Three New Policies for Oil Monies Drafted in Uganda

The government of Uganda has concluded drafting 3 new pieces of legislation that will inform how money from the Petroleum Fund in the BoU will be spent.

These policies are expected to follow the guidelines that had been set out by the Public Finance Management Act in 2015.

"To facilitate investment under the Petroleum Revenue Investment Reserve in line with PFMA 2015, the ministry has finalized the draft Petroleum Revenue Investment Policy, the operational Management Agreement and Terms of reference of the Investment Advisory Committee," a recent report on the semi-annual inflows, outflows and assets of the Petroleum Fund, says.

The Fund was originally created under the Public Finance Management Act of 2015 and it requires all petroleum revenues which the Government accrue, to be paid into the Petroleum Fund.

The Fund was worth Shs 288.7 billion in December 2018, down from Shs 470.4 billion reported six months earlier. The government have put the drop down to the transfer of funds to the Consolidated Fund to finance the 2018/19 national budget.

The PFMA allows for a transfer to the Consolidated Fund, but it does not support the idea of using the Petroleum Fund to finance the budget without specifically mentioning the area of investment. The PFMA 2015 largely specified that the money from the fund would be spent on mainly infrastructure.