The Extractive Industries and Society xxx (xxxx) xxx–xxx

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The Extractive Industries and Society

journal homepage: www.elsevier.com/locate/exis

The oil discovery in Uganda’s Albertine region: Local expectations,

involvement, and impacts
Joseph Mawejje
The World Bank, Uganda Country Office, Rwenzori House, 1 Lumumba Avenue, P.O BOX 4463, Kampala, Uganda

A R T I C LE I N FO A B S T R A C T

Keywords: This paper examines the opportunities created by the recent oil discovery in Uganda's Albertine region for local
Oil discovery economic development. This is achieved through an assessment of local expectations, involvement, and impacts
Albertine region of on-going activities following the discovery of oil. The local communities have formed strong positive ex-
Uganda pectations including improved access to healthcare, education, electricity, safe drinking water, transport in-
Expectations
frastructure, cleaner and less costly energy, and employment prospects. Moreover, communities expect to benefit
Involvement
Impacts
from auxiliary business opportunities. The negative expectations include concerns about the arrival of im-
migrants, contestations over land, inequality, environmental pollution, interference with livestock grazing areas,
and loss of livelihoods. Despite the negative expectations expressed, the local communities within the Albertine
region approve of the ongoing activities with regard to the development of the oil sector. We argue that greater
stakeholder involvement will help to alleviate the fears shaping the negative expectations and create conditions
necessary to avoid the resource curse.

1. Introduction showing that natural resource abundance, as opposed to dependence,

Discussions about the potential role of extractive industries in
shaping development outcomes have more often been limited to the
examination of the growth and macroeconomic impacts. The dominant
narrative has been that natural resources destroy the competitiveness of
countries through the Dutch disease and political resource curse. The
Dutch disease explains the loss of competitiveness in the non-resource
sectors through the appreciation of the exchange rate (Corden, 1984;
van der Ploeg and Venables, 2013). Similarly, the resource curse lit-
erature has shown that natural resources may lead to a deterioration of
institutions and political governance structures leading to gross mis-
allocation of resources (Ross, 2015; Mehlum et al., 2006). These two
phenomena have been shown to affect long run growth and develop-
ment (Badeeb et al., 2017; van der Ploeg, 2011).
In parallel, there is an emerging strand of the literature showing that
extractive industries need not be destructive to growth and develop-
ment, suggesting a resource blessing hypothesis. Alexeev and Conrad
(2009) attribute the earlier conclusions within the resource curse nar-
rative to misinterpretation of statistical data, due to failure to account
for reverse causality and endogeneity. Consequently, the resource
blessing hypothesis has been explored by, among others,
Brunnschweiler and Bulte (2009), Brunnschweiler (2008), and
Brunnschweiler and Bulte (2008), who have pioneered research
can be associated with growth, institutional quality, and income.
With regard to the local communities within which natural resource
discoveries occur, both positive and negative impacts have been
documented (see for example Aragón et al., 2015). Within this realm,
both “resource curse” and “resource blessing” narratives shape the ex-
pectations of households in localities where natural resources are dis-
covered (Tumusiime et al., 2016). Such expectations may determine the
level of involvement and the kind of impacts from the development of
natural resource sectors. In Ghana, for example, unmet expectations led
to malcontent, grievances, and conflict within the coastal oil producing
communities (Ackah-Baidoo, 2013). Such unfavourable community
attitudes conform to the “Not In My Back Yard” narrative where the
local communities protest against proposed developments or land use
changes in their localities (Schively, 2007).
Since the discovery of commercially viable oil deposits in Uganda's
Albertine region in 2006, numerous studies have examined how these
resources can benefit both the host communities and the country at
large (see for example Mawejje and Bategeka, 2013). Similarly, other
studies have examined the management of expectations (Kiiza et al.,
2011), community perceptions (Tumusiime et al., 2016; Bybee and
Johannes, 2014), impacts (Ogwang et al., 2018), the political settle-
ment (Hickey and Izama, 2016; Vokes, 2012; Patey, 2015), and gov-
ernance dynamics (van Alstine et al., 2014), including biopolitical

E-mail address: jmawejje@gmail.com.

https://doi.org/10.1016/j.exis.2018.09.007
Received 12 May 2018; Received in revised form 20 September 2018; Accepted 20 September 2018
2214-790X/ © 2018 Published by Elsevier Ltd.

