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Central Bank Skeptical on Single Petroleum Account

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Louis Kasekende, the Bank of Uganda Deputy Governor says that Bank of Uganda is agreeable to a single account as long as the objectives of the account are strictly adhered to and that parliament would be expected to play a vital role for it to succeed.
Louis Kasekende the Deputy Governor Bank of Uganda

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Central Bank officials are skeptical about the petroleum single account as proposed in the Public Finance Bill 2012.  The bill currently before the Finance Committee of parliament seeks to regulate revenue management in the oil sector.

Louis Kasekende, the Bank of Uganda Deputy Governor says that Bank of Uganda is agreeable to a single account as long as the objectives of the account are strictly adhered to and that parliament would be expected to play a vital role for it to succeed.

Kasekende adds that the burden with the proposed single account will be on Parliament to ensure that money to support the budget is transferred once in a year and that it is earmarked to infrastructural development.

He tells the finance committee that the previous different accounts were manageable and easy to follow up adding that a particular account would be accountable for a particular purpose hence easing accountability.

The committee is currently collecting views from stakeholders on the proposals embedded within the Public finance bill before tabling it to parliament for a second reading.

Adam Mugume, Bank of Uganda’s Executive Director- Research clarifies that there were two separate accounts, the holding account and reserve or investment account which reserved money for future generation; however, both accounts have now been merged.

Mugume says that the danger with the single account could be that there might not be any savings for the future saying that the overall is enhancing parliament’s oversight ability for this single account to work.

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Further noting that He cited countries like Chile and Botswana where a single account for oil has been effective and a particular percentage is allocated for savings.  He adds that in countries where the single account has worked, the Civil Society Organizations and Parliament were enhanced.

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