The recent discovery of oil in western Uganda has led to debates about the “oil curse” in Africa, with particular reference to the cases of Nigeria, the Sudan and the lesser known Equatorial Guinea. The oil curse could result in similar conditions of corruption, Dutch disease, and conflict seen in other African oil producers. Despite only being in the exploration phase, several people have recently been killed in the Lake Albert region, where the oil is located, including a British oil contractor.

Anticipated oil revenues may provoke conflict with the neighboring DRC as the oil reserves are located along the two country’s shared border; the exact demarcation of which is still in dispute. The two countries had a less than amiable relationship in the past, dating back to Uganda’s invasion of the DRC in 1998. Presently, the Ugandan foreign minister Henry Okello is advocating a joint oil commission between Uganda and the DRC.

There are a few positive signs that Uganda is trying to avoid the mistakes made by other African oil producers. Last week, Ugandan president Yoweri Museveni pledged he would “roast” corrupt government officials. Museveni has vowed that money will not be spent on imported luxuries but will go directly back into developing the country. He has also been meeting with DRC president Joseph Kabila to discuss ways to mitigate nascent hostility between the two countries. Given the current instability in the DRC, it is unlikely that Kabila will be able to focus much attention on this goal. Ugandan energy minister Daudi Migereko is consulting with Norwegian officials to learn about managing oil production, given that Norway is arguably one of the few countries in the world that did not become overly dependent on oil revenues and successfully managed the profits.

John Morley, the country manager of the Tullow oil company, has been positive, overly so I think, about the prospects of oil for economic development in Uganda and the region, which, as we all know, is really the aim of oil companies. In a country where 35% of the population is below the poverty line and approximately 7% of the population have access to regular electricity according to the CIA World Factbook, a wisely managed oil industry could result in significant improvements for ordinary Ugandans.

However, the government has so far resisted calls for the total transparency of projected oil revenues and their distribution, though they have conceded that any contracts signed with oil companies will be published. Avoiding the mistakes of other African oil producers will be difficult. Unfortunately, prior experience points to the fact that the oil industry increases conflict within countries (and in this case, potentially regionally), such as in the Niger Delta, funds insurgencies and paramilitary groups, witness Colombia, and increases the ease of graft and corruption by the government. Given the warm relationship between the Bush administration and the B-movie dictator of oil producing Equatorial Guinea, “President” Teodoro Obiang, it is apparent that the US government is not overly concerned with the state of human rights or government corruption in a country as long as the oil flows. This does not bode well for Uganda.