Please cite this article as: Mawejje, J., The Extractive Industries and Society, https://doi.org/10.1016/j.exis.2018.09.007
J. Mawejje The Extractive Industries and Society xxx (xxxx) xxx–xxx

Table 1
Households characteristics in the survey districts.
Source: Computations from natural resource management survey data, 2014.
Type of district All surveyed households

Intervention Other-intervention Control

Female headed household 23.5 26.2 23.2 23.9

Male headed household 76.5 73.8 76.8 76.1
Household head has moved at least 6 months since 2008 16.4 13.5 18.6 16.4
Household is located in an urban area 12.1 12.4 14.2 12.7
Average age of the household head (years) 42.0 42.1 42.7 42.2
Average number of years of completed schooling 5.3 5.6 5.6 5.5
Ethnicity
Banyoro 36.0 12.0 1.2 23.0
Acholi 20.8 0.0 17.7 16.1
Alur 17.4 23.6 0.6 14.5
Banyankole 1.6 1.1 25.3 7.2
Bakiga 6.4 1.5 15.1 7.6
Batoro 0.1 25.1 3.8 5.8
Bagungu 8.1 1.8 0.0 5.0
Other ethnic groups 9.5 34.9 36.3 20.8
Household head employment
Agricultural self employment 73.1 72.4 67.0 71.5
Non-Agricultural self employment 12.9 14.2 15.7 13.8
Paid Employee 8.0 9.8 8.1 8.4
Other 6.1 3.6 9.3 6.4
Land tenure of the household
Customary/communal 58.9 47.2 32.7 50.1
Free-hold 31.8 41.6 48.1 37.7
Mailo land 4.2 6.5 13.8 7.0
Leasehold 2.8 4.8 5.4 3.8
Do not know 2.2 0.0 0.0 1.3
Number of households 817 275 345 1437

governmentality (Holterman, 2014). Based on the findings, policy relevant recommendations are drawn
This study builds on such studies to examine the perceived local to provide direction on how the oil sector can be systematically har-
expectations, involvement, and impacts of the development of natural nessed for sustainable development. In particular, community devel-
extractive industries in Uganda's Albertine region. To achieve this ob- opment initiatives should be developed around the oil sector to dis-
jective, the study draws on a comprehensive and novel household suade feelings of marginalisation, despondency, and malcontent while
survey that was undertaken in the Albertine region in 2014. First, the galvanising local economic development efforts. The rest of the paper is
paper explores the expectations of the communities in anticipation of structured as follows: section two presents the methods and data; sec-
resource revenues. Second, the paper examines the extent of commu- tion three analyses the community expectations with regard to natural
nity involvement, knowledge, and familiarity with key decision making resource exploitation in the Albertine region; section four discusses the
processes and whether information regarding developments in the community involvement; section five discusses the perceived impacts of
sector is readily available to them. Lastly, the paper explores the likely extractive industries. Section six provides the conclusions.
undesirable environmental and social impacts arising out of the de-
velopment of the oil sector.
2. Methods and data
The current study is most related to Ogwang et al. (2018) and
Tumusiime et al. (2016) who similarly examined the expectations and
The paper follows a descriptive approach. The data used in this
impacts of natural resource discoveries in the Albertine region. Our
paper are from two major sources. The first source is a natural resource
major point of departure is the use of nuanced and novel household
management household survey, carried out in the Albertine region in
survey data that allows us to focus on expectations and involvement of
2014. The survey was carried out by the Economic Policy Research
the locals in the oil economy in addition to a detailed analysis of ex-
Centre with financial and technical support from the World Bank and
pected impacts. Results indicate that the host households have formed
Brookings Institution. The aim of the survey was to generate baseline
strong positive and negative expectations. The positive expectations
data, tools, and analysis to support foundational, policy focused re-
include improvements in social service delivery, including improved
search to support transparency and accountability in the management
access to healthcare, education, cleaner and cheaper energy, safe
of Uganda’s nascent oil and gas economy.
drinking water, employment opportunities, and transport infrastructure
The survey was based on a two-stage, stratified, random-sampling
such as roads. The negative expectations include the likely arrival of
procedure. The stratification was based on (1) intervention districts
migrants in search of new economic opportunities, heightened land
(i.e., districts with ongoing oil exploration activities); (2) other inter-
wrangles, exacerbated inequality, environmental pollution, inter-
vention districts (districts with potential for future exploration/pro-
ference with livestock grazing lands, and loss of livelihoods. However,
duction activities); and (3) control districts (outside the Albertine re-
results indicate that few households in the Albertine region are familiar
gion). Given that, at the baseline in 2014, there were no ongoing oil
with oil operations in their areas, and that engagement with the com-
exploration activities in the “other intervention” districts; this category
munity has been limited. This has led to feelings of marginalisation
of districts is considered part of the control districts in the analysis. The
owing to limited access to information pertaining to the sector. Con-
study considered three intervention districts that include: Hoima,
sequently, the communities expect that the benefits from the oil op-
Buliisa, and Nwoya. The choice of these three intervention districts was
erations in their communities will mostly benefit the Government,
guided by the fact that current oil activities—especially ex-
foreign private businesses, and Ugandan elite.
ploration—are concentrated in these specific districts. In addition, the

