“Oil will not Create Jobs”

Uganda: Oil Will Not Create Jobs says Professor Paul Collier


By Alon Mwesigwa & Edgar Angumya, 22 December 2013

Oxford University Professor Paul Collier has said those clamouring for jobs from the nascent oil and gas sector in Uganda should not get their hopes too high, and should start looking elsewhere.

Collier, also co-director of Centre for the Study of African Economies (CSAE), said oil could never be a solution to the bulging unemployment levels, and advised Uganda to invest well in other sectors for the jobs.

“Oil is an overly capital-intensive sector. There are no jobs,” said Collier, speaking on the topic of “Development Challenges for Africa” at the Speke Resort Munyonyo recently.

Some estimates suggest that up to 62 per cent of the youths in Uganda are unemployed.

Uganda discovered oil in 2006, and so has Kenya, while Tanzania has discovered gas. Collier advised the countries to use proceeds from these minerals and invest well while resisting pressures to appease voters.

“Governments must do what they think is necessary to drive development,” he said.

Collier’s view is that investments in such sectors as agriculture, construction, and vocational education would be a way to create jobs.

“The construction sector needs [basic] skills like bricklaying, carpentry, electrification, etc.”

For the East Africa states to manage the resources better, Collier said, they needed to develop strong rules and institutions, which will help in decision making and implementation of certain projects.

“Strong checks and balances are needed,” he said.

To develop such institutions with full capacity to handle the necessary work, Collier advises, nations must build the necessary human capital gradually to manage such public institutions.

“It takes time to build capacity; you should gradually build this investment as a share of GDP.”

Collier believes it is fundamental that the citizenry needs to understand the implications of different kinds of policy framework that the member countries would undertake.

“What we need is a critical mass of citizens who understand what rules are for and how to use them,” he said.

Collier applauded the efforts by the East African Community member countries to focus on development of infrastructure in the region.

“Shared infrastructures are the real instruments of economic integration,” he added.

In Nairobi, works for the standard gauge railway line are already ongoing. The line will pass via Kampala and then Kigali, Rwanda. Uganda is set to build an oil export pipeline to the Kenyan port of either Mombasa or Lamu.

Source: AllAfrica