BabuK
JF-Expert Member
- Jul 30, 2008
- 1,845
- 329
Experts have raised concern over the Oil and Gas Revenue Management Act, 2015, hardly a month following its passage amid brawls that led to suspension of a parliamentary faction bitterly opposed to debate the bill, citing loopholes that allegedly called for serious contemplation.
The legal experts from the Policy Forum who met yesterday for a roundtable discussion in Dar es Salaam said the loopholes have driven the law to a long distance away from the public whose interests the law claims to protect.
Theres no section in the law that gives a hint over how oil and gas revenues will go back to the local communities, said Adam Sembuche, a forum participant.
He also said that though the law states about commitments to transparency, it is short of defining their nature and a mechanism behind its compliance.
He was echoed by Marystela Mtalemwa, a participant who pointed out that the law did not state clearly on the distribution of resources in par with geographical locations related to oil and gas extractions.
Let the law bring about benefits and not losses to the people, she said warning against repetition of the Sudan experience where denial of local communities of the benefits accrued from what they produced led into long-standing wars.
Pointing out another discrepancy in the law, the experts suggested that setting 60 per cent of the Gross Domestic Product (GDP) for strategic development expenditure could not suffice the need to benefit the intended public.
According to the law, a maximum amount of 3 per cent of the GDP may be transferred to the Consolidated Fund for budgetary use.
At least 60 per cent of such transfer is dedicated to funding strategic development expenditure including human capital development, especially in the area of science and technology, says the law.
They also said that spending 60 per cent for development expenditure would not bring about development, given 40 per cent GDP limit in the total government expenditure in a year.
Mark Evans, Program Officer (Economic and Legal) for Natural Resource Governance Institute suggested the Act be reviewed to ensure that the accrued revenues are spent in accordance with laid-out plans and for the sound development schemes.
He stressed on the importance of building a consensus on adherence to the fiscal rules, that he paradoxically described as conservative approach to be followed in the absence an alternative option.
There is a need to foresee ways for implementation through making prior discoveries of potential ambiguities in the law, he said.
But Sarubi Mbayani, Principal Economist from the Ministry of Finance believed that the lawyers were asking too much from the government, saying the rebellious experts had exaggerated the amount of revenues secured by the government out of the extractive industry.
He said the 40 per cent level is the maximum limit of the budget the government can allocate for annual expenditure where currently the expenditure runs at 30 per cent.
He said the limit has been set so as to control the expenditures amid public tendency to randomly increase salaries where money is available without regard to developmental issues.
Its almost impossible to reverse into slashing salaries during crises once increased during hey days, he said.
Early last month the National Assembly endorsed three Oil and Gas bills that included the Oil and Gas Revenues Management Act, 2015.
The main objectives of the Management Act was to ensure that revenues derived from oil and gas industry were optimally collected and used in a manner that did not endanger the fiscal and macroeconomic stability.
It was intended that revenues accrued from oil and gas were invested in a manner that would bring the desired socio-economic development.
The bills were tabled under the certificate of emergency that was strongly rejected by the parliamentary opposition, causing mayhem that led into suspension of more than 40 rebellious law makers.
SOURCE: THE GUARDIAN