2
J. Mawejje
survey covered four “other intervention” districts (i.e., Nebbi, Masindi,
Kasese and Kabarole), as well as five control districts (i.e., Gulu, Oyam,
Kamwenge, Rukungiri, and Kyankwanzi).
In the first stage, enumeration areas (EAs) were the principal sam-
pling unit, and the selection of EAs was based on the 2014 census by the
Uganda Bureau of Statistics. In the second stage, 10 households were
randomly selected from each of the enumeration areas. A total of 1540
households were selected, of which 103 were dropped due to in-
accessibility or because they could not be located, leaving 1437
households. Table 1 provides the key descriptive demographic and
spatial characteristics of the surveyed households. Forty well-trained,
university-educated research assistants conducted the surveys over a
two-month period during March–May 2014. The analysis in this paper
is based on the data from the intervention districts of Hoima, Buliisa,
and Nwoya, since oil exploration activities had not yet commenced
outside these three districts.
The survey was designed to assess retrospective oil activities as well
as current ones. Although commercially viable quantities of oil were
confirmed in 2006, in the survey, we chose 2008 as our reference year.
This choice was based on information collected from key stakeholders,
which revealed that it was 2008 when “heavy machinery”—a char-
acteristic of intensive oil exploration activities—started moving into the
intervention districts. As such, all retrospective questions refer to ac-
tivities since 2008. Oil activities were assessed in different ways. First,
detailed information was collected about any experience working for oil
companies; familiarity with oil operations in the district; communica-
tion channels and access to information; any displacement due to oil-
related activities; expectations and concerns regarding oil activities;
environmental conditions in the community; and experiences of being
consulted by various stakeholders on oil activities. The survey also as-
sessed various aspects of well-being, including migration status, edu-
cation attainment, labour market participation, housing conditions,
enterprise asset holdings, and qualitative welfare indicators. The nat-
ural resource management household survey data is complemented by
the Uganda National Household Survey (UNHS) data obtained from the
Uganda bureau of statistics.
3. Oil discovery and community expectations
Where substantial natural resources are found, people tend to form
expectations especially around the perceived ways in which a natural
resource boom could affect their livelihoods. In particular, expectations
could be positive or apprehensive (Kiiza et al., 2011). The positive
expectations tend to be anchored around expected improvements in
social services delivery, infrastructural developments, employment
prospects and poverty reduction. On the other hand, the negative ex-
pectations is embedded in the resource curse literature where booming
resource sectors have a negative overall impact on the economy
through a multitude of channels. These channels could manifest
through increased likelihood of land and cross border conflicts and the
environmental risks that may impact access to clean water, land pro-
ductivity, and loss of livelihoods.
Extractive industries can play a major role in regional growth,
employment creation and provide important productive linkages
through the development of a local auxiliary services sector (Ablo,
2015). However, there are fears that the state has not adequately in-
volved/consulted the community, and thus these resources may not be
used to adequately respond to the unique needs of the community
(Tumusiime et al., 2016). In this case there are legitimate fears that
natural resources may present skewed opportunities and risks where
only persons in positions of influence and power stand to benefit at the
expense of the poor and marginalized.
What is important is that the development of the natural resource
