% accuracy rate within the oil market. What I'm trying to do is wake you up so that you can see that you can make as much money as you want within the oil market by using the "secret code". So here is the proof, shown live with NO POSSIBLE WAY to fake!! Google Oil Trading Academy to learn more.

    September 14, 2011 at 8:30 am |
  23. kasobya alex

    am a ugandan but i can say is that uganda survive the oil curse and its only GOD to save uganda but the future doesnt seem good at all

    September 14, 2011 at 10:30 am |
  24. kasobya alex

    am a ugandana but all i can say is that we cant survive the oil curse unless we get a puppet like besigye who can dance to the tunes of these devils the whites.

    September 14, 2011 at 10:32 am |
  25. Ensigyeto tommy

    If we dn,t change on leadership I think we Ugandans we shall not benefit on oil .

    September 15, 2011 at 6:32 am |
  26. may

    Amooti, my thoughts exactly. Let the contracts be made open – Tullow says they are some of the best in the WORLD!
    Also to avoid if it is the giant Americans or Chinese or Irish, why not work with Mexico, Brazil, Argentina to learn on oil driling, etc? TIME FOR THE ORDINARY UGANDANS.
    Amooti, not sure which roads you are traveling on or hosptials you are going to but they must not be Entebbe road, Kampla road, Masaka rd or Mulago hospital, Nsambya for that matter. Musevini go out with a BANG. Make Uganda ours-Uganda or Ugandan's.

    September 16, 2011 at 1:45 pm |

    Here's a good thought, can African not hide its resources such as oil...?, we all know that the world is still controlled mainly by the West and China, the more we tell them that we have these resources the more they set up a military base in or near our nation, every time our leaders DO NOT bow to western demands these leaders use the base to attack and strangle us, we know this is a modern form of colonization.

    Lets just remain poor and do very little, the best we can do is not show our resources out there. China, Middle East, Russia are all planning the down fall of the US & EU, once that is done, we can start using our resources for our own benefit and that way we can easily become the best continent ever.

    Let us learn a lot from Rwanda, despite what the nation went through they are trying their best in fixing themselves, they are focused on development and economic progress, now this nation is one we can all look up to despite all its flaws.

    September 18, 2011 at 5:44 pm |
  28. jorgez

    It's time for the world to learn, the "secret code" can achieve a 90% accuracy rate within the oil market. What I'm trying to do is wake you up so that you can see that you can make as much money as you want within the oil market by using the "secret code". So here is the proof, shown live with NO POSSIBLE WAY to fake!! Google Oil Trading Academy to learn more.

    September 19, 2011 at 2:00 am |
  29. Josef Stalin

    Oil Curse is a real possibility, judging by the events in our country, the corruption, the impunity, the selfishness of political leaders,the selective prosecution, the hiding of the oil sharing agreements, unemployment, etc......we' re almost finished!!!

    Countries normally suffer because of some very few heartless, selfish and vision-less individuals.....

    October 4, 2011 at 8:40 am |
  30. Just interested Zimbabwean

    My brothers and sisters,I mean Africans,we can give all contracts to Chinese,Russia or whatever the country u can think of, avoiding westerns but that changes nothing if political structures doesn't benefit the mass!China is simple representing a neW master if you want to put it in that way, but in the long run I think we will see no difference with the west or the US or Eu wld be comparable better by the time we wl realise the fault of thz new "masters".Museveni shld put pple at heart and deal accordingly for the of benefit Ugandan mass.

    January 18, 2012 at 12:53 pm |
  31. Just interested Zimbabwean

    My brothers and sisters,I mean Africans,we can give all contracts to Chinese,Russia or whatever the country u can think of, avoiding westerns but that changes nothing if political structures doesn't benefit the mass!China is simple representing a neW master if you want to put it in that way, but in the long run I think we will see no difference with the west or the US or Eu wld be comparable better by the time we wl realise the fault of thz new "masters".Museveni shld put pple at heart and deal accordingly for the benefit Ugandan mass.

    January 18, 2012 at 12:56 pm |
  32. Shiferaw Berkineh

    i think oil is not a curse .we are borne with a curse.we must pray. There is alot of Devils in Africa than any other continent, Ethiopia,AA

    January 27, 2012 at 8:46 am |
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