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Will Uganda avoid, or succumb to, the oil curse?

Flickr, Stefan Gara

Nigeria is not a poor country, yet it is full of a lot of very poor people.

Nigeria has lots of oil, and oil money, but little of this money ever makes it to regular Nigerians. As this entry in Wikipedia about Nigeria’s economy says:

Economists refer to the coexistence of vast wealth in natural resources and extreme personal poverty in developing countries like Nigeria as the “resource curse”…. the World Bank has estimated that as a result of corruption 80 percent of energy revenues benefit only 1 percent of the population.

It’s not just homegrown corruption around oil that causes problems, as evidenced by this (little-known, at least in the U.S.) episode involving former Vice President Dick Cheney.

Now, it appears that Uganda is becoming a major oil-producing nation. This could be a good thing, or not so good.

Todd Moss at the Center for Global Development asks Could Uganda be the Next Niger Delta? What Moss is really asking by comparing Uganda to the southern oil-rich part of Nigeria is if Uganda will also see massive corruption, human-rights abuses, murder, terrorism and institutionalized kleptocracy.

A wall of new oil money—coupled with new projections that Uganda’s oil reserves might actually be double previous estimates— could very well accelerate the country’s disappointing decline in governance. Oil revenues that could in theory build up the sorely needed infrastructure and social services could instead end up fueling conflict, wasted on white elephant projects, or used to further consolidate President Museveni’s grip on power.

The potential damage of the “oil curse” is not limited to aspects of money and power. As The Guardian’s John Vidal writes today, in Shell oil spills in the Niger Delta, the reaping of oil profits at the expense of the local community has had broad environmental impacts that adversely affect all Nigerians living there:

The Niger delta is one of the most polluted regions in the world, with more oil spilled across the region each year than spilt in the Gulf of Mexico in 2010. According to Nigerian government figures, there were more than 7,000 spills between 1970 and 2000, and there are 2,000 official major spillage sites, many going back decades, with thousands of smaller spills still waiting to be cleared up.

Uganda has rich farmland, and has long been regarded as a potential major breadbasket for Africa. Will oil support its overall economic development or just lead to another curse?

Here is a documentary about the many issues surrounding Nigeria’s oil production, Sweet Crude, done a while ago by Seattle film-makers (who got arrested while filming it).

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About Author

Tom Paulson

Tom Paulson is founder and lead journalist at Humanosphere. Prior to operating this online news site, he reported on science,  medicine, health policy, aid and development for the Seattle Post-Intelligencer. Contact him at tom[at]humanosphere.org or follow him on Twitter @tompaulson.