sector in the Albertine regions does not injure but sustain local eco-
nomic development and growth in human development outcomes. This
can be achieved if natural resource wealth is used productively to
3
The Extractive Industries and Society xxx (xxxx) xxx–xxx
ensure the growth of the non-oil sector and in particular to ensure
broad based growth by supporting agriculture and food security, scale
up social protection and the provision of social services and mitigating
against any negative environmental impacts.
There are various expectations that people have formed with regard
to the nascent oil sector in Uganda (see for example Tumusiime et al.,
2016; Ogwang et al., 2018). Many accounts indicate that oil resources
have the potential to promote other than stifle human development in
the region. The hope is that the revenues generated from the oil re-
sources can provide the wherewithal needed to improve living stan-
dards, including among marginalized groups, such as women, rural
inhabitants, ethnic minorities, and the urban poor (Mawejje and
Bategeka, 2013; Choudhury et al., 2012). Indeed, these accounts mirror
the official government stance as provided in the National Oil and Gas
Policy which states that oil revenues will be used to put the country on
a path to sustainable development (GoU, 2008).
However, if such sustainable development is to be achieved, there is
need for prioritisation of expenditures towards the development of in-
frastructures supportive to the productive sectors of the economy
(Bategeka and Matovu, 2011), including in agriculture (Wiebelt et al.,
2018), in such a manner that would enhance inclusive growth and
equity. Moreover, setting up and strengthening institutions for suc-
cessful management of natural resources and engaging communities
will not only help to manage expectations but also to select investment
projects that will respond to the social, cultural and economic needs of
the community.
3.1. Positive expectations
Results from the natural resource management household survey
indicate strong expectations with regard to improvements in social
service delivery, including improved access to healthcare (78%), edu-
cation (83%), electricity (84%), safe drinking water (70%) and trans-
port infrastructure such as roads (87%) as indicated in Table 2. These
expectations partly reflect the needs of the local communities, espe-
cially in areas where oil activities are taking place or likely to occur. It
is fair to say that some of the expectations are influenced by the on-
going corporate social responsibility initiatives of some of the interna-
tional oil companies operating in these areas, but also the efforts of
government with regard to infrastructural projects especially the con-
struction of the roads.
It should be emphasized that before oil was discovered access to
services was difficult in the entire Albertine region. Infrastructural de-
velopments have since helped boost the local economy. People can now
take their agricultural produce to more distant markets where it fetches
a higher price. Likewise traders from towns such as Hoima and Nwoya
can more easily access towns in the oil rich rift valley to supply food
and other basic merchandise. Corporate social responsibility by the oil
companies has resulted in improved service delivery, particularly in the
education and health sectors and has helped forge better working re-
lations with the cultural setup, while supporting the development of the
tourism sector (Tumusiime et al., 2016).
Communities expect to benefit greatly from auxiliary business op-
portunities. The survey results indicate that 90 percent of the
Table 2
Positive Expectations from the oil and gas industry, %.
Source: Computations from natural resource management survey data, 2014.
Will improve Will not improve
Access to healthcare 78 12
Access to education 83 17
Business opportunities 90 10
Access to electricity 84 16
Access to safe water 70 30
Quality of roads 87 13
J. Mawejje The Extractive Industries and Society xxx (xxxx) xxx–xxx

