- Oil-Nomics: Compensation
OIL COMPENSATIONS: LESSONS FROM MFALME AND BYAMAKA
The experts and policymakers in our oil sector may want to pay a study trip to a minuscule humble remote village called Kanyeganyegye.
The story rife in this village today is about two ba-falme. Mfalme in ordinary Kiswahili means king. In this village, it is a popular slang used to refer to rich people, especially the merchants. As is the case in any other village setting, one Mfalme has been neighbors with an old mzee called Byamaka for years.
About two years back, Mfalme moved to build a secondary school on his land neighboring Byamaka. Need for enough space led him into offers of purchasing Byamaka’s land, with the humble house on it. After a protracted wooing process, Mfalme gave up. Byamaka would not sell. Worst of all, the entire village had risen against this proud insensitive young fellow whose greed had pushed him into insulting an old man with a daring offer to purchase his land.
Mfalme, now a pariah in the village, gave up and regretted why he did not put his investment elsewhere in the first place.
It was only after narrating his ordeal to us during one of our clan meetings in Kampala that one kinsman found a simple solution that overcame Byamaka’s stance. Unknown to Byamaka and the entire village, Mfalme, armed with his weapon from his kin in Kampala, set out building a simple but modern house, about a kilometer from Byamaka’s home, on a two-acre fertile crescent. Roofed with ‘Ssembule’ (the village name for all colored roofing sheets), three bedrooms, garnished with solar power and topped with running water, showers, and a flush toilet.
Strange ‘standards’ in an ordinary rural setting. The water comes from a 20,000- liter tank built under the now mature and green compound, lined with heavy-duty PVC material, which rain-water harvesting experts say lasts
30 years maintenance-free. A pedal water pump completes it all, pushing water up a 2,000-litre reservoir that supplies the lavatories and sinks in the house.
Mzee Byamaka a Nouveau Mfalme.
On the D-day, Mfalme casually strolls into Byamaka’s compound and lures him into a conversation walk, whose destination is the new house. Mfalme opens. Both enter. Takes Byamaka around, switching on lights, flushing toilets, and splashing water sinks. Back to the living room. After a little pause, Mfalme interrupts Byamaka’s litany of admirations for the house. ‘You know Mzee, this house is yours, together with this land fenced by the ruyenje’ …, Mfalme drops the bomb. He has to repeat this seven times for Byamaka to believe his ears! Yes, this new ‘palace’ would be his, in exchange for the land near Mfalme’s school. ‘Take it, take, take…take’…was Byamaka’s uncontrolled reply. The rest is history. The village today has two ba-falme. Thanks to simple ingenuity. Mfalme, with all his financial might, had failed to achieve this.
Oil Cities: Uganda’s new modus vivendi
This living story carries a lot of lessons for the gurus, experts, and policy-makers in our oil sector. The story of the Buliisa compensation process tells us we may need to rethink the entire approach to this compensation thing. Legally and procedurally proper, with valuations carried out by independent experts and approved by the Government Valuer, and compensation payments acknowledged, cash received by the ‘beneficiaries’, this process may create a Johannesburg in Buliisa: a glittering eGoli (City of Gold), surrounded by a Soweto.
This situation was deliberate, ‘legal’, and ‘proper’ to the system in South Africa then. Uganda has not had nor does it plan to establish apartheid here, in whatever form or nature. The Buliisa grumbles from citizens, MPs, civil society and others are warnings early enough to save the whole process the way Mfalme was saved by his kinsman.
It is now established that oil does exist in all exploration areas in viable commercial quantities. The makers of the Oil and Gas Policy, therefore, need to revisit it all, delete clauses providing for compensation and take the Mfalme-Byamaka model. Royalties, Capital Gains Tax, or whatever form of levy the government expects from the oil companies, must be computed and paid in advance.
Using these funds, the government must acquire land, build cities (Oil cities), and settle the people who are to be displaced by the oil industry. Picture how many jobs will be created by the City Development Corporation, a parastatal in charge of Uganda’s new urbanization strategy. We have the Condominium Law, which enables owners to have titles for flats. Rwanda’s Batsinda Estate experience offers insight into how government and local authorities can create decent livelihoods for citizens.
This is the only way for Local Content to have meaning and for Ugandans to claim the oil is ours. Only then shall we avoid the impact of what has befallen oil communities elsewhere. Forewarned is forearmed. Owaranga akabi tiwe akareeta (he who heralds calamity is not its author).
We either take the Mfalme-Byamaka model (win-win), else, ten years down the road, we shall be earning PhDs from ‘analyzing’ the ‘oil curse’ in Uganda!
Photo Credit at: https://www.independent.co.ug/wp-content/uploads/2019/06/cover_oil.jpg
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