respondents expect to benefit from improved business opportunities. Table 4

Indeed since commercially viable oil deposits were confirmed in the Distribution of employment opportunities in the oil and
Albertine region, a flurry of activities has ensued in the oil rich villages gas sector, %.
and adjacent towns. For example, the greater Bunyoro region did not Source: Computations from natural resource manage-
ment survey data, 2014.
have major commercial banks until the oil discoveries improved the
economic prospects in the region. By 2013, however, over 10 com- Employment type %
mercial banks were operational in Hoima from 5 only two years before
Seismic studies/surveys 23
(Matsiko, 2012). Many entrepreneurs have since started to set shop
Employed at oil well 13
there; shopping malls, guest houses, hotels and even a forex bureau Road construction 11
have all sprung since intense oil exploration activities begun in the area. Supplying goods 6
It should be emphasized that some of the business opportunities Community liaison officer 2
Security guard 2
listed above are not accessible to the local residents in these regions
Drilling wells 2
because of the high capital requirements. Indeed, it could be the case Other 40
that the big business opportunities are taken by “foreigners” to the
region. The local people will therefore have to be supported, through
deliberate government effort, to identify the type of business opportu- intended to improve access to electricity in many parts of the country.
nities that are relevant for the oil sector and to strengthen their skills Current efforts to improve access to cleaner energy sources include the
and knowhow to be able to meet the expected quality and standards of on-going construction works for the Karuma, Ayago and Isimba Hydro
service. While there are ongoing efforts to support business develop- Electricity Plants.
ment in parts of Uganda through the Private Sector Foundation Uganda There are high expectations about jobs but few direct employment
(PSFU), these initiatives should be widened to include small businesses opportunities are available at the current stage of development in the
and individuals gain the expertise and skills with a view of strength- oil and gas sector. Results indicate that only 1% of households have at
ening the local content requirements in the oil and gas sector. In ad- least one member who was able to find direct employment in an in-
dition, careful adherence to the national content regulations will go a ternational oil company. As can be seen from Table 4, majority of jobs
long way in supporting indigenous business engagement in the oil were filled in activities such as seismic surveys, road construction, and
sector value chain. oil well development. These types of jobs generally require a high
Government has prioritized the development of public infra- number of low skilled labour. The other jobs such as drilling wells,
structure in the area, given the huge infrastructural requirements for oil provision of security services, and supply of specialised goods require
sector development, and the relative remoteness of the Albertine re- relatively higher levels of skills and this may explain the lower rates of
gion. Construction works for the 92 km Hoima-Kaiso-Tonya road were employment in these particular trades.
completed in December 2014 (Oil in Uganda, 2014). The 9 MW Kaba-
lega electricity project located at Buseruka was commissioned by the 3.2. The negative expectations
President in January 2012 (Nakkazzi, 2012). Other important transport
infrastructural projects such as the Masindi- Hoima road, the Hoima – Despite the positive expectations, the community have also ex-
Kabwoya road, Masindi-Bukakata and Hoima – Wanseko and the Ki- pressed some fears as indicated in Table 5. Specifically the people ex-
gumba – Masindi – Hoima - Kyenjojo roads have been earmarked for pressed concerns with regard to the likely arrival of migrants (72%) in
construction. The government has also upgraded Kigumba technical search of new economic opportunities, land wrangles (68%), inequality
college into an oil and gas centre of excellence that will be critical in (53%), environmental pollution (71%), interference with livestock
ensuring that the youthful population gets requisite skills to tap into an grazing (54%) and loss of livelihoods (46%).
expected avalanche of jobs in the industry. Other infrastructures such as The communities fear that the development of the oil and gas sector
the penetration of mobile communication networks have boosted access is likely to result in an influx of migrants. This is likely to result into two
to ICT services in the region. separate challenges: the issue of land conflicts and the issue of rapid
The community expects to gain better access to cleaner and cheaper urbanisation (Ogwang et al., 2018; Tumusiime et al., 2016). The threat
energy. Most households in the Albertine region (parts of Bunyoro and of urbanisation is expected to exert pressure on the delivery of social
Lango in Table 3) depend on the environment, harvesting wood-fuel to services but could also trigger other secondary social-cultural chal-
meet their energy demands. Due to the low levels of modern energy use, lenges such as prostitution, theft, alcoholism, promiscuity and in-
and the low electricity access rates in the region, majority of households security (Tantua et al., 2018; Westwood and Orenstein, 2016; Obi,
hope that the proposed construction of a refinery and the 100 MW 2010). All these challenges pose threats for local economic develop-
thermal electricity plant will help improve access to cleaner and ment. For example, prostitution, alcoholism and promiscuity are risk
cheaper energy. Currently, the Government with support from devel- factors for the spread of sexually transmitted diseases, crime, and
opment partners is implementing a Rural Electrification Programme general breakdown in morality (Obeng-Odoom, 2014).
Increasing land wrangles and conflicts over control of land is re-
Table 3 garded as one of the most serious social impacts. Land related conflicts
Energy use patterns.
are perverse in Uganda since the colonial era. These conflicts are said to
Source: UNHS data 2016/17
Uganda Lango Acholi West Nile Bunyoro Tooro Table 5
Negative expectations from the oil and gas industry, %.
Energy for cooking
Source: Computations from natural resource management survey data, 2014.
Firewood 64.4 75.1 82.8 78.2 73.0 79.3
Charcoal 29.8 21.8 14.4 18.2 22.0 16.3 Yes No
Other 5.8 3.0 2.9 3.7 5.0 4.4
Fuel For Lighting Migrants will move into our community 72 28
Wick Lamp 27.5 10.4 39.7 33.8 18.4 30.8 Land wrangles will increase 68 32
Lantern 6.2 5.2 4.3 4.1 3.4 4.6 Inequality will worsen 53 47
Grid Electricity 22.1 7.1 2.9 3.1 11.4 12.6 Environmental pollution will worsen 71 29
Solar 17.5 16.3 14.8 17.1 37.6 27.2 Loss of livelihoods 46 54
Batteries 21.4 56.5 30.6 39.2 22.9 20.7 Interference with livestock grazing lands 54 46

4
J. Mawejje The Extractive Industries and Society xxx (xxxx) xxx–xxx

have been brought about by the colonialists who granted large chucks Table 6
of land to absentee land lords and the existence of overlapping land Familiarity with oil operations, %.
tenure rights (Deininger and Castagnini, 2004). But the discovery of oil Source: Computations from natural resource management survey data, 2014.
has further exacerbated the problem by creating a mad rush for land in I have heard but do not I have specific I have never
the Albertine area (Uganda Land Alliance, 2011), a situation that was have specific knowledge heard/ Do not
compounded by the communal land tenure system in the area that does knowledge know
not confer perpetual land rights on current users of the land. Therefore,
All 60 29 10
conflicts also emerged when some absentee landlords sought re- Gender
possession of land with intentions to benefit from a speculated com- Male 59 31 10
pensation from the GoU and oil companies for acquisition or damage Female 62 28 11
Residence
done to the land as a result of oil-mining activities. Some of these rushes
Urban 51 37 11
commonly referred to as “land grabbing” reportedly involve high Rural 62 28 10
ranking government officials (Ssekika and Mugalu, 2012). Education level
A related challenge to conflicts over control of land is the inter- No schooling 64 25 11
ference with livestock grazing areas. This challenge is likely to happen Primary School 62 28 10
O-Level 54 36 10
from two fronts: one, oil companies are likely to acquire large tracts of
A-Level 53 34 23
land to carry out various activities in exploration and development and
this is likely to interfere with livestock grazing (Ogwang et al., 2018).
Second, the land conflicts examined earlier are likely to interfere with processes with regard to a booming resource sectors (De Cock and
access and rights over land, especially the communal lands (Tumusiime Sturman, 2012). Indeed, Mawejje and Bategeka (2013) argue that
et al., 2016). Uganda’s oil and gas sector has been shrouded in secrecy, with minimal
Results further revealed that 53% of respondents in the Albertine engagement of the local and cultural institutions and that information
region think that oil activities are likely to create inequality and widen pertaining to the sector is not always readily available, exacerbating
the gap between the rich and the poor. This is true if oil activities feelings of marginalisation. Such feelings engender desperation and
present with skewed opportunities along the wealth-education-elite building favourable grounds for conflict and confrontations.
nexus. In this case the educated can benefit from the available em- Within this realm, we examined the extent of household familiarity
ployment opportunities, while the elite and wealthy benefit from the with the oil operations within the Albertine region, the major spot for
available business opportunities within the oil and gas value chain. oil activities in Uganda. In line with earlier assertions, results in Table 6
Another channel through which oil and gas activities can exacerbate indicate that few households in the Albertine region are familiar with
inequality is through the effect of inward migration on urbanisation and oil operations in their areas. While 10 percent have never heard, 60
access to resources. In this case the rapid inward migration and urba- percent have heard but do not possess specific knowledge about oil
nisation can create a class of urban poor residents. operations. Under these circumstances, we argue that it is difficult for
A large proportion of households expect environmental pollution to communities to benefit from the resource sector and improve their
worsen due to oil activities. Results indicate that 71 percent of the re- living standards where information is not readily available.
spondents expect the activities in the oil and gas sector to negatively It thus follows that households expect that the benefits from the oil
impact the environment. Indeed experiences from elsewhere suggest operations in their communities will not be of much benefit to them but
that oil and gas activities can have grave effects on environmental the Government, the foreign private businesses and the Ugandan elite
health. In Nigeria, for example, oil spills have often contaminated water (Table 7) and that the general public, communities in the oil areas and
sources and polluted agricultural land, affecting livelihoods and dee- the local private businesses will not benefit to a great extent. These
pening vulnerability and poverty (Opukri and Ibaba, 2008; Albert et al., findings reveal the extent of negative expectations and the feeling of
2018). These experiences suggest that the various institutional, policy exclusion that communities expressed with regard to the benefits from
and regulatory frameworks should be strengthened to ensure that en- oil operations (Tumusiime et al., 2016).
vironmental sustainability. It is thus important for government and the private companies en-
Lastly, results indicate that 46% of respondents expect develop- gaged in the developments in the oil and gas sector to adopt appropriate
ments in the oil sector to result in loss of livelihoods. This is especially communication and community engagement strategies so as enable the
the case where oil activities interfere with the day-today economic flow of information about opportunities in the sector to trickle down to
activities without sufficient compensatory mechanisms. It has been the communities. This will create an environment of mutual trust,
reported that many households who lost land to pave way for infra- transparency, and accountability in government operations, and will
structural projects such as roads, refinery and the development of oil avoid the dangers of a community that is desperate and anxious with
rigs have were not satisfactorily compensated (Ogwang et al., 2018; feelings of animosity and marginalisation. One way to improve
Tumusiime et al., 2016; Mawejje and Bategeka, 2013). This might lead
to loss of livelihoods whereby households cannot maintain the original
economic activities. In any case, the development of the oil and gas Table 7
sector should be done in such a way that it does not injure but enhance Perceptions about likely beneficiaries from the oil operations.
livelihoods. Source: Computations from natural resource management survey data, 2014.
Not at all To a small To some To a great Do not
4. Community involvement in oil sector development extent extent extent know

The general public 9.72 31.9 35.04 17.11 6.23

Natural resource booms have the ability to positively impact the
Government 0.89 6.84 12.58 74.98 5.72
welfare and living standards of the adjacent communities through the Communities 5.55 18.01 35 35.21 6.24
expansion of backward linkages such as demand for local supplies and Local private 2.60 18.63 40.34 26.1 12.33
employments (Aragón and Rud, 2013). However, such benefits are only businesses
possible where communities are supplied with adequate information Foreign private 3.35 12.65 25.85 44.19 13.96
businesses
and are involved in key decisions especially regarding the operations of
Ugandan Elites 2.19 11.23 23.48 47.78 15.33
mining activities in their communities. Unfortunately it is not always Others 10.44 5.1 6.07 4.85 73.54
the case that communities are involved in key decision making

5
J. Mawejje
Table 8
Households reporting environmental changes, %.
Source: computations from natural resource man-
agement survey data, 2014.
Environmental changes % might be due to statistical illusions owing to misinterpretation of data.
National parks 12
Noise pollution 11
Water bodies 6
Air quality 5 source discoveries is well established, research examining the local
Forests 2 economic impacts is scant.
Other vegetation 3 This study used novel household surveys combined with the Uganda
Waste 2
transparency in Uganda’s oil sector is to operationalise international
governance standards, such as the Extractive Industries Transparency
Initiative (EITI). The EITI was established in 2003 as a global standard
intended to uphold financial transparency and improve governance in
the extractive industries. While Uganda announced intentions to join
the EITI, the process has been much slower, ostensibly due to limited
political will (Sturesson and Zobel, 2015).
5. Impacts of oil exploitation
Extractive industries are known to have adverse social and en-
vironmental impacts, especially in countries were regulations and their
implementation are weak (see O’Rourke and Connolly, 2003 for a re-
view). Uganda’s known extractive resources are located in some of the
most environmentally sensitive and fragile districts. The Albertine re-
gion, for example, is known to have a rich diversity of flora and fauna
with 14 percent of all African reptiles (175 species), 19 percent of
amphibians (119 species), 35% of butterflies (1300 species), 52% of
birds (1061 species), 39% of mammals (402 species), 14% of plants and
more than 400 fish species considered to be resident there (NEMA,
2012). Yet, activity in the extractive industries could greatly undermine
conservation efforts leading to habitat destruction, as well as, water and
soil contamination that could lead to a loss of plant and animal life,
with the biggest risks arising from seismic surveys, oil pad construction,
drill waste and waste pits, and oil (Kityo, 2011).
Whereas current environmental impacts are minimal largely be-
cause the sector is still in its early stages, the communities expect to
experience environmental degradation that will reduce the quality of
water, air, wild animal habitats in the national parks, and vegetation,
among others. Data in Table 8 indicate that current environmental
changes have largely been experienced with regard to noise pollution,
and in the national park where some of the drilling and exploration
activities have taken place.
It is therefore important that the institutional, legal and regulatory
environments are improved to ensure that oil activities do not destroy
the environment. Indeed Mawejje and Bategeka (2013) found that the
core institution in charge of environmental protection, the National
Management Authority (NEMA), is lacking both in terms of technical
capacity and staffing which is a major hindrance to proper institutional
functioning. In addition the NEMA was found to lack appropriate air,
water and soil quality standards for the industry. Addressing these is-
sues is of utmost urgency and importance given the fact that environ-
mental and ecosystem degradation can have a significantly negative
impact on human development when it affects access to safe drinking
water, increases vulnerability to ill-health, and food insecurity.
6. Conclusions
Discoveries of significant natural resources present significant op-
portunities for social and economic transformation. However, ex-
ploitation of natural resources is often associated with negative im-
pacts. There is now a voluminous amount of literature on how natural
6
The Extractive Industries and Society xxx (xxxx) xxx–xxx
resources can be harnessed for inclusive growth and development. The
dominant narrative has often highlighted the resource curse and Dutch
disease effects associated with significant resource discoveries. There is
growing evidence, however, that the established resource curse effects
This strand of literature has provided support for the ‘resource blessing’
hypothesis – associating extractive industries with positive economic
effects. While literature examining the macroeconomic effects of re-
National household surveys data to examine the opportunities and risks
offered by the discovery of oil in Uganda’s Albertine region. We argue
that the discovery of oil presents opportunities for local economic de-
velopment especially if the identified risks are accounted for. In parti-
cular, attention has to be paid to appropriate management of the ex-
pectations of the people. Issues relating to people’s perceptions
regarding their involvement including access to information and in-
volvement/consultations in key decisions have to be considered. This
will ensure legitimacy and acceptance of the intended interventions in
these areas. Otherwise limited access to information breeds all sorts of
ungrounded rumours, anxiety and uncertainty which create fertile
ground for conflicts.
The fact that oil has been discovered in an ecologically fragile re-
gion presents risks for environmental management and biodiversity
conservation. The risks of environmental degradation, water and soil
contamination, and their related adverse health risks have to be ex-
amined within the broader realm of human development to ensure that
the oil industry creates opportunities for the advancement of human
development outcomes. Special attention should be paid to the trade-
offs between natural resource exploitation and the social and environ-
mental impacts.
The discovery of oil presents interesting opportunities for local
economic development but management of the expectations is para-
mount. Issues relating to people’s perceptions regarding their involve-
ment including access to information and consultations in some key
decisions have to be considered. This will ensure legitimacy and ac-
ceptance of the intended interventions in these areas. Otherwise limited
access to information breeds all sorts of ungrounded rumours, anxiety,
and uncertainty which create fertile ground for conflicts. In this regard,
community development initiatives should be developed around the oil
sector to dissuade feelings of marginalisation and malcontent while
galvanising local economic development efforts.
Despite the negative expectations expressed, the local communities
within the Albertine region approve of the ongoing activities. This ap-
proval is hinged on the positive expectations that oil resources have the
potential to improve both the economic and social outcomes. These
findings challenge the narrative that local communities tend to form
dominant hostile perceptions and therefore tend to oppose the devel-
opment of extractive industries in their neighbourhoods. Future eva-
luations should assess whether this trend would be maintained during
the development phase of the oil sector development. The baseline
survey provides a firm ground for future assessments